The effect of price shocks on undocumented students' college attainment and completion

Abstract

We examine the effect of a price shock caused by the temporary removal of in-state tuition benefits on the attainment of undocumented immigrants enrolled in a large urban college system using a difference-in-differences identification strategy. The 113% one-semester tuition increase led to an 8% decrease in reenrollment and a similarly-sized reduction in credit accumulation. For students who had been enrolled at least a year prior to the policy change, the price hike caused them to leave college sooner but did not increase their probability of dropping out. Conversely, students who entered college the semester prior to the policy change experienced lasting reductions in attainment, including a 22% decrease in degree receipt compared to students with more college experience at the time of the price shock. Our results suggest that public subsidies that lower college prices can increase degree completion among resource-constrained students who have made the decision to enroll in college, with larger benefits accruing to those who are early in their college careers.