Merit-Based Aid, College Affordability, and Student Success

Abstract

This dissertation examines effects of statewide merit-based aid on college prices and student success. In the second chapter of this dissertation, I examine whether four-year colleges in thirteen states that adopted a merit-based aid program changed their tuition and fees, the amount of institutional aid per student, and room and board charges more than four-year colleges in states without a merit-based aid program. I analyze data from the Integrated Postsecondary Education Data System with the difference-in-differences method. Results show that colleges in many states with merit-based aid did not raise their student charges or reduce the amount of institutional aid per student. The third and fourth chapters of this dissertation examine the effect of merit-based aid on student success in the example of Tennessee. In the third chapter, using the regression discontinuity method, I find that receiving merit-based aid increases the probability of earning a bachelor’s degree in the fourth year. However, it does not change whether a student earns a bachelor’s degree in the fifth or sixth year. In the fourth chapter, I use both event history analysis and regression discontinuity models to examine whether losing merit-based aid affects college persistence and graduation. Results show that losing merit-based aid decreases the probability of re-enrolling in college and earning a bachelor’s degree compared to maintaining the aid. Even compared to never receiving one, losing merit-based aid increases the probability of re-enrolling and graduating from college only for a limited time.