Reducing Income Inequality in Educational Attainment: Experimental Evidence on the Impact of Financial Aid on College Completion (2016)
Income inequality in educational attainment is a long-standing concern,
and disparities in college completion have grown over time.
Need-based financial aid is commonly used to promote equality in
college outcomes, but its effectiveness has not been established, and
some are calling it into question. A randomized experiment is used to
estimate the impact of a private need-based grant program on college
persistence and degree completion among students from low-income
families attending 13 public universities across Wisconsin. Results indicate
that offering students additional grant aid increases the odds of
bachelor’s degree attainment over four years, helping to diminish income
inequality in higher education.