This paper examines the relationship between family income and college enrollment, focusing on the evidence of credit constraints in post-secondary schooling. The authors distinguish between short-run liquidity constraints and long-term factors that promote cognitive and noncognitive abilities. They argue that long-run factors, such as family income and environmental influences, are the primary determinants of the family income-schooling relationship, while short-run liquidity constraints play a minor role. The paper critically evaluates arguments that suggest short-term credit constraints are significant, including comparisons between instrumental variable (IV) and ordinary least squares (OLS) estimates of the returns to schooling. The authors find that IV estimates exceeding OLS estimates do not necessarily indicate credit constraints, as they can be consistent with self-selection or comparative advantage in the labor market. They also examine other arguments supporting short-term credit constraints, such as the sensitivity of college enrollment to tuition costs and the higher rates of return to education for low-income families. The paper concludes that the first-order explanation for gaps in college enrollment by family income is long-run family factors that shape ability and expectations, with short-run income constraints playing a minor role. The authors estimate that at most 4% of American youth are credit constrained in a short-term sense, and they suggest that interventions targeting these constraints may be effective for specific subgroups but should not be expected to eliminate enrollment gaps.This paper examines the relationship between family income and college enrollment, focusing on the evidence of credit constraints in post-secondary schooling. The authors distinguish between short-run liquidity constraints and long-term factors that promote cognitive and noncognitive abilities. They argue that long-run factors, such as family income and environmental influences, are the primary determinants of the family income-schooling relationship, while short-run liquidity constraints play a minor role. The paper critically evaluates arguments that suggest short-term credit constraints are significant, including comparisons between instrumental variable (IV) and ordinary least squares (OLS) estimates of the returns to schooling. The authors find that IV estimates exceeding OLS estimates do not necessarily indicate credit constraints, as they can be consistent with self-selection or comparative advantage in the labor market. They also examine other arguments supporting short-term credit constraints, such as the sensitivity of college enrollment to tuition costs and the higher rates of return to education for low-income families. The paper concludes that the first-order explanation for gaps in college enrollment by family income is long-run family factors that shape ability and expectations, with short-run income constraints playing a minor role. The authors estimate that at most 4% of American youth are credit constrained in a short-term sense, and they suggest that interventions targeting these constraints may be effective for specific subgroups but should not be expected to eliminate enrollment gaps.