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Research ArticleArticle

The Consequences of Performance Standards in Need-Based Aid

Evidence from Community Colleges

Judith Scott-Clayton and Lauren Schudde
Journal of Human Resources, October 2020, 55 (4) 1105-1136; DOI: https://doi.org/10.3368/jhr.55.4.0717-8961R2
Judith Scott-Clayton
Judith Scott-Clayton is an Associate Professor of Economics & Education at Teachers College, Columbia University. Lauren Schudde is an Assistant Professor of Educational Leadership and Policy at The University of Texas at Austin.
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Lauren Schudde
Judith Scott-Clayton is an Associate Professor of Economics & Education at Teachers College, Columbia University. Lauren Schudde is an Assistant Professor of Educational Leadership and Policy at The University of Texas at Austin.
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Abstract

Even need-based financial aid programs typically require recipients to meet Satisfactory Academic Progress (SAP) requirements. Using regression discontinuity and difference-in-difference designs, we examine the consequences of failing SAP for community college entrants in one state. We find heterogeneous academic effects in the short term, but, after six years, negative effects on academic and labor market outcomes dominate. Declines in credits attempted are two to three times as large as declines in credits earned, suggesting that SAP may increase aid efficiency. But students themselves are worse off, and the policy exacerbates inequality by pushing out low-income students faster than their higher-income peers.

JEL Classification
  • I22
  • I23
  • Received July 2017.
  • Accepted January 2019.
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Journal of Human Resources: 55 (4)
Journal of Human Resources
Vol. 55, Issue 4
2 Oct 2020
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The Consequences of Performance Standards in Need-Based Aid
Judith Scott-Clayton, Lauren Schudde
Journal of Human Resources Oct 2020, 55 (4) 1105-1136; DOI: 10.3368/jhr.55.4.0717-8961R2

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The Consequences of Performance Standards in Need-Based Aid
Judith Scott-Clayton, Lauren Schudde
Journal of Human Resources Oct 2020, 55 (4) 1105-1136; DOI: 10.3368/jhr.55.4.0717-8961R2
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    • Abstract
    • I. Introduction
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Keywords

  • I22
  • I23
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