Not whether, but where? Pell grants and college choices

Celeste K. Carruthers and Jilleah G. Welch

Journal of Public Economics, 2019, vol. 172, issue C, 1-19

Abstract: Pell grants are the largest financial aid vehicle in the United States, and yet, their role in shaping students' college choices is not clear. Drawing on the enrollment decisions of four cohorts of Tennessee high school graduates and quasi-experimental Pell eligibility derived from federal formulas, we find little evidence that marginal Pell eligibility affects whether or where students enroll in college. Inframarginal estimates suggest that students sort into colleges with 11.6 cents higher tuition per dollar of Pell aid, although other measures of college quality do not significantly improve over the counterfactual. An investigation into mechanisms that might be muting student responses to Pell favors the application process itself over grant size or institutional aid flexibility.

Keywords: Education policy; Higher education; Financial aid (search for similar items in EconPapers)
JEL-codes: H75 I22 I23 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:pubeco:v:172:y:2019:i:c:p:1-19

DOI: 10.1016/j.jpubeco.2018.11.006

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