The impact of financial aid on student departure and graduation: propensity score matching

Abstract

The purpose of the study was to evaluate the impact of the financial aid programme aimed at discounting tuition fees at one of Venezuela’s first private universities on early and late student departure, both from the degree programme and the institution, as well as on graduation. The propensity score matching was used by calculating the average treatment effect estimator under parametric and non-parametric methodologies such as nearest neighbours, Kernel, or local linear regression. The results indicate that although there is evidence of the programme exerting a positive impact on early student departure to a greater extent (reductions between 8% and 15%), the impact tends to be considerably less when it comes to reducing late student departure (between 1% and 5%), and it had no impact on graduation.