The price of college

College tuition is more expensive than ever, at the same time that college degrees are more valuable than ever before. Governments and institutions provide targeted grants to students to make sure everyone can afford college. Do these grants work to promote graduation? Yes, and effects are amplified where the grant’s message is clearer and for students with lower incomes.

• Wisconsin’s public aid program is delivered first-come first-serve, leaving lower-income students more likely to miss out on aid. However, we found that aid was most beneficial for the neediest students (briefs here and here).

• New Jersey’s public aid program had a similar effect, speeding up the time to degrees (brief version here and you can see me talk about it for about 18 minutes starting at 2:30 here).

• In summer 2021, New Jersey increased its investment in TAG, focusing funds on public universities. These choices were consistent with our findings published earlier in the spring of 2021. We followed up with a second report to answer several more questions of interest to New Jersey’s state government. A legislative Study Commission cited our work in their excellent report on TAG.

• We gathered more data to investigate why TAG had positive impacts on graduation, and we found that public university students who received TAG aid worked less in off campus jobs.

• With a team of coauthors, I studied a statewide program in Wisconsin that was privately funded and randomly assigned to students. That program struggled to increase degree completion among two-year college students but supported faster time-to-degree at public universities. Both of these studies were added to the What Works Clearinghouse, indicating they provided high-quality evidence for decision makers. We followed up to show that more financial aid increased the likelihood that university students would declare a major in STEM and graduate in STEM.

• Continuing on the theme of Wisconsin, my colleagues and I studied a local program that promised free tuition at Milwaukee Area Technical College, for high school graduates who applied for state and federal aid. The program attracted more students to MATC (published version here). This program did not deliver much funding to students, but it sent a clear message that college could be affordable.

college and career PATHWAYs

Community colleges can better serve students and local economies by creating more short-term postsecondary programs and making sure they fit together. I co-led a project studying how this worked in Ohio. Our first report described how students stack credentials, our second report estimated how stacking increases earnings, and we published journal articles on the timing of stacking and whether colleges could increase stacking by introducing new programs. We find that Ohio’s efforts are paying off for students, reinforcing findings from studies in California and Virginia.

Many state and federal initiatives promote science, technology, engineering, and math (STEM) education to train workers for STEM jobs. We found that defining “STEM jobs” and measuring the STEM workforce are not so straightforward. Asking experts to classify jobs or job tasks yields different results from asking individual workers to define their jobs. The disconnect is largest for women who work in fields like education and health care where technology likely plays a larger role now than ever before.

Findhelp is an online platform to connect college students to resources on campus and in the community (food stamps, financial aid, etc.). I interviewed campus representatives at four North Carolina community colleges about the cost, implementation, and potential effects of the program. They were optimistic that Findhelp could have benefits while being implemented at a pretty low cost, and a preliminary quantitative analysis was consistent with that view.

Financial education and decision making

There is an ongoing debate about whether people are generally well informed when making financial decisions (often they are not), and whether financial education can help inform them (only if cleverly delivered at the right time).

• College students are making bigger and tougher financial decisions than ever before, and in a national scan we found that many of them have low levels of financial literacy. However, those who had borrowed knew more about student loan terms regardless of their overall financial literacy. Was that because they all underwent an effective educational module for student loan entrance counseling? Probably not, but more investigation is needed.

• Women are also spending more of their adult lives single and supporting themselves through longer retirements. It turns out that a simple workplace education program increased women’s savings, by emphasizing empowerment instead of anxiety.  

• Young people can also learn a lot about finances before applying to college. Our research showed high school juniors were not well aware of their household income, a key factor in eligibility for financial aid.

Government role in Markets

As a public economist, I study markets where the government and non-profits play a large role, like education, health care, and social welfare.

• Education. Private colleges accumulate endowment funds to support students and faculty in the long-run. In the 2008 financial crisis, colleges made severe cuts to operations rather than treat endowments like a rainy day fund, even though they were given more legal freedom to spend from endowments.

• Financial products. The Colbert Report announced: "Social Security checks are going paperless. 'Cause if there's one thing seniors are good at, it's online banking!" The way the government delivers benefits is an unexpectedly important policy. In this case Colbert’s sarcastic prediction was mostly right.

• Health. Another kind of “market” that is heavily regulated by government is the one for organ transplantation. Reducing unnecessary restrictions on organ donation increased transplants and saved lives. However there was some indication of an offsetting effect: the increased supply of kidneys from deceased donors made living people less likely to donate to their relatives.

• Health insurance. Wouldn’t it be nice if we improved the incentives and the working of government-provided healthcare? Could we do that while saving money for patients and the government? Mark Cuban worked for years to develop such a plan, and then hired RAND to evaluate it. The answer was… it depends.

• More health insurance. Can the federal government update and improve the way it allocates payments for indirect practice expense (for things like equipment and labor that is used for lots of medical procedures). A major RAND project weighed in.

• Disaster recovery. An obvious place for the government to intervene. RAND has done a large amount of research on hurricane recovery in Puerto Rico, to which I contributed a small part.

• Post-military employment. What do service members earn in their first few years after separation? Are there some military occupations that struggle and could use more support in the transition? Yes.