Altering Expectations: How Changing a Merit Scholarship Program’s Payout Structure Affects Student Postsecondary Enrollment Choices
DOI:
https://doi.org/10.32674/hepe.v7i1.1729Keywords:
Keywords: financial aid, merit scholarships, college enrollment, post-secondary institutions, difference-in-differencesAbstract
While the popularity of state-financed merit-based scholarships has increased since the 1980s, policymakers struggle to maintain these programs because of growing costs. Some have tried to manage this tradeoff through eligibility changes or award amounts; however, little empirical research exists on the effectiveness of these changes. We add to the financial aid literature by determining if college enrollment responded to a 2013 restructuring of Arkansas’s Academic Challenge Scholarship from equal annual awards to a backloaded system with progressively higher payouts to students who persisted. We identify no statistically significant impacts associated with the 2013 change; however, point estimates are generally negative. We believe this is the first study to examine if moving to a backloaded payout structure affects college enrollment.
References
Refernces
Arkansas Division of Higher Education. (2018). “Academic Challenge Scholarship”. Retrieved from: https://scholarships.adhe.edu/scholarships/detail/academic-challenge-scholarships
Author (2015). Details omitted for double-blind reviewing.
Avery, C., & Kane, T. (2014). Student perceptions of college opportunities: The Boston COACH program. In C. Hoxby (Ed.) College Choices: The Economics of Where to Go, When to Go, and How to Pay for It. Chicago, IL: University of Chicago Press.
Barr, A. & Turner, S. (2017). A letter of encouragement: does information increase post-secondary enrollment of UI recipients? (NBER Working Paper No. 23374). Cambridge, MA: National Bureau of Economic Research.
Beherec, S. (2013, March 2). Beebe inks redo of lottery scholarships. Arkansas Democrat-Gazette. Retrieved from: http://www.arkansasonline.com/news/2013/mar/02/beebe-inks-redo-lottery-scholarships-20130302/
Bertrand, M. M., Duflo, E., & Mullainathan, S. (2003). How much should we trust differences-in-differences estimates? Quarterly Journal of Economics, 119.
Bettinger, E. (2004). How financial aid affects persistence. (NBER Working Paper No. 10242). Cambridge, MA: National Bureau of Economic Research.
Castleman, B., & Page, L. (2014). A trickle or a torrent? Understanding the extent of summer “melt” among college-intending high school graduates. Social Science Quarterly, 95(1), 202-220.
Cataldi, E., Bennett, C., Chen, X., & Simone, S. (2018). First-generation students: College access, persistence, and postbachelor’s outcomes. National Center for Education Statistics: U.S. Department of Education.
College Board. (2019). Financial aid can help you afford college. College Board: Pay for College, Financial Aid 101. Retrieved from: https://bigfuture.collegeboard.org/pay-for-college/financial-aid-101/financial-aid-can-help-you-afford-college
Copeland, K. D., & Mamiseishvili, K. (2017). The Arkansas Lottery Scholarship Act: An examination of the policy design process. Educational Policy. 31(1).
Cornwell, C., Lee, K., & Mustard, D. (2005). Student responses to merit scholarship retention rules. The Journal of Human Resources, 40(4), 895-917.
Cornwell, C., Mustard, D., & Sridhar, D. (2006). The enrollment effects of merit-based financial aid; evidence from Georgia’s HOPE Program. Journal of Labor Economics, 24(4), 761-786.
Crisp, E. (2018, Jan. 22). Gov. Edwards on doomsday budget that guts TOPS, health care funding: ‘This is what falling off the cliff looks like’. The Advocate. Retrieved from: https://www.theadvocate.com/baton_rouge/news/politics/article_cab67cf4-ffa1-11e7-9e24-d71b15eed25a.html
Dynarski, S, (2000). Hope for whom? Financial aid for the middle class and its impact on college attendance. National Tax Journal 53, 2, 629-662. Retrieved from: http://users.nber.org/~dynarski/2000%20Hope%20for%20Whom.pdf
Dynarski, S. (2003). Does aid matter? Measuring the effect of student aid on college attendance and completion. The American Economic Review, 93(1), 279-288.
Dynarski, S. (2008). Building the stock of college-educated labor. The Journal of Human Resources, 43(3), 576-610.
Dynarski, S., & Scott-Clayton, J. (2013). Financial aid and policy: lessons from research. (NBER Working Paper No. 19710). Cambridge, MA: National Bureau of Economic Research.
Gonzalez, G., Bozick, R., Tharp-Taylor, S., & Phillips, A. (2011). Fulfilling the Pittsburgh promise: Early progress of Pittsburgh’s postsecondary scholarship program. Santa Monica, CA: RAND Corporation. Retrieved from: https://www.rand.org/content/dam/rand/pubs/monographs/2011/RAND_MG1139.pdf
Henry, G., & Rubenstein, R., (2002). Paying for grades: impact of merit-based financial aid on educational quality. Journal of Policy Analysis and Management, 21(1), 93-109.
