The Impact of Merit Aid on College Choice and Degree Attainment: Reexamining Florida’s Bright Futures Program

We replicate and extend prior work on Florida’s Bright Futures merit aid scholarship to consider its effect on college enrollment and degree completion. We estimate causal impacts using a regression discontinuity design to exploit SAT thresholds that strongly determine eligibility. We find no positive impacts on attendance or attainment, and instrumental variable results generally reject estimates as small as 1 to 2 percentage points. Across subgroups, we find that eligibility slightly reduces 6-year associate degree attainment for lower socioeconomic status students and may induce small enrollment shifts among Hispanic and White students toward 4-year colleges. Our findings of these minimal-at-best impacts contrast those of prior works, attributable in part to methodological improvements and more robust data, and further underscore the importance of study replication.

Essays on state merit-based financial aid : seeking STEM, revisiting methodology, and test retakers

This dissertation investigates several topics in state merit-based financial aid research. The main research content includes three separate studies, primarily using the administrative datasets from the Missouri Department of Higher Education. The first study is an empirical paper that examines the effects of the Missouri Bright Flight Scholarship (a merit-based financial aid) on producing STEM graduates in Missouri 4-year public institutions. The fuzzy regression discontinuity estimates indicate that this merit aid program has a negative but statistically insignificant effect on STEM/engineering initial major choice and degree completion. Particularly, the aid still has a negative impact on male students but may encourage female students to enter a STEM field. The second study is a technical note that addresses three ignored issues about regression discontinuity application in merit-based financial aid research: retaking and test score manipulation, rounding errors in the running variable, and misleading statistical inference. I re-examine the practices in recent related studies and provide recommendations for future financial aid research, particularly about dealing with test scores appropriately in regression discontinuity designs. The third study is a policy brief about the consequence of allowing test retaking in merit aid programs. Using the Missouri administrative data, I primarily compare the percentages of aid eligible students based on both the first-time and the highest ACT composite scores in different demographic groups. The empirical results indicate that underrepresented students are less likely to retake the ACT compared to their peers and the acceptance of the highest score brings more inequitable impacts on underrepresented students. The discussion may help policymakers to better understand the retaking behaviors so that they can make related policies to benefit underrepresented students with more effectiveness.

Does Broad-Based Merit Aid Improve College Completion? Evidence from New Mexico's Lottery Scholarship

We use the natural experiment of a state lottery scholarship to measure the effect of generous financial aid on graduation rates at New Mexico's flagship public university. During the study period, the scholarship program paid full tuition for eight semesters for any state resident earning a 2.5 grade point average in their first semester at any public two-year or four-year college. We find a significant positive completion effect of 10 percentage points (17.9 percent) for academically well-prepared students that is offset by a large negative effect of 11.6 percentage points (38.8 percent) for less-prepared students. We posit that the scholarship program, which effectively erased the difference in tuition at two- and four-year colleges, may have induced weaker students to take their chances on a more prestigious, yet riskier, academic path.