Evaluating Financial Aid Effects on College Student Dropout Risks: A Causal Inference Approach

Rong Chen

The causal impact of financial aid on college student dropout cannot be completely understood without carefully considering the non-random nature of aid assignments and the longitudinal process of student dropout. Few existing studies have accounted for these issues, which could produce biases that undermine the precision of the estimates of financial aid effects. Building on the advances in causal inference research in social sciences, this study employs the combined use of propensity score techniques and multilevel event history methods to improve the validity of evaluating financial aid policies in higher education. Using two national datasets containing longitudinal information on students entering four-year institutions in 2004, this project examines patterns of college student dropout gaps, identifies via causal inference methods both the short-term and long-run effects of financial aid on student dropout. In addition, it also investigates how these effects may vary across students with different socioeconomic status and racial/ethnic backgrounds. The proposed study is highly significant for at least two reasons. First, it explores the longitudinal nexus between financial aid and college student dropout to shed light on how larger social structures, such as government, may play a role in equalizing educational opportunities. Second, it aims to tackle the causal inference about the effectiveness of educational interventions, an issue that has recently drawn increasing attention from academia and policymakers.

About Rong Chen

Rong Chen earned her Ph.D. in Higher Education from the University of Michigan, and joined the faculty of the College of Education and Human Services at Seton Hall University as an assistant professor in 2007. She previously served as a research consultant for the National Advisory Committee on Student Financial Aid (ACSFA) at the U.S. Department of Education, and a faculty member at Beijing International Study University in China. Dr. Chen’s research interest areas focus on education policy, finance of higher education, college access, choice and degree attainment, and educational equity. Her recent work has examined how federal financial aid programs, state financing policies, and institutional practices affect student dropout risks, and how socioeconomic and racial/ethnic disparities in student success can be explained by differences in these policies. The proposed project is an extension of her research interests in promoting diversity and equity in higher education. Dr. Chen is a recipient of a 2005 American Educational Research Association (AERA) Dissertation Grant, a 2005 Association for Institutional Research (AIR) Dissertation Fellowship, a 2008 Stanley E. and Ruth B. Dimond Best Dissertation Award from the University of Michigan, a 2010 AIR Research Grant, and 2009 & 2011 Summer Research Awards from SHU University Research Council (URC). Her work has appeared in the Journal of Higher Education, Research in Higher Education, and Higher Education: Handbook of Theory and Research. Currently, Dr. Chen serves on the Editorial Advisory Board for the book series entitled Globalization and Social Justice published by AMS, Press Inc. She also serves as a manuscript reviewer for the journal Sociology of Education. As a faculty member, she teaches in the areas of public policy, statistical methods, research design, and survey analysis.