Hoxby, C. & Turner, S. (2013). Informing students about their college options: A proposal for broadening the expanding college opportunities project. The Hamilton Project, Brookings.
Hoxby, C., & Avery, C. (2013). The missing “ones-offs”: The hidden supply of high-achieving, low-income students. Brookings Papers on Economic Activity. Retrieved from: https://www.brookings.edu/wp-content/uploads/2016/07/2013a_hoxby.pdf
Kane, T. J. (2003). A quasi-experimental estimate of the impact of financial aid on college-going (NBER Working Paper No. 9703). Cambridge, MA: National Bureau of Economic Research.
Katsinas, S. G., Friedel, J. N., Davis, J. E., & Miller, M. T. (2013). The Impact of the New Pell Grant Restrictions on Community Colleges: A Three State Study. Retrieved from: http://uaedpolicy.weebly.com/uploads/6/1/7/1/6171842/3_state_pell_2013_study_embargoed.pdf
Kolodner, M. (2018, May 23). Eligible for financial aid, nearly a million students never get it. The Hechinger Report. Retrieved from: https://hechingerreport.org/eligible-for-financial-aid-almost-one-third-of-students-never-get-it/
Lawrence, E., M. (2017). Why do college graduates behave more healthfully than those who are less educated? Journal of Health and Social Behavior, 58(3), 291-306.
Legislative Fiscal Office. (2017). Comparison of state funded merit based aid and state funded student financial aid. Retrieved from: http://senate.la.gov/Tops/Presentations/LFO%20Presentation%20-Comparison%20of%20Merit%20Based%20State%20Aid_pdf.pdf
Mabel, Z. (2017). Aiding or dissuading? The effects of exhausting eligibility for need-based aid on bachelor's degree attainment and time to completion. The Effects of Exhausting Eligibility for Need-Based Aid on Bachelor's Degree Attainment and Time to Completion Retrieved from: https://scholar.harvard.edu/files/zmabel/files/aiding_or_dissuading_-_aug_2017_draft.pdf
Mahoney, E. (2019, May 3). Changes to Bright Futures test score requirements passed by Florida Legislature. Tampa Bay Times. Retrieved from: https://www.tampabay.com/florida-politics/buzz/2019/05/04/changes-to-bright-futures-test-score-requirements-passed-by-florida-legislature/
National Center for Education Statistics. (2018). Digest of Education Statistics (Table 326.10). , U.S. Department of Education. Washington D.C. Retrieved from: https://nces.ed.gov/programs/digest/d18/tables/dt18_326.10.asp?current=yes
National Center for Education Statistics. (2019a). Fast Facts: Financial Aid. Institute for Education Sciences, U.S. Department of Education. Washington D.C. Retrieved from: https://nces.ed.gov/fastfacts/display.asp?id=31
National Center for Education Statistics. (2019b). Fast Facts: Tuition costs of colleges and universities. Institute for Education Sciences, U.S. Department of Education. Washington D.C. Retrieved from: https://nces.ed.gov/fastfacts/display.asp?id=76
National Center for Education Statistics. (2019c). The condition of education. Fast Facts: Graduation Rates. Institute for Education Sciences, U.S. Department of Education. Washington, DC. Retrieved from: https://nces.ed.gov/fastfacts/display.asp?id=40
Oreopoulos, P. & Petronijevic, U. (2013). Making college worth it: a review of research on the returns to higher education. (NBER Working Paper No. 19053). Cambridge, Ma: National Bureau of Economic Research. Retrieved from: https://nces.ed.gov/programs/coe/indicator_cpb.asp
Page, L. & Gehlbach, H. (2017). How an artificially intelligent virtual assistant helps students navigate the road to college. AERA Open, 3(4), 1-12.
Page, L., & Scott-Clayton, J. (2016). Improving college access in the United States: Barriers and policy responses. Economics of Education Review, 51, 4-22.
Sanders, M. (2018). Role models, mentoring, and university applications: Evidence from a crossover randomised controlled trial in the United Kingdom. Widening Participation and Lifelong Learning, 20(4), 57-80.
Scott-Clayton, J., (2012). On money and motivation: a quasi-experimental analysis of financial incentives for college achievement. The Journal of Human Resources, 46(3), 614-646.
Wang, W. (2015). The link between a college education and a lasting marriage. Pew Research Center. Retrieved from: https://www.pewresearch.org/fact-tank/2015/12/04/education-and-marriage/
Zhang, L., Hu, S., & Sensing, V., (2013). The effect of Florida’s Bright Futures Program on college enrollment and degree production: an aggregated-level analysis. Research in Higher Education, 54(7), 746-764.
