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How do Financial Aid Policies Affect Colleges?: The Institutional Impact of the Georgia HOPE Scholarship

Bridget Long

Journal of Human Resources, 2004, vol. 39, issue 4

Abstract: This paper examines the effects of financial aid policies on the behavior of post-secondary institutions. Using the introduction of the Georgia HOPE Scholarship as a natural experiment, it investigates the impact of the policy on college pricing, institution aid, expenditures, and state appropriations. The results suggest that four-year colleges in Georgia, particularly private institutions, did respond by increasing student charges. In the most extreme case, colleges recouped approximately 30 percent of the scholarship award. As a result, the institutional responses reduced the intended benefit of the scholarship and increased the cost of college for nonrecipients.

Date: 2004
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