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Money for Nothing? The Impact of Changes in the Pell Grant Program on Institutional Revenues and the Placement of Needy Students

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Listed:
  • Bradley R. Curs

    () (Educational Leadership and Policy Analysis, University of Missouri Columbia)

  • Larry D. Singell, Jr.

    () (Department of Economics, University of Oregon)

  • Glen R. Waddell

    () (Department of Economics, University of Oregon)

Abstract

Using new institutional-level data, we assess the impact of changing federal aid levels on institutional-level Pell revenues. Using various policy instruments associated with Pell generosity, we quantify the sensitivity of institutional Pell revenues to the generosity of the Pell Grant program. In general, we find an elastic response of institutional Pell revenues with respect to the maximum Pell award, where other policy instruments associated with Pell generosity are found to have an inelastic or zero impact. We also document significant asymmetries across institutional selectivity, both in magnitude and in terms of which channel accounts for the measured sensitivity—award values directly or institutional enrollment. In the end, exogenous changes in the federal Pell Grant program are found to correlate strongly with changes in the distribution of needy students and revenues across institutional quality. © 2007 American Education Finance Association

Suggested Citation

  • Bradley R. Curs & Larry D. Singell, Jr. & Glen R. Waddell, 2007. "Money for Nothing? The Impact of Changes in the Pell Grant Program on Institutional Revenues and the Placement of Needy Students," Education Finance and Policy, MIT Press, vol. 2(3), pages 228-261, June.
  • Handle: RePEc:tpr:edfpol:v:2:y:2007:i:3:p:228-261
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    Cited by:

    1. Darolia, Rajeev, 2013. "Integrity versus access? The effect of federal financial aid availability on postsecondary enrollment," Journal of Public Economics, Elsevier, vol. 106(C), pages 101-114.
    2. Rajeev Darolia, 2015. "Messengers of Bad News or Bad Apples? Student Debt and College Accountability," Education Finance and Policy, MIT Press, vol. 10(2), pages 277-299, March.

    More about this item

    Keywords

    Pell Grant program; federal aid; institutional revenue; low-income students;

    JEL classification:

    • I20 - Health, Education, and Welfare - - Education - - - General
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy

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