Financing College Opportunity

Michael K. McLendon, David A. Tandberg and Nicholas W. Hillman

The ANNALS of the American Academy of Political and Social Science, 2014, vol. 655, issue 1, 143-162

Abstract: Some states invest relatively heavily in financial aid programs that benefit lower-income citizens, while other states concentrate their investment in programs that benefit students from higher-income backgrounds. States also vary in their levels of direct appropriations to campuses, a form of public subsidy that has long been viewed as benefitting middle-income citizens. What factors influence states to allocate higher education subsidies in a more or a less redistributive manner? This article reports on a study that examined sources of variation in state spending on need-based aid, merit-based aid, and appropriations over the period 1990–2010. Findings document relationships among spending patterns and structural and political conditions of states, indicating a “trade-off†between spending on merit- and need-based aid; as states invest more in the former, they reduce spending on the latter. We also show that the presence of a Republican governor and the strength of Republican representation in statehouses each is associated with increased state spending on need-based financial aid. Our results further show that increased wealth is positively associated with state spending on merit-based financial aid programs and state appropriations for higher education, but not need-based financial aid. We also find distinctive patterns of state support for higher education depending on the degree of centralization of a state’s governance arrangement for higher education; namely, the presence of a highly centralized structure is associated with decreased spending on merit-based aid programs and increased state appropriations to colleges and universities.

Keywords: higher education; state policy; postsecondary finance; politics of policy; college attainment (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:sae:anname:v:655:y:2014:i:1:p:143-162

DOI: 10.1177/0002716214540849

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