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Does Student Aid Affect College Enrollment? New evidence on a Persistent Controversy.

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  • Education

Abstract

1dp1.eps Discussion Paper No. 1 Williams Project on the Economics of Higher Education Williams College Denison Gatehouse Williamstown, MA 01267 Does Student Aid Affect College Enrollment? New Evidence on a Persistent Controversy Michael S. McPherson and Morton Owen Schapiro April 1990 DP- 1 © 1990 - (Michael S. McPherson and Morton Owen Schapiro) Note: This paper is intended for private circulation and should not be quoted or referred to in publication without the permission of the authors. American Economic Review, forthcoming. Does Student Aid Affect College Enrollment? New Evidence on a Persistent Controversy Michael S. McPherson and Morton Owen Schapiro* Revised April 1990 * Department of Economics, Fernald House, Williams College, Williamstown, MA 01267. The authors wish to thank Robert H. Haveman, three anonymous referees and the participants in the Economics Seminar at Williams College and in the National Bureau of Economic Research Conference on the Economics of Higher Education. Barry Bosworth, Lee Hansen, Frank Lichtenberg and Charles Manski also contributed helpful comments. Michael P. O’Malley, Diedre Goodwin, and Mary Skinner provided excellent research assistance. Research support from the Andrew W. Mellon Foundation, the Spencer Foundation, and the Teagle Foundation is acknowledged with gratitude. ABSTRACT Numerous econometric studies, based mostly on cross-section data, have found substantial effects of student aid on college enrollment. These effects have been hard to discern in historical data. We report here on an econometric analysis of a time-series of college enrollment and net cost data for white students disaggregated by income and sex.We find significant net cost effects on enrollments of low-income students. This raises serious doubts about the hypothesis that federal student aid has failed to affect enrollment patterns in U.S. higher education significantly over the past two decades. Certainly no aspect of the evaluati

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