Can Need-Based Financial Aid Increase College Attainment Among by hcj


									Wisconsin Scholars Longitudinal Study:
An Introduction

University of Wisconsin-Madison

Thanks for the Extensive Support!

• Funders: Bill and Melinda Gates Foundation, William T.
  Grant Foundation, Spencer Foundation
• Partners: University of Wisconsin System, Wisconsin
  Technical College System
• Board of directors of the Fund for Wisconsin Scholars
• Our staff, past, present, and future
• And especially our project manager, Alison Bowman
Policy Context

• The nation faces a college completion problem
• Completion rates are especially poor among
  students from low-income families
• Governments spend $155B+ on need-based
  financial aid each year (inc. grants & loans)
  • To what degree is aid exerting an independent
    contribution to degree completion rates?
  • Is it a cost-effective contribution?
  • Through what mechanisms do effects arise?
  • For which students is aid most effective?
How Financial Aid Could Help Students
• The conditions required to get the aid could provide
  • “I will continue to enroll in college in order to get this
  • “I will attend full-time rather than part-time in order to get
    this money.”
• The income could be used in positive or negative
  • “This money helps me work a little less and study a little
  • “This money makes me less worried that I can get through
  • “With this money, I’ll stay in a dorm where I can hang out
    with my friends.”
Prior Research

• Studies suggest modest positive impacts of
  financial aid on college attendance and
  persistence for the average student
  • The effects seem to vary depending on the conditions
    associated with the program
  • They also depend on who the program is serving
  • Isolating a causal effect of financial aid is particularly
Ways to Evaluate the Effects of a Grant Program

     ddf                     100 students sign up
                             to receive a grant

      Grant vs. No Grant Comparison
Grant vs. No Grant
Grant                100 students
                     sign up

No Grant             1000s of
                     students don’t
                     sign up
Grant vs. No Grant
Grant                College
                     Rate= 70%

No Grant             College
                     Rate= 60%
Grant vs. No Grant
Grant                                 College
                                      Rate= 70%

No Grant                              College
                                      Rate= 60%
 Students receiving the grants have
  higher college completion rates…
  Can we attribute that difference
            to the grants?
Scholarship vs. No Scholarship
Scholarship                          College
                                     Rate= 70%

No Scholarship                       College
                                     Rate= 60%
    The observed differences in
  completion rates could be due to
   unobserved differences among
students—which led them to get the
Grant vs. No Grant
• This method compares apples to oranges
• The reason for not getting the grant could be
  associated with the reason for not finishing
  college (“selection bias”)
   • If we know what the reason is, we can
     “control” for it
   • If we don’t know what it is, or can’t observe
     it in the data we have, we can’t control for
• The estimated impact of the grant mixes up
  these factors
Fund for Wisconsin Scholars
• A new, generous grant program
• Allocates grants with a method that facilitates
  rigorous estimation of impacts
• Willing to participate in an evaluation

• An uncommon opportunity to help large
  numbers of Wisconsin college students—while
  generating research knowledge needed to help
  students nationwide
Fund for Wisconsin Scholars
• Grants to students enrolled in UW System & the
  Wisconsin Technical College System
• Began making awards in fall 2008
• Eligible students graduated from Wisconsin
  public high schools, enrolled in college within 3
  years of graduation, for the first-time, and
  received a Pell Grant
  • Had to have at least $1 of unmet need after all non-
    repayable sources of aid were accounted for
  • Had to enroll full-time (12 credits) by the date of
Fund for Wisconsin Scholars
• Grant amounts:
  • $1,800 per year for students at 2-year colleges
  • $3,500 per year for students at universities
• Terms of renewal:
  • Continued receipt for up to 5 years
  • Transferrable among publics
  • Must register for 12 credits by the start of each
    new term
  • Maintain ‘satisfactory academic progress’ (~C
  • Terms are very comparable to the federal Pell
Fund for Wisconsin Scholars
• Identification of eligible students:
   • Fall of first year of college (after enrollment)
   • FFWS works with Wisconsin’s financial aid officers
   • Students don’t have to sign up for a “chance” to get the
     grants; they have already done the hard work of
     completing the FAFSA
• Selection process:
   • Students are chosen (2-year and 4-year separately)
   • Potential recipients are notified
   • Students respond and verify their eligibility
• Award process:
   • After verification, payments are disbursed via financial aid
     offices each term
   • First payment arrives by 2nd semester, year 1
 Random Assignment of FFWS Grants
                                     All eligible
                                     students have
                                     an equal
                                     chance of
                                     receiving a
                 ￿ ￿

