Nicholas W. Hillman

Evaluating the Impacts of "New" Performance Funding in Higher Education.

In 2007, Washington adopted the Student Achievement Initiative, a statewide performance accountability system designed to improve retention rates and degree productivity among community colleges. Using difference-in-differences analysis, we found that the policy change has had little immediate effect on retention rates or associate’s degree productivity. However, community colleges produced more short-term certificates after the policy reform. These results are robust across many alternative comparison groups. Considering that certificates yield less value in the labor market than associate’s degrees but are easier for colleges to produce, we discuss the unintended consequences of rewarding colleges based on the number of credentials they produce.

Performance Funding in Higher Education: Do Financial Incentives Impact College Completions?.

In 2000, the Pennsylvania State System of Higher Education introduced a performance-based funding model aimed at increasing degree productivity among the state’s public colleges. This study examines how the new policy affected undergraduate degree completions. Using a difference-in-differences estimation strategy, results suggest the policy has not systematically increased degree completions within the state. With limited evidence of the policy’s effect, we conclude that this was an ineffective funding model in terms of its ability to increase college completions. Although we find modest impacts when compared against colleges in neighboring states, these impacts disappear when matched against similar colleges from other states.

College on Credit: A Multilevel Analysis of Student Loan Default

This study updates and expands the literature on student loan default. By applying multilevel regression to the Beginning Postsecondary Students survey, four key findings emerge. First, attending proprietary institutions is strongly associated with default, even after accounting for students’ socioeconomic and academic backgrounds. Second, cumulative loan debt has a non-linear relationship to defaulting. Third, minoritized and students from low-income families default at disproportionately high rates; and fourth, unemployment and degree completion are strongly associated with greater default rates. These findings counter the argument that default is a “preexisting condition,” and the discussion is framed around implications for federal financial aid policy.

The Impact of State Appropriations and Grants on Access to Higher Education and Outmigration.

The question of how states can best use financial policy to achieve their goals is very important for many higher education stakeholders. In this study, the authors use panel data for all 50 states over a 20-year period to examine how state appropriations, need-based grants, and merit-based grants affect student enrollment in college and whether students migrate to other states for their postsecondary education. We find that increases within states in both appropriations and merit-based grants, but not need-based grants, lead to gains in postsecondary enrollment rates, and that merit-based grants are most effective at reducing outmigration for postsecondary education.

Geography of College Opportunity The Case of Education Deserts

When students choose where to attend college, they often stay in close proximity to home and work. Much of the college choice literature, however, does not engage with the importance of geography in shaping educational destinations. Using county and commuting zone data from various federal sources, this study finds that the number of local colleges varies along lines of race and class. Communities with large Hispanic populations and low educational attainment have the fewest alternatives nearby, while White and Asian communities tend to have more. These can result in education deserts, or places where opportunities richly available for some communities are rare (or even nonexistent) in others.

Financing College Opportunity Factors Influencing State Spending on Student Financial Aid and Campus Appropriations, 1990 through 2010

Some states invest relatively heavily in financial aid programs that benefit lower-income citizens, while other states concentrate their investment in programs that benefit students from higher-income backgrounds. States also vary in their levels of direct appropriations to campuses, a form of public subsidy that has long been viewed as benefitting middle-income citizens. What factors influence states to allocate higher education subsidies in a more or a less redistributive manner? This article reports on a study that examined sources of variation in state spending on need-based aid, merit-based aid, and appropriations over the period 1990–2010. Findings document relationships among spending patterns and structural and political conditions of states, indicating a “trade-off” between spending on merit- and need-based aid; as states invest more in the former, they reduce spending on the latter. We also show that the presence of a Republican governor and the strength of Republican representation in statehouses each is associated with increased state spending on need-based financial aid. Our results further show that increased wealth is positively associated with state spending on merit-based financial aid programs and state appropriations for higher education, but not need-based financial aid. We also find distinctive patterns of state support for higher education depending on the degree of centralization of a state’s governance arrangement for higher education; namely, the presence of a highly centralized structure is associated with decreased spending on merit-based aid programs and increased state appropriations to colleges and universities.

Economic Diversity in Elite Higher Education: Do No-Loan Programs Impact Pell Enrollments?

Several wealthy colleges and universities have recently begun removing all loans from low-income students’ financial aid packages. This article reports on a study that found that the introduction of “no-loan” policies has positively impacted low-income enrollments, suggesting that this aid strategy may be an effective, though limited, way of increasing economic diversity on campus.

Cohort Default Rates Predicting the Probability of Federal Sanctions

This study examines the institutional factors associated with student loan default. When a college has more than 30% of its students default on their loans, then the institution faces federal sanctions that could make them ineligible from participating in the federal student loan program. Using Integrated Postsecondary Education Data System (IPEDS) data from 2008 (N = 4,488), and applying logistic regression, this study finds for-profit colleges, those accredited by vocational education programs, and those serving diverse student bodies are most at risk of federal sanctions. It concludes that accreditation reform and improving graduation rates could be long-term solutions to addressing the default problem.

FINANCIAL AID'S ROLE IN MEETING STATE COLLEGE COMPLETION GOALS

This brief utilizes the most recent and rigorous financial aid research to inform state higher education leaders about innovative and effective financial aid practices. By simplifying aid eligibility requirements, improving the aid application process, and engaging in early awareness efforts, states could improve the effectiveness of existing aid programs. Additionally, by targeting aid in ways that encourage college completion, more students (particularly those who are most constrained by finances) will improve their chances of earning postsecondary degrees. In recent years, several states have adopted goals of greatly increasing educational attainment levels, so we argue that innovative financial aid policy reform is one of the necessary steps toward meeting these goals. This brief can inform ongoing policy negotiations between state commissioners of higher education, state education task forces, and education and workforce legislative committees.

The Ethical Dimensions of Awarding Financial Aid.

In countries charging tuition fees, and those that are considering adopting tuition fee policies, recent economic conditions are making education less affordable and accessible for students. To combat these challenges, nations, state/regional governments, and universities are experimenting with financial aid programmes by providing non-repayable grants and scholarships to reduce price barriers. This paper synthesizes the underlying political and ethical motivations driving these financial aid policies. Aid providers interested in pursuing market prestige may prioritize “merit-based” aid policies that are influenced by neoliberal norms; alternatively, those interested in equalizing opportunities for price-sensitive students may prioritize policies guided by egalitarian values related to social justice. The political economy of aiding students has profound effects on educational opportunity, so this paper offers policymakers, researchers, and practitioners a model from which to frame these cross-cutting and timely ethical issues.