An Assessment of “HOPE-Style” Merit Scholarships
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An Assessment of “HOPE-Style” Merit Scholarships
Christopher M. Cornwell David B. MustardUniversity of Georgia
University of GeorgiaInstitute of Higher EducationSeptember 2012
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Basic Economics Start with the standard model
People try to do the best they can given the circumstances
People respond to incentives Applied to higher ed
What is the typical student’s objective? What is the state’s or institution’s
objective?
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Estimating Policy Effects Structural vs reduced-form
approaches Problem of identification – what is the
relevant counterfactual? Estimating causal effects
Instrumental variables Difference-in-differences Regression discontinuity designs Matching
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Understanding Diff-in-Diff Suppose after HOPE is implemented,
the enrollment rate in Georgia increases. Can we say that HOPE increased the enrollment rate?
Suppose enrollment rates in Georgia are higher than in other neighboring states in the period after HOPE. Can we say that HOPE increased the enrollment rate?
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Identification with DD
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Example
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Our Work on Merit Aid
Background
Findings Financing Merit Aid Enrollments Stratification Academic Achievement
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Background Growth of large-scale, state merit aid Georgia’s HOPE Scholarship as the model Common features
Entitlement – based on high-school GPA (and sometimes test scores)
No limit on # of award winners Scholars are eligible for multiple years
Common justifications Increase enrollments in state universities Keep the best and brightest in state Promote academic achievement
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Large-scale State Merit Programs Arkansas Academic Challenge (1991) Georgia’s HOPE (1993) Florida Bright Futures (1997) New Mexico Success (1997) Louisiana Tops (1998) South Carolina Life (1998) Kentucky Ed. Excellence Sch. (1999) U. of Alaska Scholars Program (1999) Washington Promise (1999) Maryland HOPE (2000) Nevada Millennium (2000) West Virginia Promise (2002) Tennessee HOPE (2004) Massachusetts Adams Scholarship (2005) Wyoming Hathaway (2006)
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Georgia’s HOPE Program HOPE – Helping Outstanding Pupils
Educationally Introduced in 1993 and funded by a state
lottery Almost $3.6 billion disbursed to over
900,000 students Two types of aid:
Scholarship – merit-based; for degree-seeking students
Grant – not based on merit; for certificate and diploma seekers
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Georgia’s HOPE Program Scholarship awards
Public schools – full tuition and fees + $300 book allowance
Private schools – $3,000 voucher Eligibility and retention
‘B’ average in HS core courses 3.0 in college, checked at systematic
intervals
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Georgia’s HOPE Program Significant program changes
Income cap relaxed in 1994 and eliminated in 1995
Expanded to include non-traditional students (1996), home-schoolers (1998)
“Add-on” scholarships (late 1990s) Removal of Pell offset (2001)
Growing concern that expenditures will outstrip lottery revenue
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Georgia’s HOPE Program
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Georgia’s HOPE Program
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Assessing HOPE1. Financing Merit Aid2. Enrollments
a. Effect on Georgia institutionsb. Effect on “brain drain”
3. College stratification4. Academic achievement
a. College GPAb. Course loadsc. Course and major selection
5. But do they stay?
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1. Financing Merit Aid Methods of financing
Lottery (Georgia, Florida, Kentucky, New Mexico, South Carolina, Tennessee)
General revenue (Arkansas, Louisiana, Washington)
Tobacco settlement (Michigan) Video gambling (West Virginia) Interest on land leases and sales (Alaska)
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1. Financing Merit Aid
What is the annual per capita spending of adults on the Georgia lottery?
What is the annual per capita spending of people at this meeting?
