1. When Pell Today Doesn't Mean Pell Tomorrow: Evaluating Aid Programs with Dynamic Eligibility
- Author
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Society for Research on Educational Effectiveness (SREE), Monnica Chan, and Blake H. Heller
- Abstract
Generally, need-based financial aid improves students' academic outcomes (Nguyen, Kramer & Evans, 2019). However, the largest source of need-based grant aid in the United States, the Federal Pell Grant Program (Pell), has a mixed evaluation record (Bettinger, 2004; Rubin, 2011; Marx & Turner, 2018; Park & Scott-Clayton, 2018; Carruthers & Welch, 2019; Denning, Marx, & Turner, 2019; Liu, 2020; Eng & Matsudaira, 2021). We assess the minimum Pell Grant in a regression discontinuity framework in a sample of first-time, first-year students who enroll and file a FAFSA at Kentucky public colleges and universities between 2011 and 2017. We focus on whether and how year-to-year changes in aid eligibility and interactions with other sources of aid attenuate Pell's estimated effects on post-secondary outcomes. This evaluation complements past work by assessing explanations for the null or muted impacts found in our analysis and other Pell evaluations. We also discuss the limitations of using regression discontinuity methods to evaluate Pell--or other interventions with dynamic eligibility criteria--with respect to generalizability and construct validity. Between 1992 and 2022, published tuition and fees at public four-year U.S. colleges and universities more than doubled in real terms (Ma & Pender, 2022). For cohorts facing high direct costs of college, student financial aid has become an essential resource to facilitate access to post-secondary training. Indeed, an extensive literature documents that students respond positively to the availability of need-based financial aid (Nguyen, Kramer & Evans, 2019) and other policies that reduce college costs (Deming & Dynarski, 2010; Page & Scott-Clayton, 2016). Consistent with past studies of the minimum Pell grant (e.g., Marx & Turner, 2018; Park & Scott-Clayton, 2018), we find no evidence that initial Pell eligibility confers academic advantages to marginally eligible students. We also find that initial Pell eligibility significantly decreases the amount a student borrows in their first year; and, for some groups of students, this reduction in borrowing grows over time. We also build upon past studies to consider the ways annual changes in Pell eligibility ("churn") may affect our estimates by assessing the impact of initial Pell eligibility in the population of FAFSA filers who are disproportionately exposed to instability in Pell aid over time. Our findings suggest important interactions between financial aid programs both in the short- and medium-run. In the full sample (as shown in Table 1) as well as within most subgroups, the Pell advantage in grant aid is offset by reduced borrowing, such that we cannot reject the null hypothesis of no difference in total aid (all grants plus all loans) at the Pell eligibility threshold. These null estimated differences in total aid correspond with null estimated impacts on academic outcomes (as shown in Table 2). However, within subgroups that experience the strongest contrasts in aid stability, we find correspondingly large differences in borrowing effects (with smaller, less negative borrowing effects for subgroups that experience more aid stability), which exceed the Pell advantage in grant aid. Within these groups, we find suggestive evidence connecting aid instability and reduced borrowing to worse academic outcomes. In our context, marginal Pell eligibility in one year is a poor predictor of future Pell receipt. This lack of predictability in Pell eligibility emphasizes the barriers complex aid applications and annual renewal processes can create for students (Bettinger et al., 2012; Baum & Scott-Clayton, 2013; Dynarski, Page & Scott-Clayton, 2022). As shown in Figure 1, among re-enrolling students in our analytic sample who did re-apply for federal aid after receiving a Pell grant in their first year, less than 65% maintained any Pell aid, while nearly 16% of initially ineligible students received a Pell grant in their second year of enrollment. In other words, aid recipients often lose Pell grant eligibility from year-to-year, while non-aid recipients can gain eligibility. This "churn" between Pell-eligibility and ineligibility means that cross-sectional estimates of the longer-term effects of receiving a Pell Grant in one year may be attenuated by a narrowing of differences in Pell aid received over time, especially near the Pell eligibility threshold, where year-to-year changes in Pell eligibility are most common. Since Pell aid is least stable for students with EFCs near the minimum Pell threshold, and these students provide identifying variation in aid eligibility for evaluations of the minimum Pell grant that rely on a regression discontinuity (RD) design, attending to year-to-year variation in aid receipt is central to understanding the character of the treatment-comparison contrast in policy exposure in this type of quasi-experimental evaluation of the Pell grant. We emphasize that researchers and policymakers should thus interpret our findings as estimating the effect of receiving a [approximately]$300 award for a single year (about half the minimum Pell Grant award for a full-time student during our sample period) in contrast to reflecting aid impacts for "typical" or "average" Pell recipient (as shown in Figure 2). This is because the majority of Pell students receive larger awards and are more likely to maintain year-to-year Pell eligibility than students with a first-year EFC near the Pell-eligibility threshold, like those in our sample. These facts emphasize the limitations of RD evaluations of the minimum Pell Grant with respect to external validity (i.e., how the results should be expected to generalize) and construct validity (in this case, with respect to what "treatment" the treatment-comparison contrast represents), despite maintaining a strong claim as an internally valid method to estimate the total impact of marginal Pell eligibility in a student's first-year of college. The impact of Pell "churn" on our results thus has important implications for future design and evaluations of broad-reaching student aid programs or any repeated intervention with time-varying, dynamic eligibility criteria. Researchers and policymakers should exercise caution when extrapolating results from this study (or any RD evaluation of the minimum Pell grant) to other groups of students, other amounts of Pell aid, or other grant aid programs.
- Published
- 2024