Does financial aid help students choose to attend higher priced colleges and universities?

This study sheds light upon the role that financial aid plays in expanding access for financially needy students to attend higher priced colleges and universities. The research is timely because Congress is scheduled to consider reauthorizing the Higher Education Act again in 1997, and this dissertation provides a current assessment of the effectiveness of student financial aid programs toward achieving educational opportunity. Descriptive and regression analyses are used to examine the effects of financial aid upon the price of institution attended by full-time dependent freshmen who first enrolled at their first choice four-year college or university in the 1989/90 academic year. The sample is drawn from the Beginning Postsecondary Student Survey. The analyses rely upon a social psychological framework that has been expanded to include race and sex, two key variables in sociological models, and expected future earnings, an important variable in econometric models. Other variables include socioeconomic status, SAT score, distance from home, geographic region, educational aspirations, and parental encouragement. Because prior research had not adequately measured the effects upon institutional choice of different amounts, combinations, types, and sources of financial aid and because the financial aid available to students has changed over time, the analyses are repeated using each of seven different measures of financial aid. Three conclusions may be drawn from the descriptive and regression analyses. First, students who received financial aid attended higher priced institutions. But, the effects of financial aid upon the price of institution attended varied based upon the amounts, types, combinations, and sources of aid received. Second, unlike research using samples of students who were enrolled in college during the early 1980's, the analyses in this study show that students who received loans attended higher priced institutions. Third, even with the availability of financial aid, students with lower socioeconomic status attended lower priced four-year colleges and universities than their counterparts with higher socioeconomic status. The relationship between socioeconomic status and institutional price was not linear, however. Implications of the analyses from both statistical and policymaker perspectives as well as directions for future research are presented.PhDEducationEducation financeHigher educationPublic administrationSocial SciencesUniversity of Michigan, Horace H. Rackham School of Graduate Studieshttp://deepblue.lib.umich.edu/bitstream/2027.42/130329/2/9722062.pd