Zhang, L., Shouping, H., Sun, L., & Pu, S., (2016). The effect of Florida’s Bright Future’s program on college choice: a regression discontinuity approach. The Journal of Higher Education, 87(1), 115-147
Arkansas Division of Higher Education. (2018). “Academic Challenge Scholarship”. Retrieved from: https://scholarships.adhe.edu/scholarships/detail/academic-challenge-scholarships
Author (2015). Details omitted for double-blind reviewing.
Avery, C., & Kane, T. (2014). Student perceptions of college opportunities: The Boston COACH program. In C. Hoxby (Ed.) College Choices: The Economics of Where to Go, When to Go, and How to Pay for It. Chicago, IL: University of Chicago Press.
Barr, A. & Turner, S. (2017). A letter of encouragement: does information increase post-secondary enrollment of UI recipients? (NBER Working Paper No. 23374). Cambridge, MA: National Bureau of Economic Research.
Beherec, S. (2013, March 2). Beebe inks redo of lottery scholarships. Arkansas Democrat-Gazette. Retrieved from: http://www.arkansasonline.com/news/2013/mar/02/beebe-inks-redo-lottery-scholarships-20130302/
Bertrand, M. M., Duflo, E., & Mullainathan, S. (2003). How much should we trust differences-in-differences estimates? Quarterly Journal of Economics, 119.
Bettinger, E. (2004). How financial aid affects persistence. (NBER Working Paper No. 10242). Cambridge, MA: National Bureau of Economic Research.
Castleman, B., & Page, L. (2014). A trickle or a torrent? Understanding the extent of summer “melt” among college-intending high school graduates. Social Science Quarterly, 95(1), 202-220.
Cataldi, E., Bennett, C., Chen, X., & Simone, S. (2018). First-generation students: College access, persistence, and postbachelor’s outcomes. National Center for Education Statistics: U.S. Department of Education.
College Board. (2019). Financial aid can help you afford college. College Board: Pay for College, Financial Aid 101. Retrieved from: https://bigfuture.collegeboard.org/pay-for-college/financial-aid-101/financial-aid-can-help-you-afford-college
Copeland, K. D., & Mamiseishvili, K. (2017). The Arkansas Lottery Scholarship Act: An examination of the policy design process. Educational Policy. 31(1).
Cornwell, C., Lee, K., & Mustard, D. (2005). Student responses to merit scholarship retention rules. The Journal of Human Resources, 40(4), 895-917.
Cornwell, C., Mustard, D., & Sridhar, D. (2006). The enrollment effects of merit-based financial aid; evidence from Georgia’s HOPE Program. Journal of Labor Economics, 24(4), 761-786.
Crisp, E. (2018, Jan. 22). Gov. Edwards on doomsday budget that guts TOPS, health care funding: ‘This is what falling off the cliff looks like’. The Advocate. Retrieved from: https://www.theadvocate.com/baton_rouge/news/politics/article_cab67cf4-ffa1-11e7-9e24-d71b15eed25a.html
Dynarski, S, (2000). Hope for whom? Financial aid for the middle class and its impact on college attendance. National Tax Journal 53, 2, 629-662. Retrieved from: http://users.nber.org/~dynarski/2000%20Hope%20for%20Whom.pdf
Dynarski, S. (2003). Does aid matter? Measuring the effect of student aid on college attendance and completion. The American Economic Review, 93(1), 279-288.
Dynarski, S. (2008). Building the stock of college-educated labor. The Journal of Human Resources, 43(3), 576-610.
Dynarski, S., & Scott-Clayton, J. (2013). Financial aid and policy: lessons from research. (NBER Working Paper No. 19710). Cambridge, MA: National Bureau of Economic Research.
Gonzalez, G., Bozick, R., Tharp-Taylor, S., & Phillips, A. (2011). Fulfilling the Pittsburgh promise: Early progress of Pittsburgh’s postsecondary scholarship program. Santa Monica, CA: RAND Corporation. Retrieved from: https://www.rand.org/content/dam/rand/pubs/monographs/2011/RAND_MG1139.pdf
Henry, G., & Rubenstein, R., (2002). Paying for grades: impact of merit-based financial aid on educational quality. Journal of Policy Analysis and Management, 21(1), 93-109.
Hoxby, C. & Turner, S. (2013). Informing students about their college options: A proposal for broadening the expanding college opportunities project. The Hamilton Project, Brookings.
