Quantifying the Non-Take-up of a Need-Based Student Grant in the Netherlands

Students from lower income families are entitled to apply for a student grant. Not all entitled students do so. We estimate the non-take-up rate of the need-based student grant in the Netherlands and investigate which student characteristics Correlate with the non-take-up. Using administrative data on students and their parents and data on student grants, we construct an eligibility proxy for first-year students in higher education. Our calculations suggest that around one-third of all students is eligible for a need-based grant, with 12% being eligible for the maximum amount. We find that 24% of all eligible students do not apply for the need-based student grant. The non-take-up among students eligible for the maximum amount is lower but still substantial at 12%. Remarkably about one-third of the non-claimants do take on a student loan while leaving the grant on the table. Our regression results show that the non-take-up of the grant is highest among students who belong to social groups which are overall less likely to be eligible. This indicates that information costs may be an important determinant of non-take-up among students.