Abstract

The Pell Grant is the largest financial assistance available to postsecondary students across the United States. It is administered by the U.S. Department of Education, and the funds are disbursed directly to student's college or university. Even though it is the largest financial assistance program available to postsecondary students, there is limited evidence on the causal effects of these grants. This may partially be due to the amount of aid given in comparison to an increase in education cost. The limited grant may, in part, be attributable to the discrepancy between the magnitude of the aid given and the relentless upsurge in the cost of higher education. Which may hinder the ability of scholars and policymakers to comprehensively assess the efficacy of the Pell Grant program, in fulfilling its mandate of facilitating access to higher education for eligible individuals.

This paper examines the effect of Pell grant on students’ decision making in terms of higher education and degree attainment. The paper uses a survey called The National Longitudinal Study of Youth 1997 (NLSY97), which is a large-scale study conducted by the U.S. Bureau of Labor Statistics. NLSY97 tracks the employment and educational experiences of a nationally representative sample of youth from 1997-2019. The data include Total income, parents’ education, gender, race, GPA, Standard Test Scores (PSAT and ACT), Highest Grade completed, Postsecondary transcript disposition, total number of arrests, and date of degree attained. To avoid ability bias which refers to the tendency to overestimate the impact Pell grant on education attainment by failing to account for pre-existing differences in the abilities or aptitudes of the study participants, I used the publicly available NLSY97 data which contains a rich set of covariates that allow me to control for ability bias. The main result of the study is that financial aid, particularly the Pell Grant, plays a significant role in

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education attainment among students in high school and postsecondary schools. The study explores the variations of Pell Grant from its foundation in 1973-74 and how it has evolved to become the largest financial assistance available to postsecondary students across the United States.

Advisor

Merkle, Jessica

Department

Business Economics

Disciplines

Adult and Continuing Education | Early Childhood Education | Educational Assessment, Evaluation, and Research | Educational Methods | Education Economics | Scholarship of Teaching and Learning | Secondary Education

Keywords

Pell Grant, Higher Education, Degree Attainment, Financial aid, Educational Opportunity, post-secondary students

Publication Date

2023

Degree Granted

Bachelor of Arts

Document Type

Senior Independent Study Thesis

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