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The Effects of Financial Aid Offers on Economic Outcomes: New Experimental Evidence from the Fund for Wisconsin Scholars Grant

Last registered on December 28, 2020

Pre-Trial

Trial Information

General Information

Title
The Effects of Financial Aid Offers on Economic Outcomes: New Experimental Evidence from the Fund for Wisconsin Scholars Grant
RCT ID
AEARCTR-0003306
Initial registration date
September 27, 2018

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published
September 28, 2018, 1:38 AM EDT

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Last updated
December 28, 2020, 3:15 PM EST

Last updated is the most recent time when changes to the trial's registration were published.

Locations

Primary Investigator

Affiliation
University of Wisconsin-Madison

Other Primary Investigator(s)

PI Affiliation
University of Oklahoma
PI Affiliation
University of Wisconsin-Madison

Additional Trial Information

Status
On going
Start date
2008-09-01
End date
2022-01-15
Secondary IDs
Abstract
The Fund for Wisconsin Scholars (FFWS) was established in 2007 with a founding gift of $175 million from John and Tashia Morgridge. The goal of the FFWS is to increase postsecondary access for economically disadvantaged students in Wisconsin, which the FFWS works to achieve by providing need-based grants. A student is eligible to receive one of these grants if she graduated from a Wisconsin high school, attends a public college or university in the state (including technical colleges) full time, and is eligible to receive a federal Pell Grant. Students do not directly apply for the FFWS grant. Rather, each public institution in Wisconsin uses internal data to identify the set of eligible students enrolled at the school. Each institution then sends its list of eligible students to the Wisconsin Higher Educational Aids Board (HEAB), which randomly assigns students to receive an FFWS offer. Students selected for the FFWS offer receive an award letter that they are instructed to sign and return to the FFWS in order to access the funds—the grants are $1,800/year for students enrolled in two-year institutions and $4,000/year for students at four-year schools. Students not selected for the award are typically unaware they were even eligible. Students who follow the instructions in the award letter have their FFWS automatically renewed—up to a maximum of ten semesters—as long as they meet the initial eligibility criteria and make satisfactory academic progress. The first FFWS grants were awarded in the 2008-09 school year—about 1,200 offers were made that year—and approximately 1,200 offers have been made each subsequent year, allowing us to analyze the effects of the award across several recipient cohorts. As the organization believes program implementation improved after the first cohort, we will only be analyzing the subsequent cohorts. Our outcomes will include employment, wages, and the receipt of means-tested benefits such as SNAP and TANF.
External Link(s)

Registration Citation

Citation
Carlson, Deven, Alex Schmidt and Barbara Wolfe. 2020. "The Effects of Financial Aid Offers on Economic Outcomes: New Experimental Evidence from the Fund for Wisconsin Scholars Grant." AEA RCT Registry. December 28. https://doi.org/10.1257/rct.3306-1.2
Former Citation
Carlson, Deven, Alex Schmidt and Barbara Wolfe. 2020. "The Effects of Financial Aid Offers on Economic Outcomes: New Experimental Evidence from the Fund for Wisconsin Scholars Grant." AEA RCT Registry. December 28. https://www.socialscienceregistry.org/trials/3306/history/209215
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Experimental Details

Interventions

Intervention(s)
The intervention is an offer of need-based financial aid for low-income Wisconsin college students. We say the intervention is a financial aid offer, and not the aid itself, because 1) not all students accepted the offer, and 2) the grant is designed to satisfy unmet need and not to replace other forms of grant aid (i.e., non-loan aid). Thus, a student will not receive FFWS grant money if her need it completely met by other forms of grant aid in a given semester, and the amount actually received varies across students.

The size of the grant depends on both the cohort and the type of school where a student is enrolled. Students in technical and two-year colleges can receive up to $1,800 per academic year. Early in the program, four-year students could receive up to $3,500 per academic year. Recently, that amount increased to $4,000 (in the 2015-16 school year). Students can continue to receive these funds for up to ten semesters as long as they continue to meet eligibility requirements (see below).
Intervention Start Date
2008-09-01
Intervention End Date
2022-01-15

Primary Outcomes

Primary Outcomes (end points)
a) Employment in Wisconsin

b) Wages in Wisconsin
Primary Outcomes (explanation)
a) Employment in Wisconsin: measured as having wages in Wisconsin in a given academic year (third quarter through second quarter the following year), as reported by Wisconsin's Unemployment Insurance Database. Individuals with unreported wages will be coded as unemployed (i.e., “1” represents employed and “0” represents unemployed).

b) Wages in Wisconsin: measured as wages in Wisconsin in a given academic year (third quarter through second quarter the following year), as reported by Wisconsin's Unemployment Insurance Database. Individuals with unreported wages will be coded as zero wages (in Wisconsin). We will not transform wages for this analysis.

