@EdWorkingPaper{ai26-1483,
title = "Unequal and Persistent Effects of Student Loan Policy: Evidence from Parent PLUS Reforms",
author = "Madison Dell, Alex Monday",
institution = "Annenberg Institute at Brown University",
number = "1483",
year = "2026",
month = "May",
URL = "http://www.edworkingpapers.com/ai26-1483",
abstract = {Federal student loan policy is designed as a uniform intervention, yet institutions differ in their reliance on specific sources of financing. We study how these differences shape the transmission of policy shocks using two reforms to the Parent Loans for Undergraduate Students (Parent PLUS) program: a 2012 tightening of credit standards that limited access to these loans and a 2015 revision that partially restored access. We conceptualize institutional vulnerability as dependence on Parent PLUS borrowing to sustain enrollment and revenues. Using a panel of U.S. colleges from 2006 to 2023, we estimate difference-in-differences, event-study, and synthetic control models. We find that Historically Black Colleges and Universities (HBCUs), which rely more heavily on Parent PLUS, experienced larger declines in borrowing and enrollment after 2012. Although borrowing rebounded after 2015, enrollment did not fully recover. We show that these effects reflect both demand- and supply-side responses. HBCUs responded by expanding admissions to offset lower yield rates and by reducing spending on instruction and student services, changes that coincided with declines in retention and graduation. These findings demonstrate that uniform credit policies can generate unequal and persistent institutional effects when institutions differ in their financial dependence.},
}