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The Enrollment Effects of Merit-Based Financial Aid: Evidence from Georgia's HOPE Scholarship

Christopher Cornwell (), David Mustard () and Deepa Sridhar

HEW from EconWPA

Abstract: This paper examines the effects of Georgia's merit-based HOPE Scholarship on college enrollment. Introduced in 1993, the HOPE Scholarship covers tuition, fees, and book expenses for students attending Georgia public colleges, and provides a subsidy of comparable value to students attending in-state private colleges, without any income restrictions. Treating HOPE as a natural experiment, we contrast college enrollment in Georgia with those in the other member states of the Southern Regional Educational Board using IPEDS data for the period 1988-97. We estimate that the HOPE increased total freshmen enrollment by 5.9 percent, with the gains concentrated in 4-year schools. For freshmen recently graduated from high school attending 4-year colleges, two-thirds of the program effect is explained by a decrease in students leaving the state. Both white and black enrollments increased because of HOPE, with the state's historically-black institutions playing an important role. Finally, the total HOPE-induced enrollment increase represents only 15 percent freshmen scholarship recipients.

Keywords: Higher Education; Enrollment; HOPE; Merit-based Aid (search for similar items in EconPapers)
JEL-codes: I (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-lab
Date: 2005-01-05
Note: Type of Document - pdf; pages: 33
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Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwphe:0501002

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