Financing College Opportunity

Abstract

Some states invest relatively heavily in financial aid programs that benefit lower-income citizens, while other states concentrate their investment in programs that benefit students from higher-income backgrounds. States also vary in their levels of direct appropriations to campuses, a form of public subsidy that has long been viewed as benefitting middle-income citizens. What factors influence states to allocate higher education subsidies in a more or a less redistributive manner? This article reports on a study that examined sources of variation in state spending on need-based aid, merit-based aid, and appropriations over the period 1990–2010. Findings document relationships among spending patterns and structural and political conditions of states, indicating a “trade-off” between spending on merit- and need-based aid; as states invest more in the former, they reduce spending on the latter. We also show that the presence of a Republican governor and the strength of Republican representation in statehouses each is associated with increased state spending on need-based financial aid. Our results further show that increased wealth is positively associated with state spending on merit-based financial aid programs and state appropriations for higher education, but not need-based financial aid. We also find distinctive patterns of state support for higher education depending on the degree of centralization of a state’s governance arrangement for higher education; namely, the presence of a highly centralized structure is associated with decreased spending on merit-based aid programs and increased state appropriations to colleges and universities.

The Good, The Bad, and the Balanced: A Typology of State Merit-Aid Programs for Community College Students

“…Some programs were still “on the books” but did not have funding to make actual awards (e.g., Connecticut’s Roberta B. Willis Scholarship during the financial years ending 2016–2019). We tried to use data for years when the policy was not influenced by funding constraints to examine the policy design effects of the merit-aid programs on community college students; however, historically, financial aid policies were substantially influenced by public funding availability (McLendon et al, 2014; Toutkoushian & Shafiq, 2010). Similarly, our study focused on state-administered merit-aid programs; but in many states, merit-aid was administered at the institutional level (e.g., University of Alabama, 2022).…”

The Relationships Between State Higher Education Funding Strategies and College Access and Success

“…The effects of partisan control may be a function of whether students at public institutions are disproportionately White (Taylor et al, 2020), but others have found that the relationship between increased racial diversity and lower spending on public higher education holds across the ideological spectrum (Foster & Fowles, 2018). Research on the extent to which higher education governance structures affect state funding levels has found a mix of positive and negative relationships (e.g., McLendon et al, 2014;Tandberg, 2013).…”

State Higher Education Funding during COVID-19: Exploring State-Level Characteristics Influencing Financing Decisions

“…The fourth contextual factor shaping a state’s policy ecology looks beyond intrastate influences and considers the larger regional and national context. For example, higher education researchers have examined the diffusion effect of neighboring states on various policy innovations, such as merit-based scholarships, performance funding, and integrated student data systems (Cohen-Vogel, et al, 2008; Doyle, 2006; Hearn et al, 2008; Leveille, 2012; Li, 2017; McLendon et al, 2014). These policies migrate between states due to policy emulation/avoidance, imitation, competition between states, coercive governmental regulations, and socialization forces (Sponsler, 2010).…”