Looking Beyond Enrollment: The Causal Effect of Need-Based Grants on College Access, Persistence, and Graduation

Abstract

Gaps in average college success among students of differing backgrounds have persisted in the United States for decades. One of the primary ways that federal and state governments have attempted to ameliorate such gaps is by providing need-based financial aid to low-income students. In this paper, we examine the impact of eligibility for the Florida Student Access Grant (FSAG) on a range of college outcomes. Exploiting the cutoff in the index used to measure a family's ability to pay for college and determine grant eligibility, we utilize a regression-discontinuity (RD) strategy to estimate the causal effect of being eligible for the grant. We investigate whether being eligible for a need-based grant increases the probability that students enter college, remain continuously enrolled, accumulate more college credits, and ultimately earn a degree. Similar to other studies, we find that grant eligibility had a positive effect on attendance. Moreover, grant aid increased short-term persistence and the cumulative number of credits students earned over time. Most importantly, we find that FSAG increased the likelihood of bachelor's degree receipt within six years at a public college or university by 22 percent among students near the eligibility cut-off. The effects are largest for academically highachieving students.

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

“…programs targeted at students who meet certain academic requirements, 3 or at students who are already in college (Angrist et al, 2009;Goldrick-Rab et al, 2012), as well as state need-based grant programs which supplement federal aid (Castleman and Long, 2012). To overcome the identification issues that arise when estimating the impact of financial aid on student outcomes, the standard practice has been to use policy changes and eligibility rules as sources of exogenous variation to identify the parameters of interest.…”

“…5 Castleman and Long (2012) also use discontinuities to evaluate the impact of grants on degree completion rates, but they consider a program (the Florida Student Access Grant) which supplements Pell Grants. They estimate the e↵ects of this additional subsidy on student outcomes but not the impact of the initial Pell Grant (i.e., of some aid versus no aid).…”

Born Under a Lucky Star: Financial Aid, College Completion, Labor Supply, and Credit Constraints

“…The general finding is that a $1,000 reduction in the price of college increases enrollment by 2-4 percentage points. 6 Beyond enrollment, financial aid may affect persistence, graduation (Castleman and Long, 2016), and even later outcomes like earnings (Bettinger et al, 2016) and home ownership (Scott-Clayton and Zafar, 2016). Disentangling the effect of financial aid on enrollment from its effects on subsequent outcomes is difficult because financial aid changes the composition of who goes to college.…”

“…GoldrickRab et al (2016) use a randomized controlled trial to examine the effect of privately financed, need-based aid for freshman in Wisconsin and find that increased need-based fi-6 See Deming and Dynarski (2009) for a discussion of this literature. 7 For examples of papers that estimated the combined effect of financial aid on enrollment and subsequent outcomes see Angrist et al (2014); Bettinger et al (2016);Castleman and Long (2016); Cohodes and Goodman (2014); Dynarski (2008);Scott-Clayton (2011);Scott-Clayton and Zafar (2016);Sjoquist and Winters (2012). nancial aid increased persistence and graduation within four years.…”

Does Salient Financial Information Affect Academic Performance and Borrowing Behavior among College Students?

“…time and effort they devote to studying, and their decision to remain enrolled (Deming and Dynarski 2009;Angrist et al 2009;Castleman and Long 2013;Cohodes and Goodman 2014;DesJardins and McCall 2007).…”