ERIC Number: EJ769750
Record Type: Journal
Publication Date: 2007-May-25
Pages: 1
Abstractor: ERIC
ISBN: N/A
ISSN: ISSN-0009-5982
EISSN: N/A
Student-Aid Offers May Be Too Generous, Study Suggests
Glenn, David
Chronicle of Higher Education, v53 n38 pA47 May 2007
Colleges may frequently be overspending by offering students larger financial-aid offers than are actually necessary to entice them to enroll, according to a working paper released in May by three economists. In a detailed examination of the admissions practices of two selective private colleges, the economists found that the colleges generally made larger financial-aid offers to students who were already highly likely to attend. That practice contradicts scholars' typical idealized models of financial aid. The standard model assumes that financial-aid offers are incentives to enroll and that colleges will direct those incentives at "marginal" students--that is, students who might easily decide to attend a different institution. In this article, Mr. Michael J. Rizzo, a senior economist at the American Institute for Economic Research, talks about "The Cost of Crafting a Class: (In)Efficient Financial Aid Allocation at Two Private Colleges." He wrote the paper with Robert E. Martin, a professor of economics at Centre College, and Randy Campbell, an assistant professor of economics at Mississippi State University. The authors' suggestion that colleges should trim some of their financial-aid offers might sound vaguely heartless--and might seem reminiscent of "enrollment management" strategies that have been heavily criticized for apparently allowing colleges to chase prestige at the expense of low-income students. They argue that if the two colleges in their study spent their financial-aid budgets more efficiently, they could free up resources for other goals, including offering more need-based aid, diversifying their student bodies, or hiring more faculty members.
Descriptors: Student Financial Aid, Private Colleges, Enrollment Management, Resource Allocation, Incentives, Educational Research
Chronicle of Higher Education. 1255 23rd Street NW Suite 700, Washington, DC 20037. Tel: 800-728-2803; e-mail: circulation@chronicle.com; Web site: http://chronicle.com/
Publication Type: Journal Articles; Reports - Descriptive
Education Level: Higher Education
Audience: N/A
Language: English
Sponsor: N/A
Authoring Institution: N/A
Grant or Contract Numbers: N/A