A coin toss helps ensure recipients and non-
recipients are equivalent groups
FFWS Grant vs. No FFWS Grant
• This method compares apples to apples
• The reason for not getting the grant could NOT be associated
  with the reason for not finishing college
• The estimated impact of the FFWS grant is clean– if we
  observe differences in students’ outcomes they are due to the
How Students Get the FFWS Grant
• They are enrolled and already have financial aid
• The FFWS grant must go to the financial aid
  office & by law the student’s package must be
  adjusted if receiving the grant means their
  financial aid exceeds the institution’s cost of
  • Usually this means reducing loans and/work-study
    money; schools agreed not to reduce institutional
• So they get the grant as loan reduction, cash
  refund, or a combination, depending on the size
  and composition of their initial aid package
Wisconsin Scholars Longitudinal Study

• What are the average effects of the FFWS grant on
  college attainment?
• For which students is the grant most effective?
• Under what conditions is the grant most effective?
  (e.g. loan vs. cash, type of college)
• How does the FFWS grant affect students?
   • How does it change how they spend their time?
   • In what ways does it alter their relationships with
     other people?
   • How does it affect how they think and feel?
Wisconsin Scholars Longitudinal Study

• Includes 3,000 students who were eligible for
  the FFWS grant in Fall 2008
   • 1,200 students randomly chosen to receive the
   • 1,800 students not chosen (at random) to
     receive the grant
   • The sample is split between universities and 2-
     year colleges
• We also plan to include students who will be
  eligible for the FFWS grant in Fall 2012
Wisconsin Scholars Longitudinal Study

• We observe students’ outcomes with the
  following kinds of data:
   • National Student Clearinghouse (enrollment
   • College transcripts
   • Surveys (administered yearly, by mail)
   • Interviews (conducted in-person, every
     semester, with a stratified sample of 36
     students at 4 universities)
• We also plan to consider employment and
  earnings outcomes

• About the study’s research questions?
• Design?
• Data?
Education Impacts of the Wisconsin
Scholars Grant on University Students:

University of Wisconsin-Madison


• 1,500 students who enrolled at one of
  Wisconsin’s 13 public universities in Fall 2008
• All students in this analysis received a Pell Grant
  in that term
• We compare the outcomes of 600 students
  randomly selected to be offered the FFWS grant
  and 900 eligible students who were not chosen

• Enrollment: National Student Clearinghouse (2008-2011)
  • Obtained for all students
  • Captures enrollment anywhere in the U.S., if NSC can
    find a “match.” Our “match” rate ~98%.

