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Information Constraints and Financial Aid Policy

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  • Judith Scott-Clayton

Abstract

One justification for public support of higher education is that prospective students, particularly those from underprivileged groups, lack complete information about the costs and benefits of a college degree. Beyond financial considerations, students may also lack information about what they need to do academically to prepare for and successfully complete college. Yet until recently, college aid programs have typically paid little attention to students' information constraints, and the complexity of some programs can exacerbate the problem. This chapter describes the information problems facing prospective students as well as their consequences, drawing upon economic theory and empirical evidence.

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  • Judith Scott-Clayton, 2012. "Information Constraints and Financial Aid Policy," NBER Working Papers 17811, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:17811
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    Cited by:

    1. Harald Beyer & Justine Hastings & Christopher Neilson & Seth Zimmerman, 2015. "Connecting Student Loans to Labor Market Outcomes: Policy Lessons from Chile," American Economic Review, American Economic Association, vol. 105(5), pages 508-513, May.
    2. Bleemer, Zachary & Zafar, Basit, 2018. "Intended college attendance: Evidence from an experiment on college returns and costs," Journal of Public Economics, Elsevier, vol. 157(C), pages 184-211.
    3. Eleanor Wiske Dillon & Jeffrey Andrew Smith, 2020. "The Consequences of Academic Match between Students and Colleges," Journal of Human Resources, University of Wisconsin Press, vol. 55(3), pages 767-808.
    4. Justine S. Hastings & Christopher A. Neilson & Seth D. Zimmerman, 2013. "Are Some Degrees Worth More than Others? Evidence from college admission cutoffs in Chile," NBER Working Papers 19241, National Bureau of Economic Research, Inc.
    5. Frauke H. Peter & Vaishali Zambre, 2014. "Wer studiert, ist informiert?: Studienentscheidungen und Informationsdefizite," DIW Roundup: Politik im Fokus 35, DIW Berlin, German Institute for Economic Research.
    6. Ehlert, Martin & Finger, Claudia & Rusconi, Alessandra & Solga, Heike, 2017. "Applying to college: Do information deficits lower the likelihood of college-eligible students from less-privileged families to pursue their college intentions?: Evidence from a field experiment," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 67, pages 193-212.
    7. Justine Hastings & Christopher A. Neilson & Seth D. Zimmerman, 2015. "The Effects of Earnings Disclosure on College Enrollment Decisions," NBER Working Papers 21300, National Bureau of Economic Research, Inc.
    8. Murphy, Richard & Scott-Clayton, Judith & Wyness, Gill, 2019. "The end of free college in England: Implications for enrolments, equity, and quality," Economics of Education Review, Elsevier, vol. 71(C), pages 7-22.
    9. Murphy, Richard & Scott-Clayton, Judith & Wyness, Gill, 2017. "The end of free college in England: implications for quality, enrolments and equity," LSE Research Online Documents on Economics 86593, London School of Economics and Political Science, LSE Library.
    10. H. Kenny Nienhusser & Toko Oshio, 2017. "High School Students’ Accuracy in Estimating the Cost of College: A Proposed Methodological Approach and Differences Among Racial/Ethnic Groups and College Financial-Related Factors," Research in Higher Education, Springer;Association for Institutional Research, vol. 58(7), pages 723-745, November.
    11. Martin McGuigan & Sandra McNally & Gill Wyness, 2014. "Student Awareness of Costs and Benefits of Educational Decisions: Effects of an Information Campaign and Media Exposure," DoQSS Working Papers 14-19, Quantitative Social Science - UCL Social Research Institute, University College London.
    12. Nicholas W. Hillman & Erica Lee Orians, 2013. "Financial Aid's Role in Meeting State College Completion Goals," Education Finance and Policy, MIT Press, vol. 8(3), pages 349-363, July.
    13. Pistolesi, Nicolas, 2017. "Advising students on their field of study: Evidence from a French University reform," Labour Economics, Elsevier, vol. 44(C), pages 106-121.
    14. Martin McGuigan & Sandra McNally & Gill Wyness, 2016. "Student Awareness of Costs and Benefits of Educational Decisions: Effects of an Information Campaign," Journal of Human Capital, University of Chicago Press, vol. 10(4), pages 482-519.
    15. Jacqmin, Julien, 2014. "The Emergence of For-Profit Higher Education Institutions," MPRA Paper 59299, University Library of Munich, Germany.

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    More about this item

    JEL classification:

    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy

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