Improving College Access and Success for Low-Income Students: Evidence from a Large Need-Based Grant Program

Abstract

Using comprehensive administrative data on France's single largest financial aid program, this paper provides new evidence on the impact of large-scale need-based grant programs on the college enrollment decisions, persistence and graduation rates of low-income students. We exploit sharp discontinuities in the grant eligibility formula to identify the impact of aid on student outcomes at di↵erent levels of study. We find that eligibility for an annual cash allowance of 1,500 euros increases college enrollment rates by up to 5 percentage points. Moreover, we show that need-based grants have positive e↵ects on student persistence and degree completion.JEL Classification: H52, I22, I28, J24, J38

Parental Job Loss and Children's Long-Term Outcomes: Evidence from 7 Million Fathers' Layoffs

“…I shed light on this question by examining additional microdata on college finance gathered by Sallie Mae and the Department of Education. The results are consistent with cross-sectional correlations between parental income and college spending (i.e., Engel curves) along with evidence on large estimated effects of college price on attendance (Deming and Dynarski 2010;Castleman and Long 2013;Fack and Grenet 2015). The key insight is that layoffs, despite causing large income losses, most likely reduce parental college spending by only a few hundred dollars, much of which may be offset by greater financial aid.…”

“…Specifically, in Section IV, I estimate that $1,000 of layoff-induced parental income losses reduces college enrollment by 0.07 percentage points. In comparison, prior literature has found that a $1,000 decrease in net college price raises enrollment by 3-5 full percentage points (e.g., Deming and Dynarski 2010, Castleman and Long 2013, and Fack and Grenet 2015. This comparison suggests that financial aid is over 100 times more effective at raising enrollment than late-childhood parental income per dollar of transfers.…”

Parental Resources and College Attendance: Evidence from Lottery Wins

“…This would be consistent with the college price effects literature that often finds large effects(Dynarski, 2003;Kane, 2003;Kane, 2007;Deming and Dynarski, 2010;Fack and Grenet, 2015;Castleman and Long, 2016;Denning, 2017). While we cannot test this directly, the finding that financial aid crowd-out does not influence enrollment suggests one of three possibilities: lower-SES parents do provide support to their children, which makes up for the deleterious effects of the removal of financial aid; these parents do not provide support but the removal of financial aid has little effect on college-going; or informational frictions about the operation of the financial aid system exist.…”

Countercyclical school attainment and intergenerational mobility

“…Perhaps in part as a consequence of these rather low costs of post-compulsory secondary education, the 15-19 year-old enrollment rate in France in 2015 (84.1%) was above that of the United-States (79.5%), the United-Kingdom (82.8%), or the OECD (unweighted) average (82.8%). 7 The costs of post-compulsory tertiary education have been documented to be much larger, and are estimated to be around e6300 as of 2010 by Fack and Grenet (2015), mostly as a result of higher living expenses. A system of grants cover however a substantial share of this financial burden for low-income households.…”