Leveling Up: Early Results from a Randomized Evaluation of Post-Secondary Aid

Higher Education, March 2017

Does finan­cial aid increase col­lege atten­dance and com­ple­tion? Selection bias and the high implic­it tax rates imposed by over­lap­ping aid pro­grams make this ques­tion dif­fi­cult to answer. This paper reports ini­tial find­ings from a ran­dom­ized eval­u­a­tion of a large pri­vate­ly-fund­ed schol­ar­ship pro­gram for appli­cants to Nebraska’s pub­lic col­leges and uni­ver­si­ties. Our research design answers the chal­lenges of aid eval­u­a­tion with ran­dom assign­ment of aid offers and a strong first stage for aid received: ran­dom­ly assigned aid offers increased aid received marked­ly. This in turn appears to have boost­ed enroll­ment and per­sis­tence, while also shift­ing many appli­cants from two- to four-year schools. Awards offered to non­white appli­cants, to those with rel­a­tive­ly low aca­d­e­m­ic achieve­ment, and to appli­cants who tar­get­ed less-selec­tive four-year pro­grams (as mea­sured by admis­sions rates) gen­er­at­ed the largest gains in enroll­ment and per­sis­tence, while effects were much small­er for appli­cants pre­dict­ed to have stronger post-sec­ondary out­comes in the absence of treat­ment. Thus, awards enabled groups with his­tor­i­cal­ly-low col­lege atten­dance to lev­el up, large­ly equal­iz­ing enroll­ment and per­sis­tence rates with tra­di­tion­al­ly col­lege-bound peers, par­tic­u­lar­ly at four-year pro­grams. Awards offered to prospec­tive com­mu­ni­ty col­lege stu­dents had lit­tle effect on col­lege enroll­ment or the type of col­lege attend­ed.