New MLDS Research Report: The Effects of Need-based Grant Aid on Long-Term College and Workforce Out

Maryland Longitudinal Data System Center Update -- New Research Report

The Effects of Need-based Grant Aid on Long-Term College and Workforce Outcomes

This report examines Maryland’s Howard P. Rawlings Educational Assistance (EA) grant and uses the fact that eligibility for the grant is determined by a definite threshold of financial need as a natural experiment to estimate a causal effect of receiving the EA Grant for bachelor’s degree-seeking students. Using data from the Maryland Longitudinal Data System on students who enter four year programs from the 2008-2009 to 2015-2016 academic years, this report finds that EA Grant receipt increases the likelihood that an entering student will persist through the fourth year, with similar sized effects for graduation within five years, and positive effects on workforce wages after graduation. The report also shows that while this positive effect does not appear to vary by other demographic characteristics, it does provide several pieces of evidence that the effects are larger for lower-income students. Additionally, this report also finds that institutions reduce the amount of institutional grant aid awarded to students and that students take out smaller loans amounts in response to an EA Grant. Policy implications for need-based grant aid programs and directions for future research are discussed.

You can find this report (as well as many others) on our website here: https://mldscenter.maryland.gov/ResearchReports.html

The MLDS is based at the University of Maryland School of Social Work.

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