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Paying for grades: Impact of merit-based financial aid on educational quality

Author

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  • Gary T. Henry

    (Applied Research Center, Andrew Young School of Policy Studies, Georgia State University, Atlanta, Georgia)

  • Ross Rubenstein

Abstract

In contrast to education reform efforts that target teachers and schools, merit-based financial aid for college increases the incentives for high school students and their families to directly affect the quality of education by investing more time and effort in schoolwork. Large-scale merit-based aid programs, such as Georgia's HOPE Scholarship, seek to improve education by encouraging students to meet higher standards, in this case by obtaining a 3.0 grade point average in high school and college. Since the HOPE program began in 1993, the number of high school graduates qualifying for the aid has steadily increased to more than 38,000 graduates in the class of 1998, or 59.5 percent of the graduating class. At the same time, the relationship between grades and achievement has remained consistent or, in some cases, improved since HOPE began. In fact, African-American males and females with a 3.1 high school core course grade point average have increased their average Scholastic Assessment Test (SAT) scores by more than 20 points. This indicates that merit-based aid has improved the quality of K-12 education in Georgia and reduced racial performance disparities by motivating students and their families to commit greater effort to schooling. © 2002 by the Association for Public Policy Analysis and Management.

Suggested Citation

  • Gary T. Henry & Ross Rubenstein, 2002. "Paying for grades: Impact of merit-based financial aid on educational quality," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 21(1), pages 93-109.
  • Handle: RePEc:wly:jpamgt:v:21:y:2002:i:1:p:93-109
    DOI: 10.1002/pam.1042
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    File URL: http://hdl.handle.net/10.1002/pam.1042
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    References listed on IDEAS

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    1. 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.
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    Cited by:

    1. Eric Bettinger & Oded Gurantz & Laura Kawano & Bruce Sacerdote, 2016. "The Long Run Impacts of Merit Aid: Evidence from California’s Cal Grant," NBER Working Papers 22347, National Bureau of Economic Research, Inc.
    2. Susan Dynarski, 2004. "The New Merit Aid," NBER Chapters,in: College Choices: The Economics of Where to Go, When to Go, and How to Pay For It, pages 63-100 National Bureau of Economic Research, Inc.
    3. Joshua Angrist & Philip Oreopoulos & Tyler Williams, 2014. "When Opportunity Knocks, Who Answers?: New Evidence on College Achievement Awards," Journal of Human Resources, University of Wisconsin Press, vol. 49(3), pages 572-610.
    4. Dynarski, Susan, 2002. "The Consequences of Merit Aid," Working Paper Series rwp02-051, Harvard University, John F. Kennedy School of Government.
    5. David L. Sjoquist & John V. Winters, 2015. "State Merit Aid Programs and College Major: A Focus on STEM," Journal of Labor Economics, University of Chicago Press, vol. 33(4), pages 973-1006.
    6. Susan Dynarski, 2008. "Building the Stock of College-Educated Labor," Journal of Human Resources, University of Wisconsin Press, vol. 43(3), pages 576-610.
    7. Cornwell, Christopher & Lee, Kyung Hee & Mustard, David B., 2006. "The Effects of State-Sponsored Merit Scholarships on Course Selection and Major Choice in College," IZA Discussion Papers 1953, Institute for the Study of Labor (IZA).
    8. Robert Metcalfe & Simon Burgess and Steven Proud, 2011. "Student effort and educational attainment: Using the England football team to identify the education production function," Economics Series Working Papers 586, University of Oxford, Department of Economics.
    9. 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.
    10. Robert Bozick & Trey Miller, 2014. "In-State College Tuition Policies for Undocumented Immigrants: Implications for High School Enrollment Among Non-citizen Mexican Youth," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 33(1), pages 13-30, February.
    11. Steven McMullen, 2011. "How do Students Respond to Labor Market and Education Incentives? An Analysis of Homework Time," Journal of Labor Research, Springer, vol. 32(3), pages 199-209, September.
    12. Alejandra Mizala & Pilar Romaguera, 2004. "Teachers’ Salary Structure and Incentives in Chile," Documentos de Trabajo 193, Centro de Economía Aplicada, Universidad de Chile.
    13. Sjoquist, David L. & Winters, John V., 2013. "The effects of HOPE on post-college retention in the Georgia workforce," Regional Science and Urban Economics, Elsevier, vol. 43(3), pages 479-490.
    14. Emiliana Vegas & Ilana Umansky, 2005. "Improving Teaching and Learning through Effective Incentives : What Can We Learn from Education Reforms in Latin America?," World Bank Other Operational Studies 8694, The World Bank.
    15. Uwe DUlleck & Juliana Silva-Goncalves & Benno Torgler, 2014. "Impact Evaluation of an Incentive Program on Educational Achievement of Indigenous Students," QuBE Working Papers 026, QUT Business School.
    16. David Sjoquist & John Winters, 2015. "The effect of Georgia’s HOPE scholarship on college major: a focus on STEM," IZA Journal of Labor Economics, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-29, December.
    17. Timothy G. Conley & Christopher R. Taber, 2011. "Inference with "Difference in Differences" with a Small Number of Policy Changes," The Review of Economics and Statistics, MIT Press, vol. 93(1), pages 113-125, February.
    18. Cowan, Benjamin W. & White, Dustin R., 2015. "The effects of merit-based financial aid on drinking in college," Journal of Health Economics, Elsevier, vol. 44(C), pages 137-149.
    19. Ross Rubenstein, 2003. "Helping Outstanding Pupils Educationally: Public Policy Issues of the Georgia HOPE Scholarship Program and the Lottery for Education," Center for Policy Research Policy Briefs 25, Center for Policy Research, Maxwell School, Syracuse University.
    20. Pascua, Liberty & Chang, Chew-Hung, 2015. "Using intervention-oriented evaluation to diagnose and correct students’ persistent climate change misconceptions: A Singapore case study," Evaluation and Program Planning, Elsevier, vol. 52(C), pages 70-77.

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