Chapter

Higher Education: Handbook of Theory and Research

Volume 24 of the series Higher Education: Handbook of Theory and Research pp 1-45

Why Financial Aid Matters (or Does Not) for College Success: Toward a New Interdisciplinary Perspective

  • Sara Goldrick-RabAffiliated withEducational Policy Studies and Sociology, University of Wisconsin
  • , Douglas N. HarrisAffiliated withEducational Policy Studies, University of Wisconsin
  • , Philip A. Trostel

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Abstract

The failure to account for group differences in responsiveness to financial aid is a primary shortcoming of existing higher education research, and compromises the explanatory power of theories and models. Even more importantly, it limits the ability of policymakers and practitioners to achieve the important goals of increased college success and reduced achievement gaps. In this chapter, we identify and explore concepts from social sciences disciplines which hold promise in terms of informing future theoretical developments in the field. Drawing primarily on the work of behavioral economists, and economic sociologists, we discuss concepts such as aversion to risk, work centrality, ambiguity aversion, and consistency theory which may serve to illuminate several unexplained anomalies in prior empirical research. We also describe the methodological problems plaguing the study of financial aid and argue that tests of existing theories, as well as those we propose here, require research that addresses selection bias in who receives aid. We then describe other aspects of future research critical to the testing of these concepts.