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Financial Aid Packages and College Enrollment Decisions: An Econometric Case Study

  • David M. Linsenmeier

    (Princeton University)

  • Harvey S. Rosen

    (Princeton University and NBER)

  • Cecilia Elena Rouse

    (Princeton University and NBER)

We study the effects of a change in financial aid policy introduced by an anonymous university in 1998. Prior to that time, the university's financial aid packages for low-income students consisted of grants, loans, and campus jobs. After the change, the entire loan portion of the package for low-income students was replaced with grants. We find the program increased the likelihood of matriculation by low-income students by approximately 3 percentage points, although the effect is not statistically significant. The effect among low-income minority students was between 8 and 10 percentage points and statistically significant at the 10% level. © 2006 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.

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File URL: http://www.mitpressjournals.org/doi/pdf/10.1162/rest.2006.88.1.126
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Article provided by MIT Press in its journal Review of Economics and Statistics.

Volume (Year): 88 (2006)
Issue (Month): 1 (February)
Pages: 126-145

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Handle: RePEc:tpr:restat:v:88:y:2006:i:1:p:126-145
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  1. Susan M. Dynarski, 1999. "Does Aid Matter? Measuring the Effect of Student Aid on College Attendance and Completion," NBER Working Papers 7422, National Bureau of Economic Research, Inc.
  2. Dynarski, Susan, 2000. "Hope for Whom? Financial Aid for the Middle Class and Its Impact on College Attendance," National Tax Journal, National Tax Association, vol. 53(n. 3), pages 629-62, September.
  3. Martin Feldstein, 1992. "College Scholarship Rules and Private Saving," NBER Working Papers 4032, National Bureau of Economic Research, Inc.
  4. Susan Dynarski, 2000. "Hope for Whom? Financial Aid for the Middle Class and Its Impact on College Attendance," NBER Working Papers 7756, National Bureau of Economic Research, Inc.
  5. Ronald G. Ehrenberg & Daniel R. Sherman, 1984. "Optimal Financial Aid Policies for a Selective University," Journal of Human Resources, University of Wisconsin Press, vol. 19(2), pages 202-230.
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