Association for Public Policy Analysis & Management

Since 2001, 21 of 50 U.S. states have implemented policies that allow undocumented immigrants to qualify for in-state resident tuition (ISRT) rates at public colleges and universities within their respective state. In 7 of these states undocumented immigrants are also eligible for state-funded financial aid. We extend the existing literature on the effects of ISRT policies by including more years of data, which allows us to include recent legislative changes in 9 additional states. Additionally, we extend the literature by studying the additional impacts of allowing undocumented students to qualify for state financial aid. Futhermore, we differentiate the impacts of these policies on enrollement in two-year versus four-year colleges. Lastly, we explore the interaction between these policies and the Deferred Action for Childhood Arrivals program. In order to explore these topics we address the following research questions:

1. What are the effects of ISRT and financial aid policies on high school graduation, two-year community college enrollment and graduation, and four-year college enrollment and graduation? 
2. Did Deferred Action for Childhood Arrivals (DACA) affect the impact of the state-level policies?

Data and Methods

We use individual-level data from the monthly basic Current Population Survey (CPS) for July 1999 to December 2015.  The CPS differentiates between enrollment in two-year versus four-year institutions in the education supplement, which is only conducted each October. The CPS does not identify undocumented immigrants directly. We follow the other literature addressing this topic and use Mexican-born non-citizens as a proxy for likely undocumented immigrants. We use a basic difference-in-difference model to estimate the impacts of the policies. We specify six different sets of controls in order to ensure that our results are robust.

Findings and Discussion

Our estimates suggest that in-state tuition for undocumented immigrants increased high school graduation rates for undocumented immigrants by 3 to 5 percentage points, increased college enrollment rates of undocumented immigrants by 3 to 4 percentage points, and increased college graduation rates by 1 to 2 percentage points.  The magnitude of these results is within the range of the estimates reported by other studies.  Our study adds to the consistent evidence that ISRT policies increases attainment of higher education levels for undocumented immigrants.

Our estimates suggest that adding eligibility for financial aid to in-state tuition policies increases college enrollment of Mexican non-citizens by approximately 4 percentage points.  This is as large as the impact of the in-state tuition policies themselves.  Our results also suggest that eligibility for state-funded financial aid to in-state tuition policies also increases college graduation rates for Mexican non-citizens.  However, the impact is smaller than the impact of state-funded financial aid on college enrollment.

Our results are inconclusive in regards to differentiating between the impacts on enrollment in two-year versus four-year colleges.

Preliminary results suggest that DACA negatively impacts college enrollment, likely due to DACA recipients being able to legally enter the workforce.