Who Does Aid Help? Examining Heterogeneity in the Effect of Student Aid on Achievement

42 Pages Posted: 14 Aug 2018 Last revised: 10 Mar 2019

See all articles by Breyon Williams

Breyon Williams

University of South Carolina - Department of Economics

Date Written: March 7, 2019

Abstract

Does financial aid impact achievement differently for low- and high-income students? I exploit the eligibility requirements of a state merit-aid program that awards additional aid to STEM majors. 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 student 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 may be a potential mechanism for this differential effect. 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

Williams, Breyon, Who Does Aid Help? Examining Heterogeneity in the Effect of Student Aid on Achievement (March 7, 2019). Available at SSRN: https://ssrn.com/abstract=3216238 or http://dx.doi.org/10.2139/ssrn.3216238

Breyon Williams (Contact Author)

University of South Carolina - Department of Economics ( email )

Columbia, SC
United States

HOME PAGE: http://www.breyononline.com

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