Promoting Inequality in Higher Education: An Analysis of the Effectiveness of State-Sponsored Merit-Based Financial Aid Programs on Low-Income and Minority Students

114 pages. A thesis presented to the Department of Finance and the Clark Honors College of the University of Oregon in partial fulfillment of the requirements for degree of Bachelor of Science, Spring 2016.Education policy experts and educational institutions alike are cognizant of the reality that low-income students are less likely to attend college than students from middle and upper income families. For those who do make it to college, socioeconomically disadvantaged students are again less likely to graduate from college with a degree than their higher income peers. In order to address the issue of college accessibility as well as the high burden of college tuition that has been placed on students and their families, many states have implemented merit-based financial aid programs. These programs are designed to expand access to higher education for students who would not otherwise be able to afford it. This thesis will examine three of these financial aid programs in depth: the Georgia HOPE Scholarship and Grant Program, the New Mexico Lottery Scholarship Program and the Indiana Twenty-first Century Scholarship Program, and whether they are effective at expanding college accessibility to low-income and minority youths. This thesis will also analyze specific characteristics of these programs that potentially further exacerbate the divide between socioeconomically disadvantaged students and their higher income counterparts. Embedded within the analysis are examples of programs that have, to some degree, been successful at getting low-income students to enroll in college, which provide insight into how merit-based financial aid programs could be designed to meet the goal of affording low-income students a fair chance at college