Topic: Effectiveness of Financial Aid Citation
Study Design
Long, B. T. (2004b). The impact of federal tax credits for higher education expenses. In C. Hoxby (Ed.), College choices: The economics of which college, when college, and how to pay for it (pp. 101‐168). Chicago, IL: University of Chicago Press and the National Bureau of Economic Research.
Quasi‐ experimental (difference‐in‐ difference between eligible and ineligible individuals before and after the introduction of the credits)
Sample size, Characteristics, and Power College‐going individuals in IPEDS (1993‐1994 to 1990‐ 2000) and October CPS data (1990‐2000)
External Validity Strong
Summary of Findings Tax credits did not increase postsecondary enrollment among credit‐eligible students, nor were students more likely to invest in a 4‐ year (vs. 2‐year) program. The low take‐up rate suggests that not enough families know about the benefit for it to have a discernible impact. Disconnect between the timing of the benefit and college enrollment may limit the effects.
Assessment of Evidence Suggestive
Notes/Caveats The data are somewhat limited for the analysis (e.g. income data is recorded only in brackets, not exact amounts). Measurement error may attenuate results. Not clear that trends for eligible and ineligible students are comparable.
Subtopic: Tuition reductions and other non‐merit based aid Avery, C., Hoxby, C., Jackson, C., Burek, K., Poppe, G., & Raman, M. (2006). Cost should be no barrier: An evaluation of the first year of Harvard’s Financial Aid Initiative (NBER Working Paper No. 12029). Cambridge, MA: National Bureau of Economic Research. Dynarski, S. (2003). Does aid matter? Measuring the effect of student aid on college attendance and completion. American Economic Review, 93(1), 279‐288.
Quasi‐ experimental (before‐after comparison)
Data from 16,821 Harvard applications in 2008 and from 19,321 applications in 2009
Somewhat limited (see sample description)
The percentage of applicants from families with incomes of $40,000 or below jumped by more than 20%. Enrollment of students qualifying for the Initiative increased by 11% in one year; while enrollment of students with family incomes below $40,000 increased by nearly 20%.
Suggestive
Quasi‐ experimental (difference‐in‐ difference between children with/without deceased father, before/after the program's elimination in 1982)
12,686 youth from the NLSY 1979; "treated" group include only those whose father was deceased at time of college decision
Somewhat limited (see sample description; data may be becoming outdated)
Dynarski finds that “the elimination of the Social Security student benefit program reduced college attendance probabilities by more than a third. These estimates suggest that an offer of $1,000 in grant aid increases the probability of attending college by about 3.6 percentage points. Aid eligibility also appears to increase completed schooling.”
Strong
33
The before‐after comparison is somewhat limited in that it relies on only two years of data, and some data are not available for all applicants (e.g., complete financial data is only available for students who enrolled). A seminal study documenting the effect of student assistance on college enrollments.