Leaving Home for University or Commuting? The Impact of Relocation Scholarships on Academic Progression

This study examines the causal impact of additional financial aid granted to students living far from university on their academic performance. It exploits an Italian policy that supports the relocation of scholarship recipients to the university city. Using a fuzzy regression discontinuity design based on a travel-time eligibility threshold, we compare the academic outcomes of scholarship holders enrolled at a medium-sized public university. Results indicate that relocated students accumulate credits more slowly and achieve lower average grades than comparable commuters, with no evidence that relocated students trade exam quality for quantity. A mediation analysis suggests that these effects may be driven by time-management difficulties and the limited adequacy of the financial support to cover living expenses. By focusing on an overlooked dimension of student aid, the paper contributes to the understanding of how financial support mechanisms interact with students’ living arrangements and provides novel causal evidence on the interplay between financial aid and students’ living arrangements in higher education.