Document Tag: financial aid

The racial wealth gap, financial aid, and college access (2023)

We examine how the racial wealth gap interacts with financial aid in American higher education to generate a disparate impact on college access and outcomes. Retirement savings and home equity are excluded from the formula used to estimate the amount a family can afford to pay. All else equal, omitting those assets mechanically increases the financial aid available to families that hold them. White families are more
likely to own those assets and in larger amounts. We document this issue and explore its relationship with observed differences in college attendance, types of institutions attended, degrees attained, and education debt using data from the Survey of Consumer Finances (SCF), the National Postsecondary Student Aid Study (NPSAS), and the Panel Study of Income Dynamics (PSID). We show that this treatment of assets provides an implicit subsidy worth thousands of dollars annually to students from families with above-median incomes. White
students receive larger subsidies relative to Black students and Hispanic students with similar family incomes, and this gap in subsidies is associated with disadvantages in educational advancement and student loan levels. It may explain 10 percent to 15 percent of white students’ advantage in these outcomes relative to Black students and Hispanic students.

Effects of Universal and Unconditional Cash Transfers on Child Abuse and Neglect (2023)

We estimate the effects of cash transfers on a severe measure of child welfare: maltreatment. To do so, we leverage year-to-year household variation from a universal and unconditional cash transfer, the Alaska Permanent Fund Dividend (PFD). Using linked individual-level administrative data on PFD payments and child maltreatment referrals, we show that an additional $1,000 to families in the first few months of a child’s life reduces the likelihood that a child is referred to Child Protective Services by age three by 2.0 percentage points, or 10 percent, on average. Estimates indicate that additional cash transfers also reduce child mortality.

Machine Learning Who to Nudge: Causal vs Predictive Targeting in a Field Experiment on Student Financial Aid Renewal (2023)

In many settings, interventions may be more effective for some individuals than others, so that targeting interventions may be beneficial. We analyze the value of targeting in the context of a large-scale field experiment with over 53,000 college students, where the goal was to use “nudges” to encourage students to renew their financial-aid applications before a non-binding deadline. We begin with baseline approaches to targeting. First, we target based on a causal forest that estimates heterogeneous treatment effects and then assigns students to treatment according to those estimated to have the highest treatment effects. Next, we evaluate two alternative targeting policies, one targeting students with low predicted probability of renewing financial aid in the absence of the treatment, the other targeting those with high probability. The predicted baseline outcome is not the ideal criterion for targeting, nor is it a priori clear whether to prioritize low, high, or intermediate predicted probability. Nonetheless, targeting on low baseline outcomes is common in practice, for example because the relationship between individual characteristics and treatment effects is often difficult or impossible to estimate with historical data. We propose hybrid approaches that incorporate the strengths of both predictive approaches (accurate estimation) and causal approaches (correct criterion); we show that targeting intermediate baseline outcomes is most effective, while targeting based on low baseline outcomes is detrimental. In one year of the experiment, nudging all students improved early filing by an average of 6.4 percentage points over a baseline average of 37% filing, and we estimate that targeting half of the students using our preferred policy attains around 75% of this benefit.

Does Basic Needs Funding Improve Persistence Among College Students? Findings on How HEERF Dollars Impacted Student Persistence at SNHU (2023)

In October 2022, the Center for Higher Education Policy and Practice (CHEPP) published the first of a two-part series on the use and impact of Higher Education Emergency Relief Fund (HEERF) grants at Southern New Hampshire University (SNHU) and the national challenge of accessing basic needs for today’s learners. The first paper, Basic Needs Funding for College Students: What SNHU Learned During the Pandemic, detailed learnings from SNHU’s distribution of $107 million in HEERF dollars to 51,257 qualified learners, a sample which represented a mere 7.6% application rate among potentially eligible students. Housing, food, and transportation were identified as the greatest basic needs challenges for learners based on an analysis of the data. This paper examines whether HEERF had a significant positive impact on learner persistence among a sample of learners from the initial population of HEERF recipients at SNHU (n=47,381). It includes data and analysis on the impact of emergency grants and basic needs programs on persistence for higher education students to inform national policy discussions related to expanding learner access to such supports. Key Takeaways +Three out of five learners among a national sample (n=195,000) experienced basic needs insecurities in Fall 2020 (The Hope Center, 2021). The national impact of unmet basic needs on college persistence and success is not yet quantifiable. However, there is evidence that unmet basic needs negatively impacts learner outcomes, making the basic needs support gap an urgent challenge facing higher education and our nation. +Data indicates that emergency grants contributed to learners’ academic persistence at SNHU. Students enrolled at SNHU who received HEERF emergency grants (n=47,381) were more likely to stay enrolled in the next term, when compared with control groups. Specifically, HEERF II recipients were 15.5% more likely to stay enrolled and HEERF III recipients were 8.6% more likely to stay enrolled. +As a result of these findings, SNHU approved funding to pilot an emergency grant program for learners in need. This pilot was conducted during the 2023 Spring and Summer terms. Findings from the pilot will be used to inform future projects related to this topic at SNHU.

Emergency Aid Distribution in West Texas Community Colleges (2023)

related to food and housing instability, inadequate health care and rising attendance costs. In fact, the U.S.
Department of Education recently released the first-ever national estimates of food insecurity and homelessness
and found that college students are more likely to face these issues than the general population. These financerelated
challenges have a significant and negative impact on a student’s academic performance and are
associated with stopping-out and dropping-out of college – even when the financial challenge amounts to a
relatively small dollar amount. Emergency Aid (EA) programs are one approach that colleges use to assist students
with these unforeseen challenges.
The threats students have faced in meeting their basic needs while in college have increased significantly in the
last 15 years, with less than half of all public community colleges today meeting criteria for being affordable. The
COVID-19 pandemic compounded these affordability issues as the entire sector forced students out of housing,
shut down dining halls, and shifted their instructional model overnight.
In response, Believe in Students and the then-startup mobile app called Edquity – now Beam – partnered with three
colleges in West Texas to provide emergency aid funding over two school years, from fall of 2020 through spring
of 2022, to help keep students in school as well as in their homes with their families intact. In total, $835,750
was disseminated throughout this period to help 1,937 students address food, housing, transportation, and other
expenses.
One of the partner institutions involved, Odessa College, was able to provide persistence and graduation data for
the students who received emergency aid through this program. This data shows that over 90% of all aid recipients
persisted in college the following semester or earned their degree. This outcome is particularly noteworthy
considering the national persistence rate for public two-year institutions (students continuing their education at
the same or a different institution) was 61.5% in fall 2020, while the retention rate (students returning to the same
institution) was 52.4%.
This report describes the unique partnership between community colleges in West Texas, Believe in Students,
and Beam, sharing information about how the dollars were used by students and how the partners adapted as a
result of the project. The findings and recommendations shared here are scalable to other campuses in Texas, and
the student outcomes will serve the region’s workforce and help meet the state’s 60X30 attainment goals and
workforce needs.

The Returns to College Persistence for Marginal Students: Regression Discontinuity Evidence from University Dismissal Policies (2018)

We estimate the returns to college using administrative data on both college enrollment and earnings. Exploiting that colleges dismiss low-performing students on the basis of exact GPA cutoffs, we use a regression discontinuity design to estimate the earnings impacts of college. Dismissal leads to a short-run increase in earnings and tuition savings, but the future fall in earnings is sufficiently large that 8 years after dismissal, persisting students have already recouped their up-front investment with an internal rate of return of 4.1%. We provide a variety of evidence that manipulation of the running variable does not drive our results.