Secondary Outcomes

Secondary Outcomes (end points)
a) Any Supplemental Nutrition Assistance Program (SNAP) funds received in Wisconsin

b) Any Temporary Assistance for Needy Families (TANF) funds received in Wisconsin

c) Amount of Temporary Assistance for Needy Families (TANF) funds received in Wisconsin

d) Any Unemployment Insurance (UI) benefits received in Wisconsin

e) Amount of Unemployment Insurance (UI) benefits received in Wisconsin

f) Quarterly wages/employment/means-tested benefits
Secondary Outcomes (explanation)
a) Any Supplemental Nutrition Assistance Program (SNAP) funds received in Wisconsin: measured as having any SNAP receipt in Wisconsin in a given academic year (September through August the following year), as reported in the MSPF. Reported SNAP receipt will be coded as a “1,” while a “0” will represent no SNAP receipt.

b) Any Temporary Assistance for Needy Families (TANF) funds received in Wisconsin: measured as having any TANF receipt in Wisconsin in a given academic year (September through August the following year), as reported in the MSPF. Reported TANF receipt will be coded as a “1,” while a “0” will represent no reported TANF receipt.

c) Amount of Temporary Assistance for Needy Families (TANF) funds received in Wisconsin: measured as amount of TANF funds received in Wisconsin in a given academic year (September through August the following year), as reported in the MSPF. Unreported TANF receipt will be coded as zeros. We will not transform TANF receipt for this analysis.

d) Any Unemployment Insurance (UI) benefits received in Wisconsin: measured as having any UI benefits receipt in Wisconsin in a given academic year (September through August the following year), as reported in the MSPF. Reported UI benefits receipt will be coded as a “1,” while a “0” will represent no UI receipt.

e) Amount of Unemployment Insurance (UI) benefits received in Wisconsin: measured as total UI benefits received in Wisconsin in a given academic year (September through august the following year), as reported in the MSPF. Unreported UI receipt will be coded as zeros. We will not transform UI receipt for this analysis.

f) Quarterly wages/employment/means-tested benefits: In addition to the above annual measures, we will also create quarterly versions of the outcome variables. Wage/employment records are quarterly by nature, and will be coded as described above. The means-tested benefits records are monthly by nature, so these outcomes will be broken into three-month increments to create quarterly versions. The coding decisions will remain the same as described above.

Experimental Design

Experimental Design
At the beginning of each school year, University of Wisconsin System (UWS) colleges and Wisconsin Technical College System (WTCS) colleges submit a list of newly enrolled students who are eligible to receive the grant to the Higher Educational Aids Board (HEAB). HEAB compiles all of the eligible four-year students into one pool and all of the eligible two-year students (i.e., two-year UWS students and WTCS students) into another and conducts a blocked randomization (see the eligibility requirements below). HEAB randomly selects around 1,100 to 1,300 total students for the treatment condition with the goal that 500 students in each randomization block will accept the award (see Table 1 of the pre-analysis plan for the selection and take-up rates by cohort). The treatment group are those eligible students who were randomly selected for the award (regardless of whether they accepted), while the control group are those eligible students who were not randomly selected. We note that eligible students are identified on the basis of administrative data alone; students need not take any active steps to enter into consideration.

