Document Tag: financial aid

The Costs of College Attendance: Examining Variation and Consistency in Institutional Living Cost Allowances (2017)

Discussions of college costs often focus on tuition and fees, but living cost allowances for room, board, and other expenses account for more than half of the total cost of attending college. The allowances, developed by colleges and universities, also affect student eligibility for federal financial aid and the accuracy of accountability systems. This study examined institutional variation in living cost allowances and assessed the consistency of allowances by comparing them to living cost estimates specific to the college’s region. Results across multiple specifications indicated that nearly half of all colleges provide living-cost allowances at least 20% above or below estimated county-level living expenses.

Financial Aid Nudges: A National Experiment With Informational Interventions (2022)

Despite high prices, many college students do not re-file the Free Application for Federal Student Aid (FAFSA) or file late, making college less affordable. Low-cost technological interventions delivering personalized information and/or advising may improve refiling and academic outcomes, but questions remain regarding the efficacy of this approach at scale. This multi-pronged randomized experiment tested informational and framing text message interventions for a national sample of approximately 10,000 undergraduates. The text outreach caused earlier FAFSA re-filing for some students. However, gains in re-filing during the active intervention period were not sustained after the intervention concluded and did not translate into additional federal financial aid or improved postsecondary persistence or attainment. Implications for the scaling and targeting of nudging are discussed.

Accelerating College Knowledge: A Fiscal Analysis of a Targeted Early Commitment Pell Grant Program (2014)

The persistently low college attainment rates of youth from poor families are partly attributable to their uncertainty about college affordability. The current federal financial aid system does not provide specific information about college costs until just before college enrollment and the information is only available to students completing a complex application. Evidence suggests this late timing reduces their motivation and ability to adequately prepare for college. This paper evaluates the fiscal consequences of instead making an early commitment of the full Pell Grant to eighth graders from needy families, using a simplified eligibility process. Analyses conducted using the Panel Study of Income Dynamics suggest the predicted costs are low relative to the benefits estimated using prior research findings. A simulation of the estimated fiscal effects indicates that Pell program costs would grow by approximately $1.5 billion annually and the benefits would exceed the costs by approximately $600 million.

Managing to Make It: The College Trajectories of Traditional-age Students with Children (2011)

Students with children are a growing presence in higher education, but apart from being labeled “nontraditional” their prospects for degree completion are poorly understood. How does parenting while in college make students vulnerable? How does it make them stronger? To address these questions this exploratory study draws on a panel study of young, low-income Wisconsin college students that includes administrative, survey, and interview data. Findings suggest that while parenting students have divergent college pathways compared to their peers, those pathways do not always indicate disadvantage. At the same time, it is also clear that they would benefit from additional supports.

Putting College First: How Social and Financial Capital Impact Labor Market Participation Among Low‐Income Undergraduates (2011)

Most undergraduates work despite evidence that working while in college is associated with lower
rates of degree completion. Prior research indicates that the propensity to work varies by both family
income and education, suggesting that both financial and social capital operate to reduce work and
preserve educational advantage. We test that hypothesis with a sample of 3,000 low‐income
Wisconsin undergraduates enrolled in the state’s 42 public two‐year and four‐year colleges and
universities. Leveraging an experiment that distributes financial aid via lottery, we identify effects of
financial capital on labor force participation that are comparable in magnitude to the positive benefits
of social capital obtained through parental education. Specifically, the allocation of additional financial
aid reduces the hours worked by low‐income students with high school‐educated parents to the point
that it nearly fully offsets the socioeconomic advantage (in terms of fewer hours worked) that accrues
to students from college‐educated families. Need‐based financial aid, it appears, may be an equalizer
that promises to reduce labor force participation and enhance college attainment.

Working for College: The Causal Impacts of Financial Grants on Undergraduate Employment (2016)

One way in which financial aid is thought to promote college success is by minimizing the time students
spend working. Yet, little research has examined if this intended first-order effect occurs, and results
are mixed. We leverage a randomized experiment and find that students from low-income families in
Wisconsin offered additional grant aid were 5.88 percentage points less likely to work and worked 1.69
fewer hours per week than similar peers, an 8.56% and 14.35% reduction, respectively. Students
offered the grant also improved qualitative aspects of their work experiences; they were less likely to
work extensively, during the morning hours, or overnight. Grant aid thus appears to partially offset
student employment, possibly improving prospects for academic achievement and attainment.

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.

A Matter of Trust: Applying Insights From Social Psychology to Make College Affordable (2016)

The rising price of higher education threatens educational opportunity and social mobility for the most vulnerable Americans.
Increasing college attendance benefits individuals and society, but efforts to reduce the price via financial aid rely primarily on
economic theory: emphasizing short-term investments for long-term gains, and aiming for efficiency by targeting a narrow band
of the population. Yet financial aid as currently implemented fails to effectively counter price barriers to college attainment.
We argue that these failures are due, in part, to policies that were built on a narrow set of behavioral assumptions about
the role of pricing in individuals’ decisions to attend college. Insights from social psychology highlight decisions’ relational
processes and contexts. Existing policy failures have eroded public trust in financial aid as a legitimate, viable mechanism for
college affordability. Cost-effective reforms that rebuild trust are a promising direction for future policy making.