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Does Merit Aid Program Design Matter? A Cross-Cohort Analysis

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Abstract

Twenty-one US states currently offer some form of merit-based postsecondary financial aid, although the generosity and eligibility requirements of merit aid programs varies from state to state. This article uses nationally representative data from high school students in the early 1990s and the early 2000s to evaluate the relationship between the design of merit aid programs and their effects on student achievement and college trajectories. The findings suggest that programs that guarantee full tuition to recipients have greater effects on students’ high school course-taking and college choice than less generous programs. Further, I find provisional evidence to suggest that programs with relatively simple merit-based eligibility requirements are more effective than programs with more complex means-tested eligibility requirements.

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Notes

  1. In most merit aid programs, scholarships are renewable for up to 4 years, as long as recipients remain enrolled in college full-time and earn a minimum GPA. In Michigan, however, merit aid is allocated in a one-year lump sum.

  2. As an example, between 1990 and 1992, 12th grade NAEP math scores increased by 4.7 scale points in states that never implemented merit aid. In that same pre-policy period, NAEP math scores increased by 4.9 scale points in states that implemented full-tuition merit aid programs between 1992 and 2004.

  3. Massachusetts also falls in this category, but is not included in the analyses since its aid program came online after ELS students graduated high school. Massachusetts is the only US state that awards aid exclusively on the basis of test scores.

  4. Arkansas also falls in this category, but is not included in the analyses.

  5. Although both the NELS and ELS also administered standardized tests of reading ability in the 10th grade, these measures are not available in the 12th grade.

  6. The ELS college enrollment data is available to researchers via a restricted-use data license. In compliance with NCES restricted-use data requirements, the number of cases in analyses of these data are rounded to the nearest 10.

  7. Since relatively few students in either cohort enrolled private colleges, I was unable to study the effects of merit aid programs implementation on students’ odds of enrolling in in-state private universities. This is unfortunate, since many merit aid programs provide smaller tuition subsidies for these institutions.

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  1. Department of Education, School of Education, University of California, Irvine 2062 Education, Irvine, CA, 92697-5500, USA

    Thurston Domina

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Domina, T. Does Merit Aid Program Design Matter? A Cross-Cohort Analysis. Res High Educ 55, 1–26 (2014). https://doi.org/10.1007/s11162-013-9302-y

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