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

Author

Listed:
  • David M. Linsenmeier

    (Princeton University)

  • Harvey S. Rosen

    (Princeton University and NBER)

  • Cecilia Elena Rouse

    (Princeton University and NBER)

Abstract

We study the effects of a change in financial aid policy introduced by a Northeastern 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 about 3 percentage points, although the effect is not statistically significant. The effect among low-income minority students was about twice that size and statistically significant at the 10 percent level.

Suggested Citation

  • David M. Linsenmeier & Harvey S. Rosen & Cecilia Elena Rouse, 2001. "Financial Aid Packages and College Enrollment Decisions: An Econometric Case Study," Working Papers 838, Princeton University, Department of Economics, Industrial Relations Section..
  • Handle: RePEc:pri:indrel:459
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    File URL: http://dataspace.princeton.edu/jspui/handle/88435/dsp01m900nt41h
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    References listed on IDEAS

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    1. 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(3), pages 629-662, September.
    2. 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.
    3. Schwartz, J. Brad, 1985. "Student financial aid and the college enrollment decision: the effects of public and private grants and interest subsidies," Economics of Education Review, Elsevier, vol. 4(2), pages 129-144, April.
    4. Hoenack, Stephen A, 1971. "The Efficient Allocation of Subsidies to College Students," American Economic Review, American Economic Association, vol. 61(3), pages 302-311, June.
    5. Kane, Thomas J, 1994. "College Entry by Blacks since 1970: The Role of College Costs, Family Background, and the Returns to Education," Journal of Political Economy, University of Chicago Press, vol. 102(5), pages 878-911, October.
    6. McPherson, Michael S & Schapiro, Morton Owen, 1991. "Does Student Aid Affect College Enrollment? New Evidence on a Persistent Controversy," American Economic Review, American Economic Association, vol. 81(1), pages 309-318, March.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Thomas Kane, 2004. "Evaluating the Impact of the D.C. Tuition Assistance Grant Program," NBER Working Papers 10658, National Bureau of Economic Research, Inc.
    2. Susan Dynarski, 2002. "The Behavioral and Distributional Implications of Aid for College," American Economic Review, American Economic Association, vol. 92(2), pages 279-285, May.

    More about this item

    Keywords

    financial aid; grants; loans; jobs;

    JEL classification:

    • P27 - Economic Systems - - Socialist Systems and Transition Economies - - - Performance and Prospects
    • P28 - Economic Systems - - Socialist Systems and Transition Economies - - - Natural Resources; Environment

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