Credit for Low-Income Students and Access to and Academic Performance in Higher Education in Colombia: A Regression Discontinuity Approach

This study evaluates the impact of a national-level subsidized loan program, ACCES (Access with Quality to Higher Education), on a number of higher education outcomes (i.e., increase in enrollment rates, decrease in dropout rates, and increase in academic performance) of low-income students. The program intends to tackle Colombia's wide disparities in access to postsecondary education by socioeconomic status and by region. We use national-level data along with a regression discontinuity design (RDD) to estimate the impact of the program. We provide intent to treat and the local average treatment effect estimates of the program on enrollment and dropout rates, and on academic performance. Our RDD design takes advantage of the fact that the beneficiaries of the program are selected based on a government mandated procedure to rank individuals at the “department” (similar to geographic regions in the U.S.) level based on a cutoff score in their high school exit exams. The results confirm that the program has been effective in terms of increasing the potential number of low-income students at the margin who would have enrolled in college, decreasing the number of students who dropped out, and increasing their academic outcomes. Nonetheless, the effects of the credit program on enrollment exhibit the largest magnitude and with clearly positive heterogeneous impact on the poorest applicants. The results are less compelling for dropout, yet in the expected direction.