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Education savings accounts (ESAs) are education funding mechanisms that allow for families to receive a deposit of public funds to a government-authorized savings account. Using student-level longitudinal data, this paper examines how families participating in the Florida Gardiner Scholarship Program use education savings account funds. Results indicate that families use an increasing proportion of ESA funds the longer students remain in the program. The longer students remain in the program, the share of ESA funds devoted to private school tuition decreases while expenditure shares increase for curriculum, instruction, tutoring, and specialized services. Students in rural areas not only use a greater portion of their ESA funds than families in urban and suburban areas, but they also spend smaller portions of their funds on tuition and appear to customize more.
In the competitive U.S. higher education market, institutions differentiate themselves to attract both students and tuition dollars. One understudied example of this differentiation is the increasing trend of "colleges" becoming "universities" by changing their names. Leveraging variation in the timing of such conversions in an event study framework, I show that becoming a university increases enrollments at both the undergraduate and graduate levels, which leads to an increase in degree production and total revenues. I further find that these effects are largest when institutions are the first in their market to convert to a university and can lead to negative spillover effects on non-converting colleges.
The ongoing crisis in teacher pension funding has led states to consider various reforms in plan design, to replace the traditional benefit formulas, based on years of service and final average salary (FAS). One such design is a cash balance (CB) plan, long deployed in the private sector, and increasingly considered, but rarely yet adopted for teachers. Such plans are structured with individual 401(k)-type retirement accounts, but with guaranteed returns. In this paper I examine how the nation’s first CB plan for teachers, in Kansas, has played out for system costs, and the level and distribution of individual benefits, compared to the FAS plan it replaced. My key findings are: (1) employer-funded benefits were modestly reduced, despite the surface appearance of more generous employer contribution matches; (2) more importantly, the cost of the pension guarantee, which is off-the-books under standard actuarial accounting, was reduced quite substantially. In addition, benefits are more equitably distributed between short termers and career teachers than under the back-loaded structure of benefits characteristic of FAS plans. The key to the plan’s cost reduction is that the guaranteed return approximates a low-risk market return, considerably lower than the assumed return on risky assets.
Between 2005 and 2016, international enrollment in US higher education nearly doubled. I examine how trade shocks in education affect public universities' decision-making. I construct a shift-share instrument to exploit institutions' historical networks with different origins of international students, income growth, and exchange-rate fluctuations. Contrary to claims that US-born students are crowded out, I find that international students increase schools' funding via tuition payments, which leads to increased in-state enrollment and lower tuition prices. Schools also keep steady per-student spending and recruit more students with high math scores. Lastly, states allocate more appropriations to universities that attract fewer international students.
We provide theory and evidence about how the design of college financial aid programs affects a variety of high school, college, and life outcomes. The evidence comes from an eight-year randomized trial where 2,587 high school ninth graders received a $12,000 merit-based grant offer. During high school, the program increased their college expectations and non-merit effort but had no effect on merit-related effort (e.g., GPA). After high school, the program increased graduation from two-year colleges only, apparently because of the free college design/framing in only that sector. But we see no effects on incarceration or teen pregnancy. Overall, the results suggest that free college affects student outcomes in ways similar to what advocates of free college suggest and making aid commitments early, well before college starts, increases some forms of high school effort. But we see no evidence that merit requirements are effective. Both the standard human capital model and behavioral economics are required to explain these results.