73.6% of Georgia population is > 18 1/3 of adults do not play lottery
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1. Financing Merit Aid Sales per capita = $371.39 Sales per > 18 = $503.92 1/3 of adults don’t play, so … Sales per > 18 who play = $752.13
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1. Financing Merit Aid
Table 3: Lottery Sales by Income Quintile, 2001 Variable Quintile 1
<18,590 Quintile 2
$18,590-20,000 Quintile 3
$20,000-21,700 Quintile 4
$21,700-24,355 Quintile 5 >$24,355
Lottery Sales Per Capita 330.34 303.89 377.57 325.78 283.42 Avg Per Capita Income 17,178.72 19,251.28 20,871.10 22,701.78 28,404.66 Avg Sales as % of Avg PCI 1.89 1.58 1.81 1.43 1.03 Number of Counties 32 32 31 32 32 Note: All income variables are in real dollars calculated using the Consumer Price Index with 1998 as the base year.
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1. Financing Merit Aid
Lottery Sales by Black Population Quintile, 2001 Variable Quintile 1
< 10.8% Quintile 2
10.8-23.4% Quintile 3
23.4-31.0% Quintile 4
31.0-43.715% Quintile 5 >43.715%
Lottery Sales Per Capita 265.15 251.12 298.51 346.20 457.55 Avg Per Capita Income 22,418.97 23,115.69 20,728.42 20,574.47 21,565.53 Avg Sales as % of Avg PCI 1.20 1.14 1.44 1.70 2.24 Number of Counties 32 32 31 32 32
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1. Financing Merit Aid
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1. Financing Merit Aid
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1. Financing Merit Aid
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2. Enrollments
Group Overall4-Year Publics
4-Year Privates
2-Year Publics
2-Year Publics + Techs
All 5.9 9.0 13.0 ns ns
Whites 3.6 4.4 9.2 ns ns
Blacks 15.8 26.0 16.8 ns 11.6
Percentage Increases in Freshmen EnrollmentsAttributable to HOPE
By Institution Type and Race, 1988-97
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2. Enrollments
Students in State
Residents in College Stayers
Out-of-Staters Leavers
Number 1216 280 840 376 -560
t-ratio 1.44 0.41 1.39 1.28 3.09Out-of-State effect = Students in State – StayersLeavers effect = Residents in College – Stayers
HOPE Effects on Student MigrationNumbers of Recent Freshmen in 4-Year SchoolsBy Residency and Destination, 1988, 92, 94, 96
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3. College Stratification
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3. College Stratification
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3. College Stratification
Quality Measure All University Comprehensive 4-YearMean SATM 6.2 9.4 ns nsMeanSATV 4.9 14.3 6.9 nsSATM sd ns -2.2 ns nsSATV sd ns -3.5 ns 1.8Top 10% ns 7.6 1.7 ns
Effects of HOPE on SAT Scores and Class RankBy Institution Type, 1989-2001
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3. College Stratification
Quality Measure All University Comprehensive 4-YearAcceptance Rate -7.5 -8.4 -3.6 -9.9
Yield Rate ns 4.1 ns 3.5
Effects of HOPE on Acceptance and Yield RatesBy Institution Type, 1989-2001
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4. Academic AchievementCumulative UGA Freshmen GPA Distributions
Residents vs Non-Residents
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4. Academic AchievementUGA Freshmen, by Residency and HOPE Status
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4. Academic AchievementPercentage of Freshmen Completing a Full Load
Resident vs Non-Residents
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4. Academic Achievement Course-Load Effects at UGA
5.1% drop in full-load enrollment rate 16.1% rise in withdrawal rate 9.3% drop in full-load completion rate 3100 fewer courses taken Effects concentrated among students
predicted to be on or below the retention margin
63% increase in summer-school course-taking in 1st summer; 44% in 2nd
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4. Academic Achievement Core-Course Selection at UGA
.63 credit (6%) drop in Math and Science credits in 1st year
1.2 credit drop over first two years Consistent with substitution away from courses
that have low expected GPAs Major Selection at UGA
1.2 pct point increase in probability of declaring an Education major (~ 50 students)
Effect stronger among women 1.7 pct point decrease in probability of declaring
a Business major
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More on HOPE
http://www.terry.uga.edu/hope/