More money, better performance? The effects of student loans and need-based grants in China's higher education

Wei Huang, Fan Li*, Xiaowei Liao, Pingping Hu

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

11 Citations (Scopus)

Abstract

The goal of this study is to examine the effect of student loans and need-based grants on financially disadvantaged student academic performance in China's higher education. We used a large sampled data from 101 universities to conduct our study. By employing different matching methods, we found that receiving a student loan did not improve student academic performance, but slightly increased students' likelihood of doing a part-time job. Likewise, receiving a need-based grant had no significant effect on student academic performance. We argue that current financial aid programs do not yield any measurable improvement on student performance. Reform and more rigorous evaluations are needed to design an effective financial aid program to promote the development of higher education in China.

Original languageEnglish
Pages (from-to)208-227
JournalChina Economic Review
Volume51
Early online date22 Sept 2017
DOIs
Publication statusPublished - Oct 2018

Keywords

  • China
  • Financial aid
  • Higher education
  • Need-based grants
  • Student achievement
  • Student loans

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