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Early commitment on financial aid and college decision making of poor students: Evidence from a randomized evaluation in rural China

  • Liu, Chengfang
  • Zhang, Linxiu
  • Luo, Renfu
  • Wang, Xiaobing
  • Rozelle, Scott
  • Sharbono, Brian
  • Adams, Jennifer
  • Shi, Yaojiang
  • Yue, Ai
  • Li, Hongbin
  • Glauben, Thomas

Many educational systems have struggled with the question about how best to give out financial aid. In particular, if students do not know the amount of financial aid that they can receive before they make a decision about where to go to college and what major to study, it may distort their decision. This study utilizes an experiment (implemented by the authors as a Randomized Control Trial) to analyze whether or not an alternative way of providing financial aid--by providing an early commitment on financial aid during the student's senior year of high school instead of after entering college--affects the college decision making of poor students in rural China. We find that if early commitments are made early enough; and they are large enough, students will make less distorting college decisions.

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Article provided by Elsevier in its journal Economics of Education Review.

Volume (Year): 30 (2011)
Issue (Month): 4 (August)
Pages: 627-640

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Handle: RePEc:eee:ecoedu:v:30:y:2011:i:4:p:627-640
Contact details of provider: Web page: http://www.elsevier.com/locate/econedurev

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  1. Balderston, Frederick, 1997. "Tuition and financial aid in higher education: The case of California," Economics of Education Review, Elsevier, vol. 16(3), pages 337-343, June.
  2. Baum, Sandra R. & Schwartz, Saul, 1988. "Merit aid to college students," Economics of Education Review, Elsevier, vol. 7(1), pages 127-134, February.
  3. Christopher Avery & Caroline Minter Hoxby, 2004. "Do and Should Financial Aid Packages Affect Students' College Choices?," NBER Chapters, in: College Choices: The Economics of Where to Go, When to Go, and How to Pay For It, pages 239-302 National Bureau of Economic Research, Inc.
  4. Hongbin Li & Pak Wai Liu & Ning Ma & Junsen Zhang, 2005. "Does Education Pay in Urban China? Estimating Returns to Education Using Twins," Discussion Papers 00013, Chinese University of Hong Kong, Department of Economics.
  5. Thomas J. Kane, 2003. "A Quasi-Experimental Estimate of the Impact of Financial Aid on College-Going," NBER Working Papers 9703, National Bureau of Economic Research, Inc.
  6. Singell, Larry Jr., 2004. "Come and stay a while: does financial aid effect retention conditioned on enrollment at a large public university?," Economics of Education Review, Elsevier, vol. 23(5), pages 459-471, October.
  7. Olivia, Susan & Gibson, John & Rozelle, Scott & Huang, Jikun & Deng, Xiangzheng, 2011. "Mapping poverty in rural China: how much does the environment matter?," Environment and Development Economics, Cambridge University Press, vol. 16(02), pages 129-153, April.
  8. Schwartz, J. Brad, 1985. "Student financial aid and the college enrollment decision: the effects of public and private grants and interest subsidies," Economics of Education Review, Elsevier, vol. 4(2), pages 129-144, April.
  9. Terry Long, B.Bridget, 2004. "How have college decisions changed over time? An application of the conditional logistic choice model," Journal of Econometrics, Elsevier, vol. 121(1-2), pages 271-296.
  10. David M. Linsenmeier & Harvey S. Rosen & Cecilia Elena Rouse, 2006. "Financial Aid Packages and College Enrollment Decisions: An Econometric Case Study," The Review of Economics and Statistics, MIT Press, vol. 88(1), pages 126-145, February.
  11. Katharine G Abraham Melissa Clark, 2003. "Financial Aid and Students College Decisions Evidence from the District of Columbias Tuition Assistance Grant Program," Mathematica Policy Research Reports 328d6cb850c54baa8e93795d5, Mathematica Policy Research.
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