Freeman Spogli Institute for International Studies Program on Energy and Sustainable Development Stanford University


Research at PESD


IET/CORE "Cal Grant" Scholarship Program: Does Providing an Early Commitment of Financial Aid Make a Difference?

REAP Project
Ongoing

Problem

When all expenses are added up, university costs in China can reach 10,000 to 12,000 yuan per year. To pay for four years of college, a poor family living at the poverty line must borrow and save more than 60 years of per capita income. While there is increasingly more aid and scholarships available today than there were five years ago, it is not true—far from it—that whoever needs financial aid can receive it.  Making matters worse, even while there are some programs to help poor, rural students with their funding needs, rural students do not know about them and, thus, often are unable to take advantage of them.

A further complication is that in most universities first year students are not awarded scholarships until the second semester, meaning students can not get access to aid until they enter the university. This not only means families have to find some way to finance the first year of college, it also means that there is a lot of uncertainty. When students are making their choices of where to go to college and what to major in, they do not know their financial aid package and have very little information on the prospects. The result: poor, rural students may make decisions in this environment of uncertainty that might be suboptimal in terms of their college/major choice. In other words, poor, rural students may distort their college choice and choose to go to a normal or military school where the cost is lower even though they are not interested in a career in education or the military.

Attending university is a huge financial burden for many of these students

Goals

Our goal is to understand whether need-based aid, provided to high school students in advance of the first year of university, can help them overcome the financial uncertainties and barriers inherent in their choices regarding higher education. That is, do poor students with a commitment of financial aid for the first year of university make different choices regarding the institutions they officially list as wanting to attend?

A second goal is to see whether offering financial aid to poor students in advance of the university entrance exam incentivizes improved performance and a higher success rate. 

Approach

Treatment

Our research approach is to use a randomized control trial. The program intervention that forms the basis for the control trial is to provide an offer of a first-year university scholarship to 248 randomly selected seniors (third-year high school students), conditional on the student passing the university entrance exam to gain entrance to a level-1 (yiben) or level-2 (erben) university. We first randomly selected 8 counties in Shaanxi Province in which to run the experiment. There were 10 high schools in the 8 counties, from which we randomly selected 1 advanced third-year class and 1 normal third-year class at each high school, for a total of 20 classes. We surveyed every student in the 20 classes (1200 students in total) and then ranked them from poorest to wealthiest, based on their family’s household assets. We randomly picked the 248 “awardees” from among the 600 senior year students who we ranked as being the poorest across the 20 classes.    

REAP analyzed data collected on the randomly selected award winners and non-winners and determined that, as a whole, each group was identical on average in observable characteristics (other than receiving the scholarship award, or treatment). In order to explore whether different timing and different amounts of the first-year tuition awards lead to different impacts, the students were randomly assigned to different treatment sub-groups, as follows:

  • need-based scholarship for first-year—full tuition; notified early: 61 students were randomly selected by REAP for a 5000 yuan scholarship and notified in March, 2008  (more than three months before the university entrance exam and the following deadline for submitting their official choices/application for universities and majors)
  • need-based scholarship for first-year—half tuition; notified early: 62 students were randomly selected by REAP for a 2500 yuan scholarship and notified in March, 2008  (more than three months before the university entrance exam and the following deadline for submitting their official choices/application (for universities and majors)
  • need-based scholarship for first-year—full tuition: 63 students were randomly selected by REAP for a 5000 yuan scholarship and notified in June, 2008  [right after they took the university entrance exam, several days before they had to submit their official choices/application (zhi yuan) for universities and majors)
  • need-based scholarship for first-year—half tuition: 65 students were randomly selected by REAP for a 2500 yuan scholarship and notified in June, 2008  [right after they took the university entrance exam, several days before they had to submit their official choices/application (zhi yuan) for universities and majors).

Control

REAP is also following the 352 poor, third-year students who were considered, but not selected for a scholarship.

Implementation

To read a detailed report on REAP’s implementation of the IET/CORE Scholarship Program, please see Implementation Report March 2008 and the follow up Implementation Report July 2008.

Department fair where students can learn more about different majors offered at a university. Will their decision be affected by the amount and timing of financial aid? 

Evaluation

REAP is now following up with the high schools and collecting the university and major choice forms (zhi yuan) for the treatment and control groups to evaluate the impacts of the scholarship program, and whether the impacts varied due to the different amounts and timing of the awards. The post-treatment impacts on poor, rural students that REAP is investigating include:

  • choice of university to attend;
  • choice of major to pursue;
  • whether those notified early changed their time allocation in the run-up to the university entrance exam;
  • whether those notified early performed differently on the university entrance exam;
  • do fewer award winners repeat the third-year of high school and the exam

REAP is also using the baseline information collected together with the post-treatment data to understand how the impacts differed for students when grouped based on observable differences (i.e., if from northern Shaanxi, if female, if a science student, etc..)

Results

Results are currently being analyzed and will be updated soon.

Funding

Funding for the scholarship awards is provided by the IET Foundation. Funding for the evaluation is provided by Stanford University