Panel: Issues Relating to Higher Education Financing

Friday, November 3, 2017: 10:15 AM-11:45 AM
Haymarket (Hyatt Regency Chicago)

*Names in bold indicate Presenter

Panel Organizers:  Constantine Yannelis, New York University
Panel Chairs:  Rajashri Chakrabarti, Federal Reserve Bank of New York
Discussants:  Michael Lovenheim, Cornell University and Rajeev Darolia, University of Kentucky

Nudging at a National Scale: Experimental Evidence from a Fafsa Completion Campaign
Kelly Bird, United States Military Academy at West Point, Benjamin L. Castleman, University of Virginia, Joshua Goodman, Harvard University and Cait Lamberton, University of Pittsburgh

Do Local Communities Respond to State Merit Aid Programs?
Rajashri Chakrabarti1, Nicole Gorton1 and Joydeep Roy2, (1)Federal Reserve Bank of New York, (2)Independent Budget Office, NYC

Debt and Human Capital: Evidence from Student Loans
Vyacheslav Fos1, Andres Liberman2 and Constantine Yannelis2, (1)Boston College, (2)New York University

Parental Resources and College Attendance: Evidence from Lottery Wins
George Bulman1, Sarena F Goodman2, Robert Fairlie1 and Adam Isen3, (1)University of California, Santa Cruz, (2)Federal Reserve - Board of Governors, (3)U.S. Department of the Treasury

Using a variety of data sources and innovative methods, this panel looks at alternative forms of higher education financing and effects and implications.  Complicated FAFSA application processes often limit access, an expansive literature has shown. The first paper contributes new evidence about both scalability of and mechanisms underlying informational campaigns’ efficacy by evaluating a randomized financial aid nudge initiative for 450,000 high school seniors registered with the Common Application, a national non-profit organization. Preliminary data suggests such nudges work at national scale to increase college enrollment, particularly among students whose parents did not attend college.

The second paper analyzes a hitherto-unexplored impact of merit aid programs: whether merit aid programs led to changes in state support for K-12 education, and whether and how school districts responded to such changes. Exploiting the staggered adoption of state merit aid programs and employing a synthetic control estimation strategy, the paper finds robust evidence that merit aid programs led to a significant decline in state funding for K-12 education. The decline in state aid was mostly offset through increases in local revenues by school districts, underscoring the importance of a compensatory relationship between these two forms of revenues.

The third paper investigates the dynamic relation between debt and investments in human capital. It finds a negative causal effect of the level of undergraduate student debt on the probability of enrolling in a graduate degree. The final paper examines more than one million children whose parents won a state lottery to trace out the effect of additional household resources on college attendance.  The results reveal modest, increasing, and only weakly concave effects of resources on the transition to college: moderate sized wins have little effect while large wins that exceed the cost of college reveal a high upper bound.


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