What Student Aid Research Shows

With the renewal of the Higher Education Act in the offing and the second act of a president who focused heavily on higher education in his first term now under way, the hunt for big or new (or at least helpful) ideas about student aid policy is in full swing — and the stakes are high. Everybody and their uncle — from the Bill & Melinda Gates Foundation to the College Board — is soliciting or producing recommendations about reimagining federal financial aid, especially the bedrock Pell Grant Program.

And given the likelihood that, for the foreseeable future, federal financial aid funding may be a zero-sum game, with overall funding levels flat or falling creating the prospect of winners and losers, the stakes are high as experts assess what works and what doesn't.

On Monday, two well-regarded scholars of federal financial aid policy took a look backward for ideas about how to move ahead. In a paper published by the National Bureau of Economic Research (abstract here), Susan Dynarski of the University of Michigan and Judith Scott-Clayton of Columbia University's Teachers College scan 50 years of financial aid practice and research to "review what is known and what is not known about how well various student aid programs work," they write.

After outlining the history of financial aid and explaining the difficulty of evaluating which policies are effective and which aren't — mostly surrounding the fact that it is hard to undertake, or even mimic, the sort of randomized experiments that are the gold standard in most kinds of research — they nonetheless offer four "major lessons that can be taken from the research on financial aid effectiveness, drawing primarily on experimental and quasi-experimental analyses."

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