Panel Paper: Losing HOPE: Financial Aid and the Line Between College and Work

Saturday, November 9, 2013 : 2:45 PM
Plaza II (Ritz Carlton)

*Names in bold indicate Presenter

Celeste Carruthers, University of Tennessee and Umut Ozek, American Institutes for Research
Although a wealth of research has shown that financial aid reduces hurdles to college enrollment, less is known about how aid affects students after they are enrolled, much less how students react to the common occurrence of losing aid midway through their college careers. Using longitudinal data on four cohorts of Tennessee public college students, we find that failing to renew merit scholarships decreases credit loads, decreases the likelihood of declaring a major, decreases earnings, and increases the likelihood of leaving college without a degree for the workforce. Together, findings suggest that losing financial aid weakens students’ engagement with college, particularly at the extensive margin.