Employer-Sponsored Education Assistance and Graduate Program Choice, Cost, and Finance

38 Pages Posted: 4 Dec 2015 Last revised: 13 Mar 2019

See all articles by Gregory Gilpin

Gregory Gilpin

Montana State University - Bozeman

Michael Kofoed

United States Military Academy

Date Written: December 5, 2018


This paper studies the impact of the Economic Growth and Tax Relief Reconciliation Act of 2001 that amended employer-sponsored education assistance (ESEA) fringe benefits from taxable to nontaxable for graduate studies. ESEA is an integral part of graduate education finance and is the dominant non-loan source of student aid. Using difference-in-difference and triple-difference specifications, we empirically evaluate educational outcomes related to graduate education choice, cost, and finance. The empirical results suggest that post-law reform, non-degree graduate students who exercise ESEA benefits are 12.3 percentage points more likely to attend open-admission institutions, 12.5% less likely to attend in-state, 10.3% more likely to attend for-profit colleges, and no changes are identified on cost or education debt loads, relative to their pre-law reform peers. No differences in program choice are observed for degree-seeking graduate students. Additionally, the estimates suggest that while degree-seeking graduate students applying ESEA attend programs that cost, on average, $1,170 more, no changes are identified post-law reform (2008 dollars). Furthermore, degree-seeking graduate students that apply ESEA benefits take out, on average, $1,530 less in student loans, and this declines by an additional $1,474 post-law reform (2008 dollars). Analysis by graduate program and also by gender and age suggest substantial heterogeneity from graduate program educational outcomes, especially for MBA students

Keywords: Admissions Selectivity; Employer-sponsored Education Assistance; Fringe Benefits; Higher Education Finance; MBA; open-enrollment

JEL Classification: I22; I23; J33; J41; M12

Suggested Citation

Gilpin, Gregory and Kofoed, Michael, Employer-Sponsored Education Assistance and Graduate Program Choice, Cost, and Finance (December 5, 2018). Available at SSRN: https://ssrn.com/abstract=2698412 or http://dx.doi.org/10.2139/ssrn.2698412

Gregory Gilpin

Montana State University - Bozeman ( email )

Bozeman, MT 59717-2920
United States
406 551 4887 (Phone)

HOME PAGE: http://www.montana.edu/econ/gilpin

Michael Kofoed (Contact Author)

United States Military Academy ( email )

600 Thayer Rd
West Point, NY 10996
United States
801-540-8789 (Phone)

HOME PAGE: http://https://sites.google.com/site/michaelkofoed1

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