Does Federal Financial Aid Affect College Enrollment? Evidence from Drug Offenders and the Higher Education Act of 1998
AbstractIn 2001, amendments to the Higher Education Act made people convicted of drug offenses ineligible for federal financial aid for up to two years after their conviction. Using rich data on educational outcomes and drug charges in the NLSY 1997, we show that this law change had a large negative impact on the college attendance of students with drug convictions. On average, the temporary ban on federal financial aid increased the amount of time between high school graduation and college enrollment by about two years, and we also present suggestive evidence that affected students were less likely to ever enroll in college. Students living in urban areas and those whose mothers did not attend college appear to be the most affected by these amendments. Importantly, we do not find that the law deterred young people from committing drug felonies nor did it substantively change the probability that high school students with drug convictions graduated from high school. We find no evidence of a change in college enrollment of students convicted of non-drug crimes, or of those charged by not convicted of drug offenses. In contrast to much of the existing research, we conclude that, for this high-risk group of students, eligibility for federal financial aid strongly impacts college investment decisions.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 18749.
Date of creation: Feb 2013
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Find related papers by JEL classification:
- H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
- I28 - Health, Education, and Welfare - - Education - - - Government Policy
- K14 - Law and Economics - - Basic Areas of Law - - - Criminal Law
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