A Loanly Road to Teaching: Recruiting Talented Students Through Service Scholarships

• In Event: College and Post-College Outcomes of Merit-Based Financial Aid

Abstract

Teacher shortages are a global challenge. This problem is aggravated in low-income schools (OECD, 2020), and for more qualified teachers (UNESCO, 2015), a pressing issue given the substantial short- and long-run effects that more productive teachers have on student (Rivkin et al., 2005; Chetty et al., 2014; Araujo et al., 2016). During the 2022-2023 school year, half of all schools in the US experienced teacher shortages (NCES, 2023).

A popular solution is offering service scholarships, which are grants aimed at attracting students to enroll, graduate, and teach in high-need areas. The grant requires a commitment to teach for a specified number of years in a targeted type of school. If the agreement is not fulfilled, the grant is converted into a loan.

While these policies have been implemented globally—including 28 ongoing U.S. programs—and proposed as solutions to the U.S. crisis (Darling-Hammond et al., 2023; Garcı́a et al., 2023), causally identifying their impact on recruitment over time remains challenging. Despite several correlational studies (Podolski and Kini, 2016; Wiederspan, 2018), there is little causal evidence on teaching recruitment and its long-term impact (Steele et al., 2010; Neilson et al., 2022). Moreover, no causal evidence exists on how these programs influence students’ teaching and financial trajectories outside of the service agreement compared to their higher education paths in the absence of such programs.

Can these policies induce students to teach in high-need areas, and what is their impact after the agreement ends? How likely and risky are they for recipients who do not fulfill the agreement?

Using a fuzzy regression discontinuity design with 14 years of national administrative data that comes from a collaboration between schools, test-administrators, higher education institutions and financial institutions, I study the Beca Vocación de Profesor, a service scholarship in Chile that offers free tuition for teaching degree programs to high-achieving high school graduates, in order to address the shortages of highly qualified teachers in publicly funded schools—a global and recurrent issue. I find that 9.2% of high-scoring admission test takers were induced to enroll in the program. For every three scholarships awarded, one additional talented student enrolled in a teaching program, while the other two would have enrolled regardless. Importantly, I show that the policy led recipients to teach in publicly funded schools, even after the service agreement ended. However, I also find that the program increased recipients' probability of dropping out of teaching programs, in a context where 40% never taught at all, and the grant ends up converting into a loan that exceeds over-borrowing aid limits.

My results suggest four policy recommendations to improve the resilience of teacher recruitment while safeguarding prospective teaching program students: the need for service scholarships to avoid crowding out no-risk grants, to incorporate evidence and theory from loan programs by integrating income-contingent repayment to enhance welfare, providing information and considering loan caps for potential recipients, as discussed in Chile and the US, and implementing institutional incentives to reduce dropout rates among loan recipients, as demonstrated in Brazil.

Author

• Nicolas Rojas Souyet, Teachers College, Columbia University
  Presenting Author