Improving the educational outcomes of economically disadvantaged children is a policy priority in the United States, and yet relatively little progress has been made in recent decades. Education reforms that aim to help economically disadvantaged students often focus on improving the quality with which grade-level material is taught, or the…

Although the federal government dedicated nearly $40 billion to funding student loans in 2006, only 60 percent of potential students from low-income families attend college, compared with 90 percent from high-income families. This paper argues that enrollment rates are lower than they could be because potential students undervalue loan subsidies,…