This paper examines the importance of format in aid programs, focusing on state appropriations to public postsecondary institutions. These funds subsidize costs for in-state students, but they may also influence choices between institutions due to their in-kind format. Using conditional the logistic choice model and extensive match-specific information, the paper approximates the choice between nearly 2700 college options to examine the effect of several dissimilar state systems. The results suggest that the level and distribution pattern of subsidies strongly affect decisions. If the aid could instead be applied to any in-state college, up to 29% more students would prefer to attend private four-year colleges. Reprinted by permission of the MIT Press
The effects of financial aid policies on the behavior of post-secondary institutions are examined. The results suggest that four-year colleges in Georgia particularly private institutions, responded by increasing student charges and in the most extreme case, colleges recouped approximately 30 percent of the scholarship award.