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Closing the Gap: The Effect of a Targeted, Tuition-Free Promise on College Choices of High-Achieving, Low-Income Students

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Listed:
  • Susan Dynarski
  • C.J. Libassi
  • Katherine Michelmore
  • Stephanie Owen

Abstract

High-achieving, low-income students attend selective colleges at far lower rates than upper-income students with similar achievement. Behavioral biases, intensified by complexity and uncertainty in the admissions and aid process, may explain this gap. In a large-scale experiment we test an early commitment of free tuition at a flagship university. The intervention did not increase aid: rather, students were guaranteed before application the same grant aid that they would qualify for in expectation after admission. The offer substantially increased application (68 percent vs 26 percent) and enrollment rates (27 percent vs 12 percent). The results suggest that uncertainty, present bias, and loss aversion loom large in students’ college decisions.

Suggested Citation

  • Susan Dynarski & C.J. Libassi & Katherine Michelmore & Stephanie Owen, 2018. "Closing the Gap: The Effect of a Targeted, Tuition-Free Promise on College Choices of High-Achieving, Low-Income Students," NBER Working Papers 25349, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:25349
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    More about this item

    JEL classification:

    • I0 - Health, Education, and Welfare - - General
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • 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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