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The Effect of Federal Grants on Student Outcomes

Author

Listed:
  • Ian Fillmore

    (Washington University in St. Louis)

  • Sean McMahon

    (Analysis Group)

Abstract

Federal financial aid depends on a student's Expected Family Contribution (EFC)--the higher her EFC, the less aid a student receives. We estimate the effect of increasing federal aid on student outcomes by leveraging an increase in the income threshold for an "automatic zero EFC," which qualifies students for the most generous federal aid. We find little evidence that expanding eligibility for an automatic zero EFC affected student outcomes. We argue this may be due to the volatility of federal aid from year to year and highlight this as an important dimension for future research.

Suggested Citation

  • Ian Fillmore & Sean McMahon, 2022. "The Effect of Federal Grants on Student Outcomes," Working Papers 2022-011, Human Capital and Economic Opportunity Working Group.
    • Handle: RePEc:hka:wpaper:2022-011
    Note: MIP
    as

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    File URL: http://humcap.uchicago.edu/RePEc/hka/wpaper/Fillmore_McMahon_2019_effect-federal-grants-student-outcomes.pdf
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    File URL: http://humcap.uchicago.edu/RePEc/hka/wpaper/Fillmore_McMahon_2019_effect-federal-grants-student-outcomes.pdf
    File Function: Second version, April 2023
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    References listed on IDEAS

    as
    1. Thomas J. Kane, 2007. "Evaluating the Impact of the D.C. Tuition Assistance Grant Program," Journal of Human Resources, University of Wisconsin Press, vol. 42(3).
    2. 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.
    3. Jeffrey T. Denning & Benjamin M. Marx & Lesley J. Turner, 2019. "ProPelled: The Effects of Grants on Graduation, Earnings, and Welfare," American Economic Journal: Applied Economics, American Economic Association, vol. 11(3), pages 193-224, July.
    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. Amanda Eng & Jordan Matsudaira, 2021. "Pell Grants and Student Success: Evidence from the Universe of Federal Aid Recipients," Journal of Labor Economics, University of Chicago Press, vol. 39(S2), pages 413-454.
    6. John Bound & Sarah Turner, 2002. "Going to War and Going to College: Did World War II and the G.I. Bill Increase Educational Attainment for Returning Veterans?," Journal of Labor Economics, University of Chicago Press, vol. 20(4), pages 784-815, October.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    financial aid; Expected Family Contribution; EFC; volatility of federal aid;
    All these keywords.

    JEL classification:

    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
    • H81 - Public Economics - - Miscellaneous Issues - - - Governmental Loans; Loan Guarantees; Credits; Grants; Bailouts
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid

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