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Simulating the Longitudinal Effects of Changes in Financial Aid on Student Departure from College

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  • Stephen L. DesJardins
  • Dennis A. Ahlburg
  • Brian P. McCall

Abstract

We use the estimates from a hazard model of college student departure to simulate how changes in financial-aid packaging affect students' departure decisions over time. We find that changing loans to scholarships, as Princeton has recently done, has a large impact on retention and that frontloading aid has a more modest impact. Our results also suggest that financial aid represents more to the student than just the dollar value of the aid offered. Increased knowledge about the temporal effects of different types of financial aid will help policy makers make more informed choices about the structure of financial aid packages.

Suggested Citation

  • Stephen L. DesJardins & Dennis A. Ahlburg & Brian P. McCall, 2002. "Simulating the Longitudinal Effects of Changes in Financial Aid on Student Departure from College," Journal of Human Resources, University of Wisconsin Press, vol. 37(3), pages 653-679.
  • Handle: RePEc:uwp:jhriss:v:37:y:2002:i:3:p:653-679
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    Cited by:

    1. Maria Ines Barbosa Camargo & Antonio García Sánchez & Mª Luisa Ridao Carlini, 2016. "Influencia de las ayudas financieras en el acceso a estudios universitarios: El caso de Colombia," Investigaciones de Economía de la Educación volume 11,in: José Manuel Cordero Ferrera & Rosa Simancas Rodríguez (ed.), Investigaciones de Economía de la Educación 11, edition 1, volume 11, chapter 4, pages 91-110 Asociación de Economía de la Educación.
    2. Jason M. Lindo & Nicholas J. Sanders & Philip Oreopoulos, 2010. "Ability, Gender, and Performance Standards: Evidence from Academic Probation," American Economic Journal: Applied Economics, American Economic Association, vol. 2(2), pages 95-117, April.
    3. Alex Solis, 2017. "Credit Access and College Enrollment," Journal of Political Economy, University of Chicago Press, vol. 125(2), pages 562-622.
    4. Glocker, Daniela, 2011. "The effect of student aid on the duration of study," Economics of Education Review, Elsevier, vol. 30(1), pages 177-190, February.
    5. Stephen L. DeJardins & Dennis A. Ahlburg & Brian McCall, "undated". "An Integrated Model of Application, Admission, Enrollment, and Financial Aid," Working Papers 0104, Human Resources and Labor Studies, University of Minnesota (Twin Cities Campus).
    6. Maria Knoth Humlum & Rune Majlund Vejlin, 2013. "The Responses Of Youth To A Cash Transfer Conditional On Schooling: A Quasi‐Experimental Study," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 28(4), pages 628-649, June.
    7. Scott-Clayton, Judith & Minaya, Veronica, 2016. "Should student employment be subsidized? Conditional counterfactuals and the outcomes of work-study participation," Economics of Education Review, Elsevier, vol. 52(C), pages 1-18.
    8. DesJardins, Stephen L. & Ahlburg, Dennis A. & McCall, Brian P., 2006. "The effects of interrupted enrollment on graduation from college: Racial, income, and ability differences," Economics of Education Review, Elsevier, vol. 25(6), pages 575-590, December.
    9. Jin Chen & Don Hossler, 2017. "The Effects of Financial Aid on College Success of Two-Year Beginning Nontraditional Students," Research in Higher Education, Springer;Association for Institutional Research, vol. 58(1), pages 40-76, February.
    10. Eric Bettinger, 2004. "How Financial Aid Affects Persistence," NBER Chapters,in: College Choices: The Economics of Where to Go, When to Go, and How to Pay For It, pages 207-238 National Bureau of Economic Research, Inc.
    11. Angela Boatman & Bridget Terry Long, 2016. "Does Financial Aid Impact College Student Engagement?," Research in Higher Education, Springer;Association for Institutional Research, vol. 57(6), pages 653-681, September.
    12. Dennis A. Ahlburg & Brian P. Mccall & In-gang Na, "undated". "Time to Dropout From College: A Hazard Model with Endogenous Waiting," Working Papers 0102, Human Resources and Labor Studies, University of Minnesota (Twin Cities Campus).
    13. David L. Sjoquist & John V. Winters, 2015. "State Merit-Based Financial Aid Programs And College Attainment," Journal of Regional Science, Wiley Blackwell, vol. 55(3), pages 364-390, June.
    14. Bulman, George, 2017. "Weighting recent performance to improve college and labor market outcomes," Journal of Public Economics, Elsevier, pages 97-108.
    15. Jakobsen, Vibeke & Rosholm, Michael, 2003. "Dropping out of School? A Competing Risks Analysis of Young Immigrants’ Progress in the Educational System," IZA Discussion Papers 918, Institute for the Study of Labor (IZA).
    16. Elliott, William & Friedline, Terri, 2013. "“You pay your share, we’ll pay our share”: The college cost burden and the role of race, income, and college assets," Economics of Education Review, Elsevier, vol. 33(C), pages 134-153.
    17. Kerkvliet, Joe & Nowell, Clifford, 2005. "Does one size fit all? University differences in the influence of wages, financial aid, and integration on student retention," Economics of Education Review, Elsevier, vol. 24(1), pages 85-95, February.
    18. 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.
    19. Hongtao Yue & Xuanning Fu, 2017. "Rethinking Graduation and Time to Degree: A Fresh Perspective," Research in Higher Education, Springer;Association for Institutional Research, vol. 58(2), pages 184-213, March.
    20. Wiederspan, Mark, 2016. "Denying loan access: The student-level consequences when community colleges opt out of the Stafford loan program," Economics of Education Review, Elsevier, vol. 51(C), pages 79-96.
    21. Jacob P. K. Gross & Matthew S. Berry, 2016. "The Relationship Between State Policy Levers and Student Mobility," Research in Higher Education, Springer;Association for Institutional Research, vol. 57(1), pages 1-27, February.

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