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Amid rising concerns regarding student loan debt, we examine the effect of Washington State’s College Affordability Program introduced in 2015 on undergraduate student loan debt to provide policy-makers with additional tools to help prevent another student loan debt crisis. The program reduced tuition for resident full-time undergraduate students at public colleges and universities for two consecutive academic years. This policy adoption created a natural experiment that we exploit to identify a causal link between tuition and loans. Using college-level data for the 2009–2010 through 2021–2022 academic years and employing a difference-in-differences model in conjunction with nearest-neighbor matching, we show that a decrease in college tuition following the adoption of the College Affordability Program caused a $637.96 (9 percentage-point) decline in average loans among first-time, full-time undergraduates in Washington State relative to undergraduates from matched U.S. schools.


This article was originally published in The American Economist. The full-text article from the publisher can be found online.

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The American Economist

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Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License.


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