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Why should financial aid affect university participation? A review of the literature

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  • Elena Vettoretto
  • Davide Azzolini
  • Loris Vergolini

Abstract

This contribution reviews the literature on the role of financial aid in enhancing university participation. This aim will be reached through three main steps. First, we describe a theoretical framework based on rational action theory that could explain the effects exerted by the different measures. Second, we analyse the main forms of financial aid developed by the policy makers in Europe and in the US. More precisely, we look at the role played by: grants, tuition fees, loans and a novel approach in the financial aid debate: asset building. The paper attempts to provide an overview of the different measures’ effects on enrolment, academic performance and completion. Third, based on the reviewed literature, the paper tries to derive some general policy implications for the Italian case.

Suggested Citation

  • Elena Vettoretto & Davide Azzolini & Loris Vergolini, 2019. "Why should financial aid affect university participation? A review of the literature," FBK-IRVAPP Working Papers 2019-03, Research Institute for the Evaluation of Public Policies (IRVAPP), Bruno Kessler Foundation.
    • Handle: RePEc:fbk:wpaper:2019-03
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    References listed on IDEAS

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    1. Dynarski, Susan, 2000. "Hope for Whom? Financial Aid for the Middle Class and Its Impact on College Attendance," National Tax Journal, National Tax Association;National Tax Journal, vol. 53(3), pages 629-662, September.
    2. Lorraine Dearden & Emla Fitzsimons & Gill Wyness, 2011. "The Impact of Tuition Fees and Support on University Participation in the UK," CEE Discussion Papers 0126, Centre for the Economics of Education, LSE.
    3. Dynarski, Susan M. & Scott–Clayton, Judith E., 2006. "The Cost of Complexity in Federal Student Aid: Lessons From Optimal Tax Theory and Behavioral Economics," National Tax Journal, National Tax Association;National Tax Journal, vol. 59(2), pages 319-356, June.
    4. Susan M. Dynarski, 2003. "Does Aid Matter? Measuring the Effect of Student Aid on College Attendance and Completion," American Economic Review, American Economic Association, vol. 93(1), pages 279-288, March.
    5. Christopher Cornwell & David B. Mustard & Deepa J. Sridhar, 2006. "The Enrollment Effects of Merit-Based Financial Aid: Evidence from Georgia's HOPE Program," Journal of Labor Economics, University of Chicago Press, vol. 24(4), pages 761-786, October.
    6. Davide Azzolini & Loris Vergolini, 2014. "Tracking, Inequality and Education Policy. Looking for a Recipe for the Italian Case," FBK-IRVAPP Working Papers 2014-08, Research Institute for the Evaluation of Public Policies (IRVAPP), Bruno Kessler Foundation.
    7. Azzolini, Davide & Martini, Alberto & Romano, Barbara & Vergolini, Loris, 2018. "Affording college with the help of asset building: First experimental impacts from Italy," Economics Letters, Elsevier, vol. 169(C), pages 27-30.
    8. Benjamin L. Castleman & Bridget Terry Long, 2016. "Looking beyond Enrollment: The Causal Effect of Need-Based Grants on College Access, Persistence, and Graduation," Journal of Labor Economics, University of Chicago Press, vol. 34(4), pages 1023-1073.
    9. Cheatham, Gregory A. & Elliott, William, 2013. "The effects of family college savings on postsecondary school enrollment rates of students with disabilities," Economics of Education Review, Elsevier, vol. 33(C), pages 95-111.
    10. Angela Boatman & Bridget Terry Long, 2016. "Does Financial Aid Impact College Student Engagement?," Research in Higher Education, Springer;Association for Institutional Research, vol. 57(6), pages 653-681, September.
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    More about this item

    Keywords

    Financial aid; Asset bulding; University participation;
    All these keywords.

    JEL classification:

    • A23 - General Economics and Teaching - - Economic Education and Teaching of Economics - - - Graduate
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education

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