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Closing the Gap: The Effect of a Targeted, Tuition-Free Promise on College Choices of High-Achieving, Low-Income Students

Susan Dynarski, C.J. Libassi, Katherine Michelmore, Stephanie Owen

NBER Working Paper No. 25349
Issued in December 2018, Revised in June 2020
NBER Program(s):Children, Economics of Education, Labor Studies, Public Economics

High-achieving, low-income students attend selective colleges at far lower rates than upper-income students with similar achievement. Behavioral biases, intensified by complexity and uncertainty in the admissions and aid process, may explain this gap. In a large-scale experiment we test an early commitment of free tuition at a flagship university. The intervention did not increase aid: rather, students were guaranteed before application the same grant aid that they would qualify for in expectation after admission. The offer substantially increased application (68 percent vs 26 percent) and enrollment rates (27 percent vs 12 percent). The results suggest that uncertainty, present bias, and loss aversion loom large in students’ college decisions.

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Document Object Identifier (DOI): 10.3386/w25349

 
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