Examining State Aid: A Long-Term Assessment of Merit-Based Aid Policies on Student Retention Postgraduation

• In Event: Marriott Roundtable Session 10
  In Roundtable Session: Fostering Equity Through Federal, State, and Institutional Policies

Abstract

State merit aid programs aim to discourage “brain-drain” by offering bright students reduced tuition at public institutions. While the intention of these programs is to retain students in-state for postsecondary education, many merit aid programs also aim to contribute to economic development through retention of students in the workforce. This study analyzes B&B:08/12 using propensity score methods and supports proponents of merit aid as a government investment in human capital. However, results also suggest that rather than encouraging students to remain in-state after graduation, the benefits of merit aid may make students more mobile and more likely to relocate post-graduation. If students choose to move out of state following graduation, states may be misallocating their financial aid investments.

Authors

• Rachel Anne Burns, State Higher Education Executive Officers

• T. Austin Lacy, RTI International