Student Aid Reforms in Quebec: Is Changing the Clawback Rate Better than Changing the Base Grant?
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We examine two ways through which student financial aid can be reformed: a cut in the rate at which the aid is clawed back with earned income or an increase in the threshold at which this clawback applies. We present a theoretical and empirical analysis of these options. We show that both reduce incentives to work, although the clawback rate does so less. Cuts to clawbacks also deliver a bigger boost to financial aid for those most in need, although they may benefit students higher in the income distribution. We argue that governments might consider a policy that reduces clawback rates, but within a reasonable range of earned income.
2015 ◽
Vol 26
(2)
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pp. 197-210
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1984 ◽
Vol 16
(3)
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pp. 58-59
2002 ◽
Vol 4
(2)
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pp. 173-201
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2020 ◽
Vol 47
(8)
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pp. 991-1001