How Financial Aid Affects Persistence

44 Pages Posted: 31 Jan 2004 Last revised: 28 Dec 2022

Date Written: January 2004

Abstract

The Pell Grant program is the largest means-tested financial assistance available to postsecondary students across the United States, yet researchers have only limited evidence on the causal effects of these grants. This paper examines the effect of Pell grants on student persistence after the first year. The paper uses unique, student-level data from all public colleges in Ohio. The data include detailed financial data which allow me to identify small discontinuities in the Pell grant formula. I exploit these discontinuities to identify the causal effects of the voucher. The results based on discontinuity approaches suggest that Pell grants reduce college drop-out behavior. The results in this paper support other evidence that find a relationship between need-based aid and college completion (e.g. Dynarski 2002, Turner and Bound 2002).

Suggested Citation

Bettinger, Eric, How Financial Aid Affects Persistence (January 2004). NBER Working Paper No. w10242, Available at SSRN: https://ssrn.com/abstract=492355

Eric Bettinger (Contact Author)

Stanford University ( email )

Stanford, CA 94305
United States