•   Credits & GPA (2008-2010)
•   Financial aid packages (2008-2010)
•   Student surveys (2008, 2009)
•   In-depth interviews (50 students, every 6 months, 2008-
    Were Students Offered and Not Offered the Grant
    Similar Before the Grant Was Awarded?
                        Full Sample       Non-    Treatment    P-Value
                                      Recipient   Difference
% Female                      57.3        56.7           1.0      .711
% Minority                    24.6        24.0           1.1      .681
Average Age                   18.2        18.2           0.0      .942
% First Gen                   53.4        53.5          -0.2      .958
% Dependent                   97.3        97.0           0.5      .572
EFC ($)                      1,633       1,603           53       .669
% $0 EFC                      30.6        31.9          -2.3      .362
Parent AGI ($)              29,963      29,403        1,014       .314
% 1st time in college         95.9        95.7           0.5      .681
Terms prior enroll              1.8         1.8         -0.1      .856
N                             1500         900          600
Question 1:
How did the FFWS grant affect students’
financial resources?
  Impact on Aid Package: Year 1 (2008-
                                   CONTROL TREATMENT IMPACT ($3,500)
Total Aid                            $11,426                       $1,665***
Pell (%)                                99.8                         - 0.1
State Grant (%)                         99.0                        - 3.7 ***
SEOG (%)                                63.6                         -9.8***
ACG (%)                                 80.4                          0.3
Institutional Aid (%)                   54.7                          1.6
Work Study (%)                          18.3                         - 5.0 *
Sub. Staff (%)                          77.9                        - 11.1***
Unsub Staff (%)                         38.9                         - 3.8
Total loans ($)                       3428.3                        -909.5
93% of treatment group received FFWS this year.
Aid amounts are unconditional on receipt—impacts reflect supplanting + student
  Impact on Aid Package: Year 2 (2009-
                                  CONTROL TREATMENT IMPACT ($3,500)
Total Aid                           $10,082                $814.3 **
Pell (%)                                74.3                 - 0.6
State Grant (%)                         67.2                  0.5
SEOG (%)                                39.2                  1.2
ACG (%)                                 24.1                  1.5
Institutional Aid (%)                   48.1                 -5.4
Work Study (%)                          16.3                 -3.6
Sub. Staff (%)                          66.7                 -7.2*
Unsub Staff (%)                         45.6                 -9.8**
Total loans ($)                      3581.2                 -830.9

67% of treatment group received FFWS this year.
Aid amounts are unconditional on receipt.

• About 1/3 of the amount of the FFWS grant was used to
  reduce students’ loans and work-study (as well as
  replace some state grant aid)
• After two years, students offered the FFWS grant had
  about $1,800 less debt than students not offered the
Question 2:
How did the FFWS grant affect academic
Average Impacts of the Grant on Enrollment:
                                     Control Mean          Treatment Effect

Total # terms enrolled (f/s, %)                   5.192           0.05 (.09)

Ever enrolled summer (%)                            21.4          0.8 (2.6)

Ever enrolled winter (%)                             5.8          3.9 (1.7) **

Ever transferred (%)                                23.7         -0.4 (2.7)

Ever attended 2-year college                        14.4         -0.4 (2.2)
Completed associate’s degree                         3.1          0.4 (1.1)
Notes: *** p<.01, **p<.05, * p<.10
These are average effects, comparing FFWS recipients vs. control group
 Average Impacts of the Grant on Credits:
                                      Control Mean   Treatment Effect
Credit Accumulation
 Average credits completed            46.9            0.9 (1.0)
 Earned 1-29 credits (%)              18.2            0.4 (2.4)
 Earned 30-47 credits (%)             16.0            2.6 (2.4)
 Earned 48-59 credits (%)             42.3           - 8.2 (3.1) ***
 Earned 60+ credits (%)               22.2            6.3 (2.8) **
Progress toward 4-year Degree
  60+ credits, 2-2.5 GPA              2.2             0.0 (0.9)
  60+ credits, 2.5-3.0 GPA            6.8            -0.5 (1.6)
  60+ credits, 3.0-3.5 GPA            8.5            4.7 (2.0) **
  60+ credits, 3.5+ GPA               4.3            2.4 (1.4) *

 Notes: *** p<.01, **p<.05, * p<.10
Effects of the Grant Varied

• We compared the effects based on a student’s
  propensity to persist, using pre-FFWS factors:
  • Age, parental education, race/ethnicity, gender, number of
  •   Family income, assets, expected family contribution
  •   Years of high school math and science, GPA, ACT score,
      hours worked in high school, receipt of the Academic
      Competitive Grant
  •   Help from parents completing FAFSA
  •   # credits registered for 2nd week of freshman year
  •   Receipt of the Supplemental Educational Opportunity Grant
  •   College attended
Propensity to Persist

• Overlapping disadvantages means that no single factor
  describes the category but parental education and ACT
  scores are some of the defining characteristics
• High (94%): Parents typically have at least a bachelor’s
  degree, students have higher than average test scores
• Middle (82%): Parents typically have a high school
  education, students have moderate test scores
• Bottom (55%): Parents typically have attended some
  college but not necessarily a university, students have
  lower test scores
Impact of the Grant on Enrollment by
Propensity to Persist
               2008-2009   2009-2010   2010-2011

Top: Control   99          94          94
Top: FFWS      94          83          79

