RT Journal Article
SR Electronic
T1 The Consequences of Performance Standards in Need Based Aid: Evidence From Community Colleges
JF Journal of Human Resources
JO J Hum Resour
FD University of Wisconsin Press
SP 0717-8961r2
DO 10.3368/jhr.55.4.0717-8961R2
A1 Judith Scott-Clayton
A1 Lauren Schudde
YR 2019
UL http://jhr.uwpress.org/content/early/2019/03/05/jhr.55.4.0717-8961R2.abstract
AB Even need-based financial aid programs typically require recipients to meet Satisfactory Academic Progress (SAP) requirements. We examine the consequences of failing SAP for community college entrants in one state, using regression discontinuity and difference-in-difference designs. 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 2–3 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.