Research in Higher Education

, Volume 26, Issue 4, pp 337-362

First online:

The effects of tuition and financial aid on the enrollment decision at a state university

  • Joseph J. SenecaAffiliated withBureau of Economic Research, Rutgers University
  • , Michael K. TaussigAffiliated withBureau of Economic Research, Rutgers University

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Students admitted to more than one institution of higher education face one of the most difficult decisions of their lives. The determinants of these enrollment decisions are crucially important to the yield of qualified students from the number admitted to colleges and universities. This paper specifies an empirical model of the enrollment decision for students admitted both to Rutgers University and to at least one alternate college. Our estimates of the parameters of the model with a binary choice multiple regression equation show that students base their enrollment decision on the relative quality of the schools, their own abilities and family resources, and the net costs of the schools. The results are relevant to university tuition and financial aid policies. The general methodology is replicable by other institutions seeking information on the determinants of the enrollment decision.