We evaluate the role of time preferences in educational decision making, when deviating from the standard-neoclassical assumption of exponential discounting. Based on a dynamic structural life-cycle model we analyse the importance of the discount factor for policy simulations. This is done by considering two relevant policies: (1.) a change in the state grant for students (BaföG) as a way to affect short-run benefits while at school and (2.) a change in progressive taxation as a way to affect long-run benefits of schooling since labour income generally increases with additional years of schooling.