August 2009

IZA DP No. 4362: Do No-Loan Policies Change the Matriculation Patterns of Low-Income Students?

published in: Economics of Education Review, 2011, 30 (2), 203-214

We empirically examine whether there is discernable variation in the matriculation patterns of low-income students at public flagship institutions in the United States around changes in institutional financial-aid policies that target resident, low-income students with need-based aid. While enrollment responses cannot be attributed to these programs, we do find that institutions that introduce income-targeted aid subsequently enroll financially needier and geographically more-distant students. These findings imply that "improved" access may actually displace some needy students in favor of others.