Student Responses to Merit Retention Rules
Christopher Cornwell (),
Kyung Hee Lee and
David Mustard ()
Additional contact information
Kyung Hee Lee: University of Georgia
HEW from EconWPA
A common justification for HOPE-style merit-aid programs is to promote and reward academic achievement, thereby inducing greater investments in human capital. However, grade-based eligibility and retention rules encourage other behavioral responses. Using the longitudinal records of all undergraduates who enrolled at the University of Georgia (UGA) between 1989 and 1997, we estimate the effects of HOPE on course enrollment, withdrawal and completion, and the diversion of course taking from the academic year to the summer, treating non-residents as a control group. First, we find that HOPE decreased full-load enrollments and increased course withdrawals among resident freshmen. The combination of these responses results in an 11\% lower probability of full-load completion and an annual average reduction in credits completed of 1.0. The latter implies that between 1993 and 1997 Georgia-resident freshmen completed 15,710 fewer credit hours or 3,142 individual course enrollments than non-residents. Second, the scholarship's influence on course-taking behavior is concentrated on students with GPAs on or below the scholarship-retention margin. Third, the effect increased as the income cap was lifted and more students became eligible for the award. Fourth, these freshmen credit-hour reductions represent an intertemporal substitution, not a general slowdown in academic progress. Finally, residents diverted an average of 1.65 more credits from the regular academic year to the first summer term after their matriculation, which amounts to a 72\% rise in summer course taking.
Keywords: Education; Merit-based aid; Education Finance; HOPE Scholarship (search for similar items in EconPapers)
JEL-codes: I (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-edu and nep-lab
Note: Type of Document - pdf; pages: 24
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (7) Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: http://EconPapers.repec.org/RePEc:wpa:wuwphe:0501001
Access Statistics for this paper
More papers in HEW from EconWPA
Series data maintained by EconWPA ().