Lottery Scholarships: Lessons Learned William R. Doyle Vanderbilt University

Lottery Scholarships: Lessons Learned

William R. Doyle

Vanderbilt University

Lottery Scholarships: Lessons Learned

Effect of lottery scholarships on:

• Attendance rates

• Student migration

• Adult migration

• Persistence and Completion

Other Effects:

• Unintended Consequences

Lottery Scholarships: CharacteristicsAward Criteria Award Amount

Florida: Bright Futures

GPA and SAT/ACT Full tuition at public plus $300

Georgia: HOPE GPA Full tuition at public plus $300

Kentucky: KEES GPA and SAT/ACT $1,000 per year

New Mexico: Lottery Success

College GPA Full tuition and fees, publics only

South Carolina: HOPE and Lottery Tuition Assistance

GPA, SAT/ACT and class rank

$2,500 plus $150 books, or cost of tuition

West Virginia: Promise

GPA and SAT/ACT Full tuition at publics

Source: Heller, 2004

States With Merit Aid Programs, 1994




Shift in State-Based Financial Aid

Effect of Merit Scholarships on Participation

• Dynarski, 2000

• Looked at attendance rates of young people in Georgia and other nearby states before and after implementation of HOPE

• Found that HOPE increased the college participation rate of 18-19 year olds by 7.0 to 7.9 percentage points

Dynarski, 2000:

“Due to key differences between the federal and Georgia programs, these estimates should be treated as a generous upper bound . . .”


Dynarski, 2000:

“Further, the evidence suggests that Georgia’s program has widened the gap in college attendance between blacks and whites and between those from low- and high-income families.”



Cornwell and Mustard 2003

“We estimate that the scholarship increased the overall freshmen enrollment rate by 6.9 percentage points with the gains concentrated in 4-year schools.”

Binder and Ganderton 2002

“Despite its generous terms, NM Success has not increased the overall college enrollment rate among high school graduates.”


• Many studies find that students are likely to shift from two-year to four-year institutions

• Effect of lower prices, different incentives are posited to be possible causes


Effect of Merit Scholarships on Student Migration

Dynarski 2000

• HOPE decreases the number of Georgia students attending out of state, from 5,000 to 4,500

• Effect is particularly strong at institutions in border states with typically large freshmen enrollments from Georgia

Effect of Merit Scholarships on Student Migration

Cornwell and Mustard 2003

• Utilize a slightly different methodology than Dynarski

• Results are very similar: HOPE has encouraged more students to attend higher education in-state.

Effect of Merit Aid Scholarships on Adult Migration

• No evidence from the literature yet exists on this question

• But:– More highly educated people are more mobile– Mobility among the educated is driven

primarily by job market concerns

Effect of Merit Aid on Persistence and Completion

Henry, Rubenstein and Bugler 2004

• Looked at similar students above and below the “borderline” for HOPE

• Students with HOPE:– Had more credit hours– Had higher GPA’s– Were more likely to graduate

Binder and Ganderton 2002

• Students with Success scholarships (NM) were more likely to drop out

• Students with Success scholarships were also more likely to reduce credit hours and withdraw from courses

Effect of Merit Aid on Persistence and Completion

Merit Aid Programs: Unintended Consequences

• Grade Inflation: Bradbury and Campbell (2003) find that grade inflation did occur in Georgia high schools after HOPE was implemented

• Lexus effect: Substition of scholarship dollars for consumption does occur (Cornwell and Mustard, 2002)

• Tuition, Room and Board: Some evidence that college cost rise as a result of these scholarships (Long, 2003).

Who Adopts Merit Aid Programs?

• Factors associated with adoption– Low SAT/ACT Scores– Low outmigration– Low educational attainment– Higher levels of income

• No relationship found between adoption and:– Political characteristics– Diffusion

Source: Doyle, 2006

A Decade of Merit Aid: The Summary

• Participation: scholarships increase enrollment, but effect is different by state.

• Participation: scholarships tend to shift student from two year to four year institutions

• Migration: scholarships reduce out-of-state migration to attend college

• Migration: no evidence on adult migration• Persistence: Evidence is mixed, no clear

findings

Georgia: HOPE Recipients, 1993: 2002

42,807

219,938

0

50,000

100,000

150,000

200,000

250,000

Source: Georgia Student Finance Commission 2004

Georgia: HOPE Awards, 1993-2002(In Millions)

21.4

360.4

0

50

100

150

200

250

300

350

400

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

Source: Georgia Student Finance Commission 2004

Georgia: Lottery Proceeds, 1992-2002

Florida: Bright Futures Recipients

43,132

57,434

73,031

92,214

100,302

0

20,000

40,000

60,000

80,000

100,000

120,000

1997 1998 1999 2000 2001

Source: CEPRI, 2003

Florida: Bright Futures Awards

76.3

101.2

139.5

168.5174.9

0

20

40

60

80

100

120

140

160

180

200

1997 1998 1999 2000 2001

Source: CEPRI, 2003

Florida: Lottery Proceeds, 1992-2002

West Virginia: Lottery Proceeds, 1992-2002

Issues for the Future

• Long term academic effects:– Retention/completion– Academic major– High school performance

• Effects on need based aid– Squeezing out of need-based programs– Need within merit/ Merit within need programs

Documents

Lottery Scholarships: Lessons Learned William R. Doyle Vanderbilt University