Exploring the Relationship between State Financial Aid Policy and Postsecondary Enrollment Choices: A Focus on Income and Race Differences

Abstract

This study explores the relationship between state financial aid policies and postsecondary enrollment for high school graduates (or equivalent diploma holders). Utilizing an event history modeling for a nationally representative sample from the National Education Longitudinal Study (NELS:88/2000) in addition to state-level policy variables, this study examined how state aid policies differentially affect students’ postsecondary enrollment choices depending on their family income and race/ethnicity between the years 1992 through 2000. The findings demonstrate that there is a clear and consistent gap in college enrollment for students who are from different income and race/ethnic groups, and that changes in state financial aid policy are significantly related with the type of institutions a student attends across income and racial groups. The study findings have important implications for state aid policy as well as future research on the role of public financial aid policy in college choice of students from different income and racial/ethnic backgrounds.