Come and Stay a While: Does Financial Aid Effect Enrollment and Retention at a Large Public University?

[Excerpt] Few studies have examined whether financial aid affects college retention. This paper models the decision to enroll and re-enroll in college, which yields a bivariate probit model that is estimated using detailed individual data from a large public university. The analysis uses the unique detail of institution-specific data to examine the effect of financial aid on the re-enrollment decision, and exploits the sequential college completion process to condition the re-enrollment probabilities for college selection such that the implications are broader than is typical of a single-institution study. Overall, the results indicate that some types of need-based aid improve retention, but that merit-based aid has the largest retention effects and particularly for well-to-do enrollees

Do No-Loan Policies Change the Matriculation Patterns of Low-Income Students?

We empirically examine whether there is discernable variation in the matriculation patterns of low-income students at public flagship institutions in the United States around changes in institutional financial-aid policies that target resident, low-income students with need-based aid. While enrollment responses cannot be attributed to these programs, we do find that institutions that introduce income-targeted aid subsequently enroll financially needier and geographically more-distant students. These findings imply that "improved" access may actually displace some needy students in favor of others.low income, financial aid, no loan, Pell

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

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