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The Power of Certainty: Experimental Evidence on the Effective Design of Free Tuition Programs

Author

Listed:
  • Elizabeth Burland
  • Susan Dynarski
  • Katherine Michelmore
  • Stephanie Owen
  • Shwetha Raghuraman

Abstract

Proposed "free college" policies vary widely in design. The simplest set tuition to zero for everyone. More targeted approaches limit free tuition to those who demonstrate need through an application process. We experimentally test the effects of these two models on the schooling decisions of low-income students. An unconditional free tuition offer from a large public university substantially increases application and enrollment rates. A free tuition offer contingent on proof of need has a much smaller effect on application and none on enrollment. These results are consistent with students placing a high value on financial certainty when making schooling decisions.

Suggested Citation

  • Elizabeth Burland & Susan Dynarski & Katherine Michelmore & Stephanie Owen & Shwetha Raghuraman, 2023. "The Power of Certainty: Experimental Evidence on the Effective Design of Free Tuition Programs," American Economic Review: Insights, American Economic Association, vol. 5(3), pages 293-310, September.
    • Handle: RePEc:aea:aerins:v:5:y:2023:i:3:p:293-310
    DOI: 10.1257/aeri.20220094
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    Cited by:

    1. Manuel Salas-Velasco, 2024. "Debiasing the availability heuristic in student loan decision-making," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 51(2), pages 501-528, May.

    More about this item

    JEL classification:

    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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