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How Financial Aid Affects Persistence

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  • Eric Bettinger

Abstract

The Pell Grant program is the largest means-tested financial assistance available to postsecondary students across the United States, yet researchers have only limited evidence on the causal effects of these grants. This paper examines the effect of Pell grants on student persistence after the first year. The paper uses unique, student-level data from all public colleges in Ohio. The data include detailed financial data which allow me to identify small discontinuities in the Pell grant formula. I exploit these discontinuities to identify the causal effects of the voucher. The results based on discontinuity approaches suggest that Pell grants reduce college drop-out behavior. The results in this paper support other evidence that find a relationship between need-based aid and college completion (e.g. Dynarski 2002, Turner and Bound 2002).

Suggested Citation

  • Eric Bettinger, 2004. "How Financial Aid Affects Persistence," NBER Working Papers 10242, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:10242
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    References listed on IDEAS

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    1. Neil S. Seftor & NSarah E. Turner, 2002. "Back to School: Federal Student Aid Policy and Adult College Enrollment," Journal of Human Resources, University of Wisconsin Press, vol. 37(2), pages 336-352.
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    JEL classification:

    • I2 - Health, Education, and Welfare - - Education

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