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Should College Be "Free"? Evidence on Free College, Early Commitment, and Merit Aid from an Eight-Year Randomized Trial

Author

Listed:
  • Douglas N. Harris
  • Jonathan Mills

Abstract

We provide evidence on the effects of college financial aid from an eight-year randomized trial offering ninth graders a $12,000 merit-based grant. The program was designed to be free of tuition/fees at community colleges and substantially lower the cost of four-year colleges. During high school, eligibility for the grant increased students' expectations of college attendance and low-cost college preparation effort, but not higher-cost effort. The program may have increased graduation from two-year colleges but did not affect overall college entry, graduation, employment, incarceration, or teen pregnancy. Additional analysis helps explain these modest effects and variation in results across prior studies.

Suggested Citation

  • Douglas N. Harris & Jonathan Mills, 2025. "Should College Be "Free"? Evidence on Free College, Early Commitment, and Merit Aid from an Eight-Year Randomized Trial," American Economic Journal: Economic Policy, American Economic Association, vol. 17(3), pages 373-406, August.
    • Handle: RePEc:aea:aejpol:v:17:y:2025:i:3:p:373-406
    DOI: 10.1257/pol.20230100
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    References listed on IDEAS

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    1. Webber, Douglas A., 2016. "Are college costs worth it? How ability, major, and debt affect the returns to schooling," Economics of Education Review, Elsevier, vol. 53(C), pages 296-310.
    2. Daniel Kahneman & Amos Tversky, 2013. "Prospect Theory: An Analysis of Decision Under Risk," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 6, pages 99-127, World Scientific Publishing Co. Pte. Ltd..
    3. Kane, Thomas J & Rouse, Cecilia Elena, 1995. "Labor-Market Returns to Two- and Four-Year College," American Economic Review, American Economic Association, vol. 85(3), pages 600-614, June.
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    More about this item

    JEL classification:

    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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