Money for Nothing? The Impact of Changes in the Pell Grant Program on Institutional Revenues and the Placement of Needy Students

Bradley R. Curs (), Larry D. Singell, Jr. () and Glen R. Waddell ()
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Bradley R. Curs: Educational Leadership and Policy Analysis, University of Missouri Columbia
Larry D. Singell, Jr.: Department of Economics, University of Oregon
Glen R. Waddell: Department of Economics, University of Oregon

Education Finance and Policy, 2007, vol. 2, issue 3, 228-261

Abstract: 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. © 2007 American Education Finance Association

Keywords: Pell Grant program; federal aid; institutional revenue; low-income students (search for similar items in EconPapers)
JEL-codes: I20 I21 I22 I28 (search for similar items in EconPapers)
Date: 2007
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Citations: View citations in EconPapers (4)

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