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A Quasi-Experimental Estimate of the Impact of Financial Aid on College-Going

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  • Thomas J. Kane

Abstract

Although state and federal governments heavily subsidize the price of college, estimates of the impact of these subsidies on college enrollment have not been well-identified. I use a regression discontinuity design to study the impact of the CalGrant program in California on college going. Eligibility requires students to meet minimum thresholds on three characteristics: income, assets and high school Grade Point Average. Because there are several dimensions of eligibility, the analysis allows for specification tests, estimating any discontinuities along a given dimension of eligibility, dependent upon whether one satisfied the other two dimensions of eligibility. The paper uses a novel data collection strategy to measure subsequent college enrollment for 150,000 financial aid applicants in 1998 and 1999. The results suggest large impacts (3 to 4 percentage points) of grant eligibility on college enrollment among financial aid applicants, with larger impacts on the choice of private four-year colleges in California.

Suggested Citation

  • Thomas J. Kane, 2003. "A Quasi-Experimental Estimate of the Impact of Financial Aid on College-Going," NBER Working Papers 9703, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:9703
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    References listed on IDEAS

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    1. Susan M. Dynarski, 2003. "Does Aid Matter? Measuring the Effect of Student Aid on College Attendance and Completion," American Economic Review, American Economic Association, vol. 93(1), pages 279-288, March.
    2. Dick, Andrew W. & Edlin, Aaron S., 1997. "The implicit taxes from college financial aid," Journal of Public Economics, Elsevier, vol. 65(3), pages 295-322, September.
    3. Hahn, Jinyong & Todd, Petra & Van der Klaauw, Wilbert, 2001. "Identification and Estimation of Treatment Effects with a Regression-Discontinuity Design," Econometrica, Econometric Society, vol. 69(1), pages 201-209, January.
    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.
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    JEL classification:

    • I2 - Health, Education, and Welfare - - Education

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