Can the Elimination of Aid Toward For-Profit Colleges Shift Student Enrollment? California as Case Study

• In Event: 44.084 - Roundtable Session 18
  In Roundtable Session: 44.084-18 - Tuition and Aid Policies: How State and Federal Policy Shapes Students and Institutions

Abstract

The sharp increase in attendance at for-profit colleges has raised concerns about the cost and quality of these institutions. Federal authorities have proposed regulations to restrict federal subsidies to be used at low-performing schools, yet there is little evidence on how for-profit students might respond to these regulations. I investigate this phenomenon by studying California’s need- and merit-aid program, which used two policy changes to first restrict and then eliminate for-profits as participating institutions. Using a differences-in-differences strategy, I find that more than two-thirds of high school students who would have enrolled in a for-profit forgo the award entirely, with the remaining students shifting into the community college sector. Work in progress will examine impacts on degree completion.

Author

• Oded Gurantz, Stanford University