Crafting A Class: The Trade Off Between Merit Scholarships and Enrolling Lower-Income Students (original) (raw)
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Marginal Effects of Merit Aid for Low-Income Students
2020
Financial aid from the Susan Thompson Buffett Foundation (STBF) provides comprehensive support to a college population similar to that served by a host of state aid programs. In conjunction with STBF, we randomly assigned aid awards to thousands of Nebraska high school graduates from low-income, minority, and first-generation college households. Randomlyassigned STBF awards boost bachelor's (BA) degree completion for students targeting four-year schools by about 8 points. Degree gains are concentrated among four-year applicants who would otherwise have been unlikely to pursue a four-year program. Degree effects are mediated by award-induced increases in credits earned towards a BA in the first year of college. The extent of initial four-year college engagement explains impact differences by target campus and across covariate subgroups. The projected lifetime earnings impact of awards exceeds marginal educational spending for all of the subgroups examined in the study. Projected earnings gains exceed funder costs for urban students and for students with relatively weak academic preparation.
The effect of large-scale merit scholarships on state sponsored need-based aid
2006
Since the 1990's states have implemented large merit-based scholarships at unprecedented levels. These programs have been criticized because they may be particularly detrimental to low-income and minority students. A frequently cited criticism is that the large scale merit-based state scholarships directly crowd out and reduce state funding on need-based scholarship. To identify this relationship we utilize state-level panel data from 1988 to 2003 on higher education finance. We include state and year fixed effects that control for unobserved differences across states and time. The results indicate that states that institute merit programs are not systematically different from nonadopting states with respect to need aid. Furthermore, states that adopt large-scale merit aid programs experience no economically or statistically significant reduction in need aid funding. Even disaggregating the merit programs into those that have dedicated and general funding sources still provides no evidence that large-scale merit programs reduce need aid. The recent decrease in need aid reflects a secular reduction in need aid that affects merit and non merit states similarly, rather than a result of the rapid growth of merit programs.
The Consequences of Merit Aid. JCPR Working Paper
2002
Since the early nineties, a dozen states have established broad-based merit aid programs. The typical program waives tuition and fees at public colleges and universities in one's home state. Unlike traditional merit programs, such as the National Merit Scholarship, this aid requires relatively modest academic performance and provides scholarships to hundreds of thousands of students. This paper examines how merit aid programs in seven states have affected an array of schooling decisions, paying particular attention to how the effects have varied by race and ethnicity. It finds that the new programs typically increase the attendance probability of college-age youth by five to seven percentage points. The merit programs also shift students toward four-year schools and away from two-year schools. The Georgia HOPE Scholarship, which has been found to widen racial gaps in college attendance is atypical in its distributional impact, with the other states' programs tending to have a more positive effect on the college attendance rate of Blacks and Hispanics. The paper attributes HOPE's unique distributional effect to its relatively stringent academic requirements and a recently-eliminated provision that channeled the most generous scholarships to higher-income students. (Contains 29 references.) (SM) Reproductions supplied by EDRS are the best that can be made from the original document.
Is merit-aid for all? The effects of aid-eligibility changes on college access in the United States
Studies in Higher Education, 2023
The United States has widely experimented with merit-based financial aid to make college more accessible and affordable for its youth. Varying in design and benefits, these state-run programs subsidize college costs for academically meritorious high-school graduates. While broadly linked to higher college attendance the distribution of aid benefits depends critically on the eligibility criteria. States often make post-adoption changes to merit requirements to lower program costs, but little is known about their impact on youth’s college decisions. This paper evaluates the effects of such eligibility revisions using West Virginia’s PROMISE scholarship, which, unlike its peers, frequently hardened merit rules post-inception. We leverage the discontinuities in the timing of the scholarship’s adoption and its successive modifications to estimate the policy-induced changes in students’ college choice. We use two robust inference models – difference-in-difference and synthetic control, on institution-level enrollment data from the Integrated Postsecondary Education Data Systems (IPEDS). We estimate a 6.5% growth in college enrollments immediately following PROMISE that fades rapidly once aid eligibility narrows. We find that this initial enrollment jump is attributable to an aid-induced improvement in the average youth’s college readiness which is confined to the high achievers after the program scope narrows. Additionally, enrollments shift from 4-year to 2-year colleges post eligibility revisions. Our results show that the stiffer criteria redirect the aid benefits toward youth with already better access to college.
SSRN Electronic Journal, 2000
Using new institutional-level data, we assess the impact of changing federal aid levels on institutional-level Pell revenues. Using various policy instruments associated with Pell generosity, we quantify the sensitivity of institutional Pell revenues to the generosity of the Pell Grant program. In general, we find an elastic response of institutional Pell revenues with respect to the maximum Pell award, where other policy instruments associated with Pell generosity are found to have an inelastic or zero impact. We also document significant asymmetries across institutional selectivity, both in magnitude and in terms of which channel accounts for the measured sensitivity-award values directly or institutional enrollment. In the end, exogenous changes in the federal Pell Grant program are found to correlate strongly with changes in the distribution of needy students and revenues across institutional quality.
The Enrollment Effects of Merit-Based Financial Aid: Evidence from Georgia's HOPE Scholarship
Social Science Research Network, 2001
This paper examines the effects of Georgia's merit-based HOPE Scholarship on college enrollment. Introduced in 1993, the HOPE Scholarship covers tuition, fees, and book expenses for students attending Georgia public colleges, and provides a subsidy of comparable value to students attending in-state private colleges, without any income restrictions. Treating HOPE as a natural experiment, we contrast college enrollment in Georgia with those in the other member states of the Southern Regional Educational Board using IPEDS data for the period 1988-97. We estimate that the HOPE increased total freshmen enrollment by 5.9 percent, with the gains concentrated in 4-year schools. For freshmen recently graduated from high school attending 4-year colleges, two-thirds of the program effect is explained by a decrease in students leaving the state. Both white and black enrollments increased because of HOPE, with the state's historically-black institutions playing an important role. Finally, the total HOPE-induced enrollment increase represents only 15 percent freshmen scholarship recipients.
Enrollment Effects of Merit Aid: A Case Study of Georgia’s HOPE Scholarship Program
2000
Over the past decade, aid for post-secondary schooling has become increasingly tied to merit, both by individual institutions and by state and federal governments. One of the most prominent examples of this trend is Georgia's lottery-funded HOPE ("Helping Outstanding Pupils Educationally") Scholarship program. The Georgia program was designated as the model for the federal HOPE tuition tax credit and has served as the basis for merit-based college scholarships in over a dozen states. We show that HOPE significantly raised overall enrollment, with the effect concentrated in 2-year institutions, a result that is robust to a variety of different specifications and control groups.
Economics of Education Review, 1988
Merit scholarships are an increasingly popular institutional attempt to maintain both the number and the quality of students in the face of declining enrollments. This paper argues that merit aid is a bad idea, both for the society as a whole and for individual institutions. From society's point of view, merit aid will simply give financial aid dollars to students who would have gone to college anyway and will take those dollars away from needy students who might then not be able to attend. From the institutional perspective, the prospect of attracting more able students is empirically small, and to the extent that it exists, short-lived.