Abstract
We examine the effects of federal sanctions imposed on for- profit institutions in the 1990s. Using county-level variation in the timing and magnitude of sanctions linked to student loan default rates, we estimate that sanctioned for- profits experience a 68 percent decrease in annual enrollment following sanction receipt. Enrollment losses due to for- profit sanctions are 60- 70 percent offset by increased enrollment within local community colleges, where students are less likely to default on federal student loans. Conversely, for- profit sanctions decrease enrollment in local unsanctioned for- profit competitors, likely due to improved information about local options and reputational spillovers. Overall, market enrollment declines by 2 percent.
Original language | English |
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Pages (from-to) | 46-83 |
Number of pages | 38 |
Journal | American Economic Journal: Economic Policy |
Volume | 12 |
Issue number | 2 |
DOIs | |
State | Published - May 1 2020 |
Bibliographical note
Publisher Copyright:© 2020 American Economic Association.
ASJC Scopus subject areas
- General Economics, Econometrics and Finance