Many state governments impose tuition regulations on universities in pursuit of college affordability. How effective are these regulations? We study how universities' "sticker price'' and institutional financial aid change during and after tuition caps and freezes by leveraging temporal and geographic variation in the United States from 1990 to 2013. We find that listed tuition is lower than it would have been in the absence of the regulation by 6.3 (9.3) percentage points at four-year (two-year) colleges during the regulation. Meanwhile, the negative impact on institutional aid at four-year colleges during a tuition cap/freeze is nearly double (-11.3 percentage points) the impact on listed tuition, implying that universities adjust institutional aid in order to recoup some of their losses from the tuition cap/freeze. Effects are long-lasting at four-year institutions; two years after the regulation is lifted, tuition is 7.3 percentage points lower and institutional aid is 19.5 percentage points lower than it would have been without the regulation. Meanwhile at two-year colleges, tuition "catches up" so that by three years after the end of the regulation tuition is not statistically different from what it would have been in the absence of the regulation. Universities that are not research-intensive and universities that have a greater dependency on tuition revenue exhibit larger negative impacts on institutional aid with smaller impacts on "sticker price''. Our estimates suggest that tuition caps and freezes do not simply lower the prices that students pay for college and that the benefit of tuition regulations is unequally spread across types of universities and students.
Enrollment increased slightly at both the California State University and University of California systems in fall 2020, but the effects of the pandemic on enrollment in the California Community College system are mostly unknown and might differ substantially from the effects on 4-year colleges. This paper provides the first analysis of how the pandemic impacted enrollment patterns and the academic outcomes of community college students using administrative college-level panel data covering the universe of students in the 116-college California Community College system. We find that community college enrolment dropped precipitously in fall 2020 – the total number of enrolled students fell by 4 percent in spring 2020 and by 15 percent in fall 2020 relative to the prior year. All racial and ethnic groups experienced large enrollment decreases in spring and fall 2020, but African-American and Latinx students experienced the largest drops at 17 percent in fall 2020. Enrollment fell the most for first-year students in the community college system, basic skills courses, and fields such as engineering/industrial technology, education, interdisciplinary studies, and art. There were smaller decreases for continuing students, academic courses transferable to four-year institutions, and business and science fields. Enrollment losses were felt throughout the entire community college system, and there is no evidence that having a large online presence in prior years protected colleges from these effects. In terms of course performance, there was a larger disruption to completion rates, withdrawal rates, and grades in spring 2020 than in fall 2020. These early findings of the effects of the pandemic at community colleges, which serve higher percentages of lower-income and minority students, have implications for policy, impending budgetary pressures, and future research.
We explore the role of defaults and choice architecture on student loan decision-making, experimentally testing the impact pre-populating either decline or accept decisions compared to an active choice, no pre-population, decision. We demonstrate that the default choice presented does influence student loan borrowing decisions. Specifically, compared to active choice, students presented within a pre-populated decline decision were almost five percent less likely to accept all packaged loans and borrowed between 4.6 and 4.8 percent less in federal educational loans. The reductions in borrowing appears to be concentrated within unsubsidized loans with those assigned to the opt-in condition borrowing 8.3 percent less in unsubsidized loans. These changes in borrowing did not induce substitution towards private or Parent PLUS loans nor did they negatively impact enrollment, academic performance, or on-campus work outcomes in the same academic year.
Between 1935-1940 the Home Owners' Loan Corporation (HOLC) assigned A (minimal risk) to D (hazardous) grades to neighborhoods that reflected their "mortgage security" and visualized these grades on color-coded maps used by banks and other mortgage lenders to provide or deny home loans within residential neighborhoods. In this study, we leverage a spatial analysis of 144 HOLC-graded core-based statistical areas (CBSAs) to understand how historic HOLC maps relate to current patterns of school funding, racial diversity, and performance. We find districts and schools located today in historically redlined neighborhoods have less district-level per-pupil revenues, larger shares of Black and non-White student bodies, less diverse student populations, and worse average test scores relative to those located in A, B, and C neighborhoods. These nationwide results are consistent by region and when controlling for CBSA. Finally, we document a persistence in these patterns across time, with overall positive time trends regardless of HOLC grade but widening gaps between D vs. A, B, and C outcomes. These findings suggest that education policymakers need to consider the historical implications of redlining and past neighborhood inequality on neighborhoods today when designing modern interventions focused on improving life outcomes of students of color.