The Effects of State Higher Education Policies and Institutions on Access by Economically Disadvantaged Students

Do state government policies and institutions promote access to postsecondary education by economically disadvantaged students? I analyze the number of state residents receiving federal Pell grants relative to the college-age population raised in low-income households. Using data for 1993-2008, I estimate separate models for total Pell recipients and for those enrolled in public, private nonprofit, and proprietary institutions. I find consistent evidence that state spending on both need- and merit-based financial aid enhances access by economically disadvantaged students, with the effects of need-based aid being larger and more robust than those of aid based at least in part on merit. I also find that students in states with consolidated governing boards have slightly greater access to public and nonprofit institutions than those with statewide coordinating boards. Enrollment by economically disadvantaged students in the public and proprietary sectors also responds to the opportunity costs of attending college, as measured by the state unemployment rate. I do not find evidence of direct effects from state policies limiting affirmative action, or political elites' ideology.