A Difference-in-Difference Analysis of "Promise" Financial Aid Programs and Postsecondary Institutions

• In Event: Roundtable Session 3
  In Roundtable Session: Tuition and Financial Aid

Abstract

This study examines the influence of universal-eligibility financial aid, or “Promise” programs, on the behavior of postsecondary institutions. Promise programs provide aid to students to attend college and offer eligibility to all students from a particular geographic location. Using a unique panel dataset with data from 2000-2008, this paper employs a quasi-experimental difference-in-difference methodological design. We find that after the introduction of a Promise program, institutions receive significantly fewer state and local appropriations, yet do not significantly increase tuition and fees. We also find that Promise programs increase overall degree completion, with most of the growth from less-than-two-year awards and certificate credentials.

Authors

• Jennifer A. Delaney, University of Illinois at Urbana-Champaign

• Bradley K Hemenway, University of Illinois at Urbana-Champaign