What Are the Effects of Year-Round Pell Grants on Short-Term Academic Outcomes and Employment During College?

Does extra financial aid for the summer lead to completion and earnings gains? Despite being the largest source of financial aid to low-income college students, the Pell grant has one major limitation: if students enroll in two semesters full-time, they will not have any tuition support for the third semester in the same academic year. The year-round Pell (YRP) was implemented in the academic years 2009–2010 and 2010–2011 to provide a second Pell grant to students who enrolled in more than 24 credits prior to the third semester and at least 6 credits during the third semester. Exploiting the timing of the policy, this research is the first to employ a difference in differences approach to examine the completion and labor market outcomes using a state administrative dataset from a community college system. The author found that each $1,000 of additional YRP grant increases summer enrollment by 28 percent points and the associate degree completion rate by 2.4 percent points. When breaking down the results by age of enrollment, the completion and labor market gains primarily benefit adult students who enrolled at age 20 or above. Given that the federal government and advocacy groups are considering reinstating the YRP, this research is timely in providing insight into the efficacy of the YRP.

Participant:

Vivian Yuen Ting Liu, CCRC

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The Center for Analysis of Postsecondary Education and Employment was established in the summer of 2011 through a grant (R305C110011) from the Institute of Education Sciences (IES) of the U.S. Department of Education.

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