As outstanding student loan debt has increased, institutions and states have taken steps to try to reduce student debt. At the same time, how states fund public higher education could affect the amount of debt that students have upon leaving college and whether they are able to repay their loans. In this brief, we provide the first examination of whether state performance-based funding policies affect student loan debt. We find no increases in debt among students who completed college, but students who left a college subject to performance funding without graduating had higher debt burdens than students attending non-performance funding institutions.
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