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Lottery Scholarships: Lessons Learned


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    1. Lottery Scholarships: Lessons Learned William R. Doyle Vanderbilt University

    2. Lottery Scholarships: Lessons Learned Effect of lottery scholarships on: • Attendance rates • Student migration • Adult migration • Persistence and Completion Other Effects: • Unintended Consequences

    3. Lottery Scholarships: Characteristics Source: Heller, 2004

    4. States With Merit Aid Programs, 1994

    5. States With Merit Aid Programs, 1998

    6. States With Merit Aid Programs, 2002

    7. States With Merit Aid Programs, 2005

    8. Shift in State-Based Financial Aid

    9. Effect of Merit Scholarships on Participation • Dynarski, 2000 • Looked at attendance rates of young people in Georgia and other nearby states before and after implementation of HOPE • Found that HOPE increased the college participation rate of 18-19 year olds by 7.0 to 7.9 percentage points

    10. Effect of Merit Scholarships on Participation Dynarski, 2000: “Due to key differences between the federal and Georgia programs, these estimates should be treated as a generous upper bound . . .”

    11. Effect of Merit Scholarships on Participation Dynarski, 2000: “Further, the evidence suggests that Georgia’s program has widened the gap in college attendance between blacks and whites and between those from low- and high-income families.”

    12. Effect of Merit Scholarships on Participation Cornwell and Mustard 2003 “We estimate that the scholarship increased the overall freshmen enrollment rate by 6.9 percentage points with the gains concentrated in 4-year schools.”

    13. Effect of Merit Scholarships on Participation Binder and Ganderton 2002 “Despite its generous terms, NM Success has not increased the overall college enrollment rate among high school graduates.”

    14. Effect of Merit Scholarships on Participation • Many studies find that students are likely to shift from two-year to four-year institutions • Effect of lower prices, different incentives are posited to be possible causes

    15. Effect of Merit Scholarships on Student Migration Dynarski 2000 • HOPE decreases the number of Georgia students attending out of state, from 5,000 to 4,500 • Effect is particularly strong at institutions in border states with typically large freshmen enrollments from Georgia

    16. Effect of Merit Scholarships on Student Migration Cornwell and Mustard 2003 • Utilize a slightly different methodology than Dynarski • Results are very similar: HOPE has encouraged more students to attend higher education in-state.

    17. Effect of Merit Aid Scholarships on Adult Migration • No evidence from the literature yet exists on this question • But: • More highly educated people are more mobile • Mobility among the educated is driven primarily by job market concerns

    18. Effect of Merit Aid on Persistence and Completion Henry, Rubenstein and Bugler 2004 • Looked at similar students above and below the “borderline” for HOPE • Students with HOPE: • Had more credit hours • Had higher GPA’s • Were more likely to graduate

    19. Effect of Merit Aid on Persistence and Completion Binder and Ganderton 2002 • Students with Success scholarships (NM) were more likely to drop out • Students with Success scholarships were also more likely to reduce credit hours and withdraw from courses

    20. Merit Aid Programs: Unintended Consequences • Grade Inflation: Bradbury and Campbell (2003) find that grade inflation did occur in Georgia high schools after HOPE was implemented • Lexus effect: Substition of scholarship dollars for consumption does occur (Cornwell and Mustard, 2002) • Tuition, Room and Board: Some evidence that college cost rise as a result of these scholarships (Long, 2003).

    21. Who Adopts Merit Aid Programs? • Factors associated with adoption • Low SAT/ACT Scores • Low outmigration • Low educational attainment • Higher levels of income • No relationship found between adoption and: • Political characteristics • Diffusion Source: Doyle, 2006

    22. A Decade of Merit Aid: The Summary • Participation: scholarships increase enrollment, but effect is different by state. • Participation: scholarships tend to shift student from two year to four year institutions • Migration: scholarships reduce out-of-state migration to attend college • Migration: no evidence on adult migration • Persistence: Evidence is mixed, no clear findings

    23. Georgia: HOPE Recipients, 1993: 2002 Source: Georgia Student Finance Commission 2004

    24. Georgia: HOPE Awards, 1993-2002(In Millions) Source: Georgia Student Finance Commission 2004

    25. Georgia: Lottery Proceeds, 1992-2002

    26. Florida: Bright Futures Recipients Source: CEPRI, 2003

    27. Florida: Bright Futures Awards Source: CEPRI, 2003

    28. Florida: Lottery Proceeds, 1992-2002

    29. West Virginia: Lottery Proceeds, 1992-2002

    30. Issues for the Future • Long term academic effects: • Retention/completion • Academic major • High school performance • Effects on need based aid • Squeezing out of need-based programs • Need within merit/ Merit within need programs