Who Does Aid Help? Examining Heterogeneity in the Effect of Grant Aid on Achievement
42 Pages Posted: 14 Aug 2018 Last revised: 2 Apr 2019
Date Written: March 7, 2019
Does grant aid impact achievement differently for low- and high-income students? I exploit the eligibility requirements of a state scholarship program that awards additional aid to merit-aid students majoring in STEM fields. A triple-difference design, using administrative data from a large institution and exploiting differences over time, by merit-aid recipient status, and by major type (STEM or non-STEM), shows that grant aid increases the GPAs and graduation prospects of low-income students but has little impact on high-income students. Additional analysis suggests that reduction in student part-time work among low-income students may be a potential mechanism for the heterogeneous achievement effects of grant aid by income. These results suggest that merit aid programs could be targeted more effectively than most currently are.
Keywords: achievement, heterogeneity by income, student aid
JEL Classification: I22, I24
Suggested Citation: Suggested Citation