A Quasi-Experimental Estimate of the Impact of Financial Aid on College-Going

Thomas J. Kane

No 9703, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Although state and federal governments heavily subsidize the price of college, estimates of the impact of these subsidies on college enrollment have not been well-identified. I use a regression discontinuity design to study the impact of the CalGrant program in California on college going. Eligibility requires students to meet minimum thresholds on three characteristics: income, assets and high school Grade Point Average. Because there are several dimensions of eligibility, the analysis allows for specification tests, estimating any discontinuities along a given dimension of eligibility, dependent upon whether one satisfied the other two dimensions of eligibility. The paper uses a novel data collection strategy to measure subsequent college enrollment for 150,000 financial aid applicants in 1998 and 1999. The results suggest large impacts (3 to 4 percentage points) of grant eligibility on college enrollment among financial aid applicants, with larger impacts on the choice of private four-year colleges in California.

JEL-codes: I2 (search for similar items in EconPapers)
Date: 2003-05
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Note: ED PE CH
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