For the treatment effect of student loans, we find that SOFES recipients have a 5.5%-point higher chance of choosing a Humanities and Social Sciences (Area I) subject, a 9.8%-point lower chance to choose an Economics and Administration (Area II) subject, and a 3.1%-point higher chance to choose an Engineering and Natural Sciences (Area III) subject (although the latter effect is statistically insignificant).

# **7. Conclusion and Policy Considerations**

In this paper we studied the impact of one student loan scheme on access to higher education and the behavior of students in terms of performance and decisions regarding study field and jobs on the side. While there is a substantial literature on the relationship between financial support and university enrollment, the question how financial support impacts on student behavior has received little attention. However, as human capital is built during the program, it is important to have insight into the factors that influence the behavior of students. In this paper we tried to gain such insight in the context of recent experiences with student loans for private university programs in Mexico.

To that end, we used the Mexican household survey, and novel data from two sources. First, the SOFES database is a rich source of information on a wide range of variables concerning socio-economic background, educational attainment and information regarding student behavior. To construct a control group, we proposed a regression-discontinuity design. Treatment is measured by the size of the credit for which the student is eligible. The estimated treatment effect is thereby connected to what we have labeled the internal margin, i.e. outcome differences due to variation in credit levels within the group of SOFES students. The second data source is a large-scale survey among students and graduates, both with and without a credit from SOFES. The control group is then formed by the people who did not receive financial support from SOFES. The impact of treatment thus reflects the effects along the external margin, i.e. between students with and without a SOFES credit.

Briefly, **_the main findings of this analysis_** are as follows: (i) Impact on accessibility of higher education: Using the Mexican household survey ENIGH 2000, we find that students who receive some kind of financial support have a 24 percent higher chance of enrollment into an university program. This is a significant impact. We should mention that these results need to be interpreted with caution, since we cannot control for some other important variables in the estimation (principally academic aptitudes, type and conditions of financial aid). Nevertheless, it seems warranted to conclude that financial aid matters for university access.

(ii) Impact on academic performance: Using both the SOFES survey (external margin) and the SOFES database (internal margin), our findings suggest that SOFES recipients perform better in terms of grade point average (GPA). The GPA increases by 0.17 on a 10 point scale, which is a 3% improvement. This corresponds to an improvement of 25% of the standard deviation of 0.7. However, the causal impact from loans on GPA identified 29