Middle:        96          85          82
Control                                      -1
Middle:        93          84          81
Bottom:        94          62          55
Control                                      + 17
Bottom:        97          83          72
Impact of Grant on Total Number of Enrolled
Terms: 2008-2011



2                                                          p-=.001


    Bottom tercile          Middle tercile   Top tercile
                     Propensity to Persist
Impact of Grant on Number of Attempted
Credits: 2009-2010


20                                                               Treatment


10                                                            p-=.034

                                                         Note: No
                                                         Impacts on Attempts
 0                                                       In ‘08-09
     Bottom tercile       Middle tercile   Top tercile
                  Propensity to Persist
Impact of Grant on Number of Completed
Credits: 2008-2010




     Bottom tercile       Middle tercile   Top tercile
                  Propensity to Persist
Impact of Grant on Percent Completing 1-29
Credits: 2008-2010
 70                                                          Treatment
 40                                                        p-=.025
      Bottom tercile        Middle tercile   Top tercile
                  Propensity to Persist
Impact of Grant on Percent Completing 60+
Credits: 2008-2010
 70                                                         Treatment
 60                                                         Control
 40                                                       p-=.424
      Bottom tercile       Middle tercile   Top tercile
                  Propensity to Persist

• On average, the grant appeared to accelerate
  time-to-degree for some students. This is
  promising since less than 30% of Pell recipients
  in Wisconsin complete bachelor’s degrees in 4

• The grant appeared most effective for the
  students who were the least likely to persist in
Are FFWS Requirements Driving the
• We think this is unlikely

• The requirements are not unusual
  • Students think of the FFWS grant as simply as part of
    their aid package – it requires exactly what Pell does
    (12 credits, satisfactory academic progress)
  • Many think the FFWS grant requires a B average– but
    they think the Wisconsin Higher Education Grant does

• Awareness of the grant and its requirements is limited:
  • In Fall 2008 survey just 37% of those awarded the
    grant reported getting it– a year later, just 49% of
    those awarded it seemed to know they had it
Decisions About Full-Time Enrollment
• Interviews do not indicate that students took specific
  grants into account when making decisions about the
  number of credits to take
• But they did consider overall financial constraints and
  the needs of their family members
• More important for determining the # credits was their
  perception of how well they were doing in school

• There was an overall lack of awareness of how number
  of credits relates to time-to-degree
• Lots of shifting from “4-year track” (15+ credits) to “5-
  year track” (12-14) credits, and sometimes to <12 too
Are FFWS Resources Driving the
 • Resources could have many different types of effects

 • For example, increased resources could allow students to
   substitute study time for work time

 • The increased resources could also help students meet
   their other obligations, for example to family members,
   helping them stay enrolled

 • The resources could prove necessary for continued
   enrollment, but insufficient to help them manage a higher
   credit load
Who Helped Students Make Decisions?

 • Students who were unlikely to persist in college were
   first-generation students with close family ties:
   • Their families may have worked extra hard to help them
     succeed in college, and they may have made decisions
     about college (including how to spend $) with their
     parents (Minikel-Lacocque & Goldrick-Rab, 2011)
 • Students who were very likely to persist in college
   came from families where attending college was more
   normative, these were “emerging adults”:
   • Students may have been afforded more
     independence about how to use the grant
Policy Implications

• Targeting of social programs can maximize their cost-
• The challenge lies in identifying the best ways to target
• It can be difficult to find politically feasible approaches
Policy Implications
• Costs of the Pell Grant are substantial and growing (~$20-40B)
• The Obama administration wants to keep the grant maximum
  high while finding other places to cut
• One proposal is to require students to take 15 credits per term
  (instead of 12) to get the maximum Pell ($5,500)
  • Only 31% of Pell recipients today take 15+ credits per term—
    most are juniors or seniors.
  • This change means the Pell would be cut by $1000 or more for
    the 41% of Pell recipients currently taking 12-14 credits per
  • Assuming some of these succeeded in registering for 15+ credits,
    savings would be approximately $1-2 billion per year– more, if
    those at 12-14 credits drop down—or dropout
  • Cost-effectiveness of the approach is unclear
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