Hoxby, C., & Avery, C. (2013). The missing “ones-offs”: The hidden supply of high-achieving, low-income students. Brookings Papers on Economic Activity. Retrieved from: https://www.brookings.edu/wp-content/uploads/2016/07/2013a_hoxby.pdf
Kane, T. J. (2003). A quasi-experimental estimate of the impact of financial aid on college-going (NBER Working Paper No. 9703). Cambridge, MA: National Bureau of Economic Research.
Katsinas, S. G., Friedel, J. N., Davis, J. E., & Miller, M. T. (2013). The Impact of the New Pell Grant Restrictions on Community Colleges: A Three State Study. Retrieved from: http://uaedpolicy.weebly.com/uploads/6/1/7/1/6171842/3_state_pell_2013_study_embargoed.pdf
Kolodner, M. (2018, May 23). Eligible for financial aid, nearly a million students never get it. The Hechinger Report. Retrieved from: https://hechingerreport.org/eligible-for-financial-aid-almost-one-third-of-students-never-get-it/
Lawrence, E., M. (2017). Why do college graduates behave more healthfully than those who are less educated? Journal of Health and Social Behavior, 58(3), 291-306.
Legislative Fiscal Office. (2017). Comparison of state funded merit based aid and state funded student financial aid. Retrieved from: http://senate.la.gov/Tops/Presentations/LFO%20Presentation%20-Comparison%20of%20Merit%20Based%20State%20Aid_pdf.pdf
Mabel, Z. (2017). Aiding or dissuading? The effects of exhausting eligibility for need-based aid on bachelor's degree attainment and time to completion. The Effects of Exhausting Eligibility for Need-Based Aid on Bachelor's Degree Attainment and Time to Completion Retrieved from: https://scholar.harvard.edu/files/zmabel/files/aiding_or_dissuading_-_aug_2017_draft.pdf
Mahoney, E. (2019, May 3). Changes to Bright Futures test score requirements passed by Florida Legislature. Tampa Bay Times. Retrieved from: https://www.tampabay.com/florida-politics/buzz/2019/05/04/changes-to-bright-futures-test-score-requirements-passed-by-florida-legislature/
National Center for Education Statistics. (2018). Digest of Education Statistics (Table 326.10). , U.S. Department of Education. Washington D.C. Retrieved from: https://nces.ed.gov/programs/digest/d18/tables/dt18_326.10.asp?current=yes
National Center for Education Statistics. (2019a). Fast Facts: Financial Aid. Institute for Education Sciences, U.S. Department of Education. Washington D.C. Retrieved from: https://nces.ed.gov/fastfacts/display.asp?id=31
National Center for Education Statistics. (2019b). Fast Facts: Tuition costs of colleges and universities. Institute for Education Sciences, U.S. Department of Education. Washington D.C. Retrieved from: https://nces.ed.gov/fastfacts/display.asp?id=76
National Center for Education Statistics. (2019c). The condition of education. Fast Facts: Graduation Rates. Institute for Education Sciences, U.S. Department of Education. Washington, DC. Retrieved from: https://nces.ed.gov/fastfacts/display.asp?id=40
Oreopoulos, P. & Petronijevic, U. (2013). Making college worth it: a review of research on the returns to higher education. (NBER Working Paper No. 19053). Cambridge, Ma: National Bureau of Economic Research. Retrieved from: https://nces.ed.gov/programs/coe/indicator_cpb.asp
Page, L. & Gehlbach, H. (2017). How an artificially intelligent virtual assistant helps students navigate the road to college. AERA Open, 3(4), 1-12.
Page, L., & Scott-Clayton, J. (2016). Improving college access in the United States: Barriers and policy responses. Economics of Education Review, 51, 4-22.
Sanders, M. (2018). Role models, mentoring, and university applications: Evidence from a crossover randomised controlled trial in the United Kingdom. Widening Participation and Lifelong Learning, 20(4), 57-80.
Scott-Clayton, J., (2012). On money and motivation: a quasi-experimental analysis of financial incentives for college achievement. The Journal of Human Resources, 46(3), 614-646.
Wang, W. (2015). The link between a college education and a lasting marriage. Pew Research Center. Retrieved from: https://www.pewresearch.org/fact-tank/2015/12/04/education-and-marriage/
Zhang, L., Hu, S., & Sensing, V., (2013). The effect of Florida’s Bright Futures Program on college enrollment and degree production: an aggregated-level analysis. Research in Higher Education, 54(7), 746-764.
Zhang, L., Shouping, H., Sun, L., & Pu, S., (2016). The effect of Florida’s Bright Future’s program on college choice: a regression discontinuity approach. The Journal of Higher Education, 87(1), 115-147
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How to Cite
Altering Expectations: How Changing a Merit Scholarship Program’s Payout Structure Affects Student Postsecondary Enrollment Choices. (2021). Higher Education Politics and Economics, 7(1), 72-98. https://doi.org/10.32674/hepe.v7i1.1729