The requirements for initial grant eligibility are the following (from the FFWS website):
a) be a resident of Wisconsin
b) have been a full-time, resident student in a Wisconsin public school for four semesters prior to graduation
c) have received a Wisconsin public high school diploma or HSED within the past three years
d) be under the age of 21 years at initial eligibility
e) be in a first degree program unless moving from an associate degree to a bachelor’s program
f) be enrolled full time in a UW System university based in Wisconsin
g) be a PELL recipient

To maintain eligibility for the grant (for up to ten semesters) students in a given semester must meet the following criteria (from the FFWS website):
a) student’s college enrollment at a UW college or university or WTCS (Wisconsin Technical College System) college is full time
b) enrollment does not exceed six semesters in a WTCS or a UW college [i.e., two-year UW colleges]
c) adequate academic progress is being made with degree completion expected
d) student’s school continues to follow the grant process
e) FAFSA is completed.

Students receive funds in that semester only if they have unmet need (i.e., financial need minus grant aid offers).

One notable feature of the program is that students maintain grant eligibility if they transfer to another eligible school (i.e., an eligible technical college or University of Wisconsin two-/four-year college).
Experimental Design Details
Randomization Method
At the beginning of each school year, University of Wisconsin System (UWS) colleges and Wisconsin Technical College System (WTCS) colleges submit a list of newly enrolled students who are eligible to receive the grant to the Higher Educational Aids Board (HEAB). HEAB compiles all of the eligible four-year students into one pool and all of the eligible two-year students (i.e., two-year UWS students and WTCS students) into another and conducts a blocked randomization (see the eligibility requirements above). HEAB randomly selects around 1,100 to 1,300 total students for the treatment condition with the goal that 500 students in each randomization block will accept the award (see Table 1 of the pre-analysis plan for the selection and take-up rates by cohort). The treatment group are those eligible students who were randomly selected for the award (regardless of whether they accepted), while the control group are those eligible students who were not randomly selected. We note that eligible students are identified on the basis of administrative data alone; students need not take any active steps to enter into consideration.
Randomization Unit
Individual students were randomized to treatment each year within (i.e., blocked by) type of initial enrollment (i.e., four-year college or two-year college).
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
Two randomization clusters (students initially enrolled in four-year colleges and two-year colleges) in each of the eight cohorts under study.
Sample size: planned number of observations
54,021 students (i.e., those students eligible to be randomized in the 2009-10 through 2016-17 cohorts).
Sample size (or number of clusters) by treatment arms
9,387 students were randomized to treatment (i.e., FFWS offer) and 44,634 students were randomized to control (i.e., no FFWS offer).
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Figures 1-2 in the appendix of the pre-analysis plan show minimum detectable effect size (MDES) calculations for our primary analyses, setting power at 80 percent and using a 5 percent significance threshold. We calculated MDES with the PowerUpR package in R, using the “Two-Level Blocked (Constant Treatment Effect) Individual-Level Random Assignment Design, Treatment at Level 1” (mdes.bira2c1) function (Bulus et al. 2018). The results suggest minimum detectable effect sizes in the range of 0.04 to 0.13 standard deviations for wages and employment, depending on the time point and amount of variation explained by the covariates. See the pre-analysis plan for more information on these estimates.
IRB

Institutional Review Boards (IRBs)

IRB Name
University of Wisconsin-Madison Education and Social/Behavioral Science Institutional Review Board
IRB Approval Date
2018-03-13
IRB Approval Number
2017-1206
Analysis Plan

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Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
No
Data Collection Complete
No
Data Publication

Data Publication

Is public data available?
No

Program Files

Program Files
No
Reports, Papers & Other Materials

Relevant Paper(s)

Abstract
We experimentally estimate the effects of a need-based financial aid offer on students’ annual in-state employment and earnings up to eight years after the initial offer. For students in four-year universities, we show the aid offer to reduce employment and earnings throughout the period we study but provide evidence of increased effort on coursework during students in-college years. We examine the role of outstate migration and reduced loan debt in generating the negative effects in students’ post-college years. We find no significant effects of the aid offer on the labor market outcomes of individuals in two-year institutions.
Citation
The Effects of Need-Based Financial Aid on Employment and Earnings: Experimental Evidence from the Fund for Wisconsin Scholars

Reports & Other Materials

Description
The Effects of Need-Based Financial Aid on Employment and Earnings: Experimental Evidence from the Fund for Wisconsin Scholars.
Citation
Deven Carlson, Alex Schmidt, Sarah Souders and Barbara Wolfe, Published online before print August 05, 2022, 0121-11458R1, Journal of Human Resources Vol. 58, Issue 6 1 Nov 2023