The Impact of Merit Aid on College Choice and Degree Attainment: Reexamining Florida’s Bright Futures Program

Abstract

We replicate and extend prior work on Florida’s Bright Futures merit aid scholarship to consider its effect on college enrollment and degree completion. We estimate causal impacts using a regression discontinuity design to exploit SAT thresholds that strongly determine eligibility. We find no positive impacts on attendance or attainment, and instrumental variable results generally reject estimates as small as 1 to 2 percentage points. Across subgroups, we find that eligibility slightly reduces 6-year associate degree attainment for lower socioeconomic status students and may induce small enrollment shifts among Hispanic and White students toward 4-year colleges. Our findings of these minimal-at-best impacts contrast those of prior works, attributable in part to methodological improvements and more robust data, and further underscore the importance of study replication.

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

“…Racially minoritized and low-income students tend to consider themselves as having a higher likelihood of going to college when they learn they are eligible for merit-aid (Ness & Tucker, 2008), but their actual enrollment is negatively associated with merit-aid programs, particularly at more selective institutions (Griffith, 2011). While some low-income high-performing students benefit from merit-aid, low-income students are generally less responsive to-or even negatively affected by-merit-aid programs than high-income students (Gurantz & Odle, 2022;Lowry, 2019;Zhang et al, 2016).…”

“…Probably due to this design feature, merit-aid programs, especially pure gradebased merit-aid, can induce a substitution effect away from 2-year colleges and toward 4-year colleges (Bruce & Carruthers, 2014;Gurantz & Odle, 2022;Zhang et al, 2016). However, Domina (2014) used state-level data and differentiated merit-aid programs by generosity and eligibility and found that merit-aid programs that include needbased criteria or cover less than the full level of tuition significantly increased community college enrollments, relative to enrolling at more expensive public 4-year universities.…”

“…Focusing on students attending Tennessee’s state community colleges, Welch (2014) found that, among marginally eligible students, reducing the cost of attendance through the HOPE scholarship does not impact persistence, academic performance, degree completion, expected earnings, or short-term earnings after college. Gurantz and Odle (2022) even found a negative relationship between students’ eligibility for Florida Medallion Scholars (FMS) and their 6-year associate degree attainment for lower socioeconomic status students.…”

College Costs, Financial Aid, and Student Decisions

“…The literature to date has shown that these merit programs can lead to improvements in college readiness (Pallais, 2009); increases in college enrollment and performance (Bruce & Carruthers, 2014;Carruthers & Özek, 2016;); higher rates of degree attainment (Scott-Clayton, 2011); decreases in the loss of talented students to other states (Zhang & Ness, 2010); and even decreases in military enlistment in favor of college attendance (Barr, 2016). But a recent study of Florida's Bright Futures scholarship finds very small impacts on enrollment and attainment (Gurantz & Odle, 2022).…”