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ERIC Number: ED501555
Record Type: Non-Journal
Publication Date: 2008-Apr
Pages: 52
Abstractor: ERIC
What is Known about the Impact of Financial Aid? Implications for Policy. An NCPR Working Paper
Long, Bridget Terry
National Center for Postsecondary Research
Years of research support the notion that financial aid can influence students' postsecondary decisions, but questions remain about the best ways to design and implement such programs and policies. This paper serves as a discussion of the research literature on the effectiveness of financial aid with special attention to its implications for policy. As such, the goal of this paper is to address issues central to today's debates about how to improve college access and affordability while encouraging researchers to continue to advance the line of inquiry. Following an introduction, Section 2 of this paper gives a summary of the costs of higher education as well as an overview of current financial aid policy and the degree to which students' financial needs are currently being met. Section 3 discusses what families know about financial aid and the role of information in the federal application process for aid. Sections 4 and 5 review the long literature on the effects of financial aid on student behavior by examining the role of grants, loans, and other forms of financial aid. Section 6 focuses on the behavior of colleges and universities in reaction to financial aid policy. It addresses concerns about the Bennett Hypothesis, the notion that colleges raise their prices when aid becomes more generous. Finally, Section 7 concludes by summarizing the main points. It also discusses the growing debate about the degree to which financial aid can address the barriers to college access and success. The paper concludes by outlining several major issues that need additional research and by discussing how the research could be made more policy relevant. [This working paper was produced by the National Center for Postsecondary Research.]
National Center for Postsecondary Research. Teachers College, Columbia University, Box 174, 525 West 120th Street, New York, NY 10027. Tel: 212-678-3091; Fax: 212-678-3699; e-mail:; Web site:
Publication Type: Information Analyses
Education Level: Higher Education
Audience: N/A
Language: English
Sponsor: Department of Education, Washington, DC.
Authoring Institution: N/A
IES Funded: Yes
Grant or Contract Numbers: R305A060010