The Effects of Institutional Merit-Based Aid On the Enrollment Decisions of Needy Students

Recently, both states and institutions have implemented merit-based financial aid packages to compete for the best students. This analysis explores the adoption of a merit-based aid program at the University of Oregon to assess the impact of merit-based aid in needy-student financial aid packages. Using a unique empirical approach in which the decisions of University of Oregon applicants to apply for federal financial aid and/or enroll at the University of Oregon are modeled jointly, results indicate that $1000 in merit-based aid increases the probability of enrollment by 6.8%. However, while the effect of merit-based aid is found to be positive, the results suggest that the effect may be overstated without controlling for the potential correlation of merit-based aid with the error term

Differential effects of the components of higher education expenditure on U.S. state economic growth [abstract]

Abstract only availableOver the past thirty years, the importance of human capital investment in the United States has significantly increased leading to a dramatic upward pressure on tuition prices. This dramatic increase in tuition levels has raised a debate as to what should be the proper amount of the investment in human capital and what are the true effects on economic growth. Specifically, this debate is centered on whether an investment in human capital through higher education leads to the substantial positive externalities as was previously expected. On one hand, some scholars argue that greater public funding on education is needed to increase labor force productivity. On the other hand, research indicates that the cost of human capital investment has increased such that the returns no longer outweigh the costs. This paper expands upon previous research by breaking down higher education spending into specific expenditure components, such as research and instruction as well as appropriations and grant-aid, as opposed to solely analyzing the total amount of funds spent by states on higher education. A distinctive result emerges indicating that research spending is both positively and significantly related to state economic growth, while the effects of both instructional and other spending remain insignificantly different from zero. Different levels of impact are also obtained through our second allocation analysis, where results indicate both a positive and significant correlation between appropriations and growth, while grant-aid expenditure effects remain to be insignificant. In general, the evidence suggests that states with a large university research presence could benefit through increased economic growth. However, growth maximizing models may vary based upon the differing factors across states. Hence, this research finds that what may be important is not the amount spent by states on higher education, but rather, how is it spent.McNair Scholars Progra

Aim High or Go Low? Pricing Strategies and Enrollment Effects when the Net Price Elasticity Varies with Need and Ability

Detailed data on individual applicants to a large public university are used to demonstrate that net price responsiveness decreases with need and ability. Enrollment effects are simulated and show a movement towards a high tuition/high aid (low tuition/low aid) policy significantly lowers (raises) tuition revenue with a modest increase (decrease) in the number of aid-eligible students

Deriving Enrollment Management Scores from ACT Data

This study is an investigation of the derivation of scores that predict whether or not prospective first-time freshmen will apply or will enroll and whether or not firsttime freshman enrollees will graduate using data from the ACT (American College Testing) assessment. Using a regression methodology, four basic scores are derived to be independent of academic ability, which is indicated by a fifth score. Using cross-validation populations, each of the scores is shown to predict the desired behavioral criterion quite well, and each should serve its intended purpose. The paper discusses potential uses of the scores and examines the inclusion or exclusion of no-response items (where the individual did not give a response), the optimal number of data items to include in an enrollment management score, and other characteristics of the scores

Beyond Money: Relating Local School Taxation to Family and Community Risk

State school finance formulas moved from tax-driven to student needs, while local community taxation requirements remain. However, no study has examined links between student needs risk factors affecting educational opportunity and local taxation choices. Using regression analyses, this study asked: Are local school district taxation levies related to community, family and economic factors? Using eleven years of financial data to examine Missouri's 1993 tax-rate driven formula this study shows community and family risk factors are related to taxation. Some groups that had prior effects on taxation lost this ability under a tax-rate driven formula. As a result, a state's fixed taxation requirement without regard for local risk can potentially harm constitutionally protected educational opportunity, particularly in new student needs formulas that move away from equalizing local taxation and wealth

Money for Nothing? The Impact of Changes in the Pell Grant Program on Institutional Revenues and the Placement of Needy Students

Using new institutional-level data, we assess the impact of changing federal aid levels on institutional-level Pell revenues. Using various policy instruments associated with Pell generosity, we quantify the sensitivity of institutional Pell revenues to the generosity of the Pell Grant program. In general, we find an elastic response of institutional Pell revenues with respect to the maximum Pell award, where other policy instruments associated with Pell generosity are found to have an inelastic or zero impact. We also document significant asymmetries across institutional selectivity, both in magnitude and in terms of which channel accounts for the measured sensitivity—award values directly or institutional enrollment. In the end, exogenous changes in the federal Pell Grant program are found to correlate strongly with changes in the distribution of needy students and revenues across institutional quality

HOPE for the Pell? Institutional Effects in the Intersection of Merit-Based and Need-Based Aid

Prior empirical evidence finds that general enrollment effects of merit-aid programs such as the Georgia Helping Outstanding Pupils Educationally (HOPE) scholarship are large and significant, while the effects of need-based aid programs such as the Pell grant are modest and often insignificant. This paper uses new panel data on Pell awards to examine the influence of the Georgia HOPE scholarship on needy-student enrollments. We demonstrate that the introduction of merit aid in Georgia generally improves the college access of needy students and has been leveraged into greater federal Pell assistance. While institution-specific increases in both Pell enrollment and funding are largest at two-year and less selective four-year institutions, the results suggest that Pell students are not crowded out of more selective schools by HOPE's intent to retain the best Georgia high school students, as might have been anticipated

Hope for the Pell? The Impact of Merit-Aid on Needy Students

38 p.Prior empirical evidence finds that merit-aid programs such as the Georgia Hope Scholarship yield large and significant enrollment effects, whereas need-based aid programs such as the Pell Grant yield modest and often insignificant enrollment effects. This paper uses unpublished panel data on the number and level of Pell awards at Southern universities along with detailed institutional data from the National Center of Educational Statistics to examine whether the Georgia Hope Scholarship improved the college access of needy students relative to other Southern states. Fixed-effect analyses show that large increases in merit aid improve college access of needy students and leverage Hope Scholarship funds with greater federal Pell assistance. Whereas most institution-specific increases in both Pell enrollment and funding are found for two-year and less selective, four-year institutions, the results also suggest that Pell students are not crowded out of more selective schools by Hope’s intent to retain the best Georgia high-school students