Institutional Variation in Enrollment of Low-Income Students: The Role of Prices, Financial Aid Policies and Selectivity

Socioeconomic diversity in tertiary education has come under increased scrutiny over the past few years. Policy makers and practitioners within higher education have devoted greater attention to encouraging more low-income students to pursue a college degree. This paper estimates the influence of prices (both sticker-price and net price), financial aid policies, and selectivity on the matriculation decisions of low-income students, across postsecondary institutions. All three factors are significant in determining the representation of Pell grant recipients as a percent of an institution’s entering class. A focus on net price, while important, ignores the significant influence of sticker-price (shock), selectivity, and financial aid policies on low-income students’ enrollment decisions, particularly at private institutions