Student Financial Aid:The Roles of Loans and Grants (Working Paper 37)

This paper addresses the roles of loans and grants as forms of student financial aid. It begins with a simple choice model where individuals decide to pursue post-secondary studies if i) the net benefits of doing so are positive and ii) no financing or liquidity constraints stand in their way. The effects of loans and grants on these two elements of the schooling decision are then discussed. It is argued that based on equity, efficiency, and fiscal considerations, loans are generally best suited for helping those who want to go but face financing constraints, whereas grants are more appropriate for increasing the incentives for individuals from disadvantaged backgrounds to further their studies. Loan subsidies, which make loans part-loan and part-grant, are also discussed, including how they might be used to address “debt aversion”. Given that subsidised loans have a grant (subsidy) element, while grants help overcome the credit constraints upon which loans are targeted, the paper then attempts to establish some general rules for providing loans, for subsidising the loans awarded, and for giving “pure” grants. It concludes with an application of these principles in the form of a recent proposal for reforming the student financial system in Canada. *

The Benefits of Sampling Sports During Childhood

Sampling may promote prolonged engagement in sport by limiting physical injuries (Fraser-Thomas et al., 2005). Overtraining injuries are a concern for young athletes who specialize in one sport and engage in high volumes of deliberate practice (Hollander, Meyers, & Leunes, 1995; Law, Côté, & Ericsson, 2007). For instance, young gymnasts who practice for over 16 hours a week have been shown to have higher incidences of back injuries (Goldstein, Berger, Windier, & Jackson, 1991). A sampling approach in child-controlled play (e.g. deliberate play) rather than highly adult-controlled practice (e.g. deliberate practice) has been proposed as a strategy to limit overuse and other sport-related injuries (Micheli, Glassman, & Klein, 2000). In summary, sampling may protect against sport attrition by limiting sport related injuries and allowing children to have early experiences in sport that are enjoyable. Psychosocial Benefits of Sampling Only a small percentage of children who participate in school sports ever become elite athletes. Therefore, the psychosocial outcomes of sport participation are particularly important to consider. Recent studies with youth between the ages of 11 to 17 have found that those who are involved in a variety of extracurricular activities (e.g. sports, volunteer, arts) score more favourably on outcome measures such as Grade Point Average (GPA; Fredricks & Eccles, 2006a) and positive peer relationships (Fredricks & Eccles, 2006b) than youth who participate in fewer activities. These patterns are thought to exist due to each extracurricular activity bringing its own distinct pattern of socialization experiences that reinforce certain behaviours and/or teach various skills (Fredricks & Eccles, 2006b; Rose-Krasnor, Bussen, Willoughby, & Chambers, 2006). This contention is corroborated by studies of children and youths' experiences in extracurricular activities indicating that youth have unique experiences in each activity that contribute to their development (Hansen, Larson, & Dworkin, 2003; Larson, Hansen, & Moneta, 2006). This has led Wilkes and Côté (2007) to propose that children who sample different activities (through their own choice or by virtue of parental direction), have a greater chance of developing the following five developmental outcomes compared to children who specialize in one activity: 1) life skills, 2) prosocial behaviour, 3) healthy identity, 4) diverse peer groups and 5) social capital.