The Role of Price in College Decisions: Implications for aid policy

Bridget Terry Long

Although the government spends over $100 billion each year on financial aid, access to higher education is still a concern for many Americans. The enrollment gaps between the rich and poor are nearly as large as they were thirty years ago, and among those that do attend, substantial differences exist between the types and levels of institutions attended by background. Despite these persistent gaps, recent trends in financial aid suggest a shift away from need-based support. Moreover, many researchers are beginning to question the importance of costs as several recent studies have found that price does not explain much of the variation in who does and does not attend college. This project proposes to examine the relative importance of monetary and non-monetary factors in college decisions by studying a recent group of high school graduates using the 1997 National Longitudinal Survey of Youth. This data set contains extensive information about educational experiences, performance, family background, and expectations for a nationally representative sample of approximately 9,000 youth. I will use multivariate regression analysis to examine how postsecondary costs influenced the decisions of whether and where to attend college. In addition, I will quantify the role of other factors such as family background, high school preparation, and academic achievement on college access. These findings will have important implications for the types of policies that would best address current barriers to postsecondary education. Furthermore, the results will allow me to simulate the likely effects of recent programs such as the federal HOPE and Lifetime Learning Tax Credits and state merit-based aid programs such as the Georgia HOPE and Florida Bright Futures Scholarships. As one of the first studies to look nationally at how high school graduates made decisions about college during the late 1990s, this project will contribute to the current debate on how to make higher education accessible to all.

About Bridget Terry Long

Trained as an economist, Dr. Long's work applies the theory and methods of economics to examine various aspects of the market for higher education. Her research interests focus on college access and choice, the effects of financial aid policy, and the behavior of postsecondary institutions. Additional research interests include how educational disparities in primary and secondary education translate into outcomes in higher education. Many of these topics are covered in a course taught by Dr. Long on the Economics of higher education. The class examines the critical trends and funding issues facing students, colleges, and society. In addition to serving as an Assistant Professor at the Harvard Graduate School of Education, Dr. Long is a Faculty Lecturer for the Harvard Institute for Educational Management and part of the Associates Program of the National Center of Public Policy and Higher Education. Originally from the Chicago area, Dr. Long received her Ph.D. and M.A. in Economics from Harvard University and her A.B. from Princeton University. She is a past recipient of the American Educational Research Association Dissertation Award and a National Science Foundation Graduate Studies Fellowship. In addition, she has received research grants from the Spencer Foundation and National Association of Student Financial Aid Administrators.