Closing the Gap: The Effect of a Targeted, Tuition-Free Promise on College Choices of High-Achieving, Low-Income Students

Susan Dynarski, C.J. Libassi, Katherine Michelmore and Stephanie Owen

No 25349, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: High-achieving, low-income students attend selective colleges at far lower rates than upper-income students with similar achievement. Behavioral biases, intensified by complexity and uncertainty in the admissions and aid process, may explain this gap. In a large-scale experiment we test an early commitment of free tuition at a flagship university. The intervention did not increase aid: rather, students were guaranteed before application the same grant aid that they would qualify for in expectation after admission. The offer substantially increased application (68 percent vs 26 percent) and enrollment rates (27 percent vs 12 percent). The results suggest that uncertainty, present bias, and loss aversion loom large in students’ college decisions.

JEL-codes: I0 I21 I22 I23 I24 I28 (search for similar items in EconPapers)
Date: 2018-12
New Economics Papers: this item is included in nep-ure
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