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

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									Wisconsin Scholars Longitudinal Study:
An Introduction



SARA GOLDRICK-RAB & DOUGLAS N. HARRIS
Co-Directors
University of Wisconsin-Madison

WWW.FINAIDSTUDY.ORG
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
  motivation
  • “I will continue to enroll in college in order to get this
    money.”
  • “I will attend full-time rather than part-time in order to get
    this money.”
• The income could be used in positive or negative
  ways
  • “This money helps me work a little less and study a little
    more.”
  • “This money makes me less worried that I can get through
    college.”
  • “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
    difficult
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
                     Completion
                     Rate= 70%



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



No Grant                              College
                                      Completion
                                      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
                                     Completion
                                     Rate= 70%



No Scholarship                       College
                                     Completion
                                     Rate= 60%
    The observed differences in
  completion rates could be due to
   unobserved differences among
students—which led them to get the
              grants.
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
     it
• 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
    record
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
    average)
  • Terms are very comparable to the federal Pell
    Grant
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
                                     grant
                 ￿ ￿


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
  grant
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
  attendance
  • Usually this means reducing loans and/work-study
    money; schools agreed not to reduce institutional
    aid
• 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
     grant
   • 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
     anywhere)
   • 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
Questions?

• About the study’s research questions?
• Design?
• Data?
Education Impacts of the Wisconsin
Scholars Grant on University Students:
2008-2011



SARA GOLDRICK-RAB, DOUGLAS N. HARRIS,
JAMES BENSON, & ROBERT KELCHEN
University of Wisconsin-Madison

WWW.FINAIDSTUDY.ORG
Sample

• 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
Data

• 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-
    11)
    Were Students Offered and Not Offered the Grant
    Similar Before the Grant Was Awarded?
                        Full Sample       Non-    Treatment    P-Value
                                      Recipient   Difference
                                         Mean
% 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-
  2009)
                                   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
decisions
  Impact on Aid Package: Year 2 (2009-
  2010)
                                  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.
Summary

• 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
  grant
Question 2:
How did the FFWS grant affect academic
outcomes?
Average Impacts of the Grant on Enrollment:
2008-2011
                                     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:
 2008-2010
                                      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
      siblings
  •   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
                                             -15
Top: FFWS      94          83          79

Middle:        96          85          82
Control                                      -1
Middle:        93          84          81
FFWS
Bottom:        94          62          55
Control                                      + 17
Bottom:        97          83          72
FFWS
Impact of Grant on Total Number of Enrolled
Terms: 2008-2011
6

5
                                                             Treatment
4
                                                             Control

3

2                                                          p-=.001


1

0
    Bottom tercile          Middle tercile   Top tercile
                     Propensity to Persist
Impact of Grant on Number of Attempted
Credits: 2009-2010
30

25

20                                                               Treatment

                                                                 Control
15

10                                                            p-=.034


 5
                                                         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
60

50
                                                            Treatment
40
                                                            Control

30
                                                         p-=.331
20

10

 0
     Bottom tercile       Middle tercile   Top tercile
                  Propensity to Persist
Impact of Grant on Percent Completing 1-29
Credits: 2008-2010
100
 90
 80
 70                                                          Treatment
 60
                                                             Control
 50
 40                                                        p-=.025
 30
 20
 10
  0
      Bottom tercile        Middle tercile   Top tercile
                  Propensity to Persist
Impact of Grant on Percent Completing 60+
Credits: 2008-2010
100
 90
 80
 70                                                         Treatment
 60                                                         Control
 50
 40                                                       p-=.424
 30
 20
 10
  0
      Bottom tercile       Middle tercile   Top tercile
                  Propensity to Persist
Summary

• 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
  years.

• The grant appeared most effective for the
  students who were the least likely to persist in
  college
Are FFWS Requirements Driving the
Effects?
• 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
    too

• 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
Effects?
 • 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-
  effectiveness
• 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
    term
  • 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
Questions?
Visit www.finaidstudy.org for a copy of the paper

								
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