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Can Financial Aid Help to Address the Growing Need for STEM Education? | JPAM Featured Article

December 18, 2017 11:02 AM

By Zachary Mabel, Harvard Graduate School of Education, Benjamin L. Castleman, University of Virginia, and Bridget Terry Long, Harvard Graduate School of Education

Article Introduction

Although workers in science, technology, engineering and math (STEM) fields earn above-average wages, the number of college graduates prepared for STEM jobs lags behind employer demand. A key policy question is how to increase educational investments and degree completion in STEM, especially for low-income and minority students. In this study, Castleman, Long, and Mabel examine a potentially overlooked barrier to STEM attainment in college: the financial cost to pursuing study in STEM courses and majors.

The authors offer new evidence on the role of financial aid in supporting STEM attainment by exploiting a sharp income-based cut-off for receiving the Florida Student Assistance Grant (FSAG). The cut-off increased the amount of need-based financial aid eligible students could receive by $1,300 per year (in 2000 dollars), representing an increase of nearly 75 percent compared to students just above the cut-off. Utilizing a regression discontinuity approach, the authors find that eligibility for additional need-based financial aid increased STEM credit completion by 20-35 percent among students academically prepared for STEM coursework in college. These impacts appear to be driven by a shift towards STEM-heavier courseloads among FSAG-eligible students. The authors also find suggestive evidence that aid offers increased degree attainment in STEM fields. The findings indicate that financial aid policy has a role to play in increasing STEM attainment in college because students make cost-conscious decisions when choosing not only where, but what to study in college.

This article preview is from the Winter 2018 issue of the Journal of Policy Analysis and Management (JPAM). APPAM invites authors from each issue to asnwer a few questions about their research to further promote the quality work in the highly-ranked research journal. Zachary Mabel answers questions below. Check out this and other JPAM articles online.

Author Interview

What spurred your interest in this research into how financial aid impacts students’ enrollment in STEM programs, or STEM education more broadly?

Most students interested in studying STEM in college eventually switch to other majors. Only 40 percent of college students overall and one-quarter of Black and Latino students initially interested in pursuing STEM majors persist to earn a degree in the field (Higher Education Research Institute, 2010; ACT, 2014). We were interested in exploring the extent to which financial barriers prevent students from persisting in STEM courses and majors for two reasons. First, increasing STEM attainment in college among students interested in and prepared for STEM coursework promises to maximize private returns to college and help to address anticipated shortages of STEM workers in the labor force. Second, because there has been little research investigating the role of financial aid in supporting STEM attainment, the cost to pursuing study in STEM fields may be a potentially overlooked barrier to STEM attainment in college that financial aid policy can help to address.

Your findings make the case that FSAG awards increased STEM course completion at a statistically significant level, but were less clear on the impact of STEM degree completion. In what ways can further research expand on whether financial aid impacts STEM graduation? 

We find suggestive evidence that aid offers increased degree attainment in STEM fields, although we cannot rule out null impacts on STEM degree production because our study samples are fairly small and the effect estimates are correspondingly imprecise. Studies with larger samples would likely be able to provide more definitive evidence of whether offering students additional grant aid increases degree completion in STEM fields. Further research could also shed light on whether the impacts of financial aid on college STEM attainment generalize to other types of students. In this study, we exploit a financial eligibility cutoff to estimate causal effects using a regression discontinuity design. As a result, the effects we estimate generalize only to students on the margin of grant eligibility. Yet it is possible that the effects of aid on STEM attainment vary by financial need. Studies that are able to estimate treatment effects for a broader group of students and that can examine variation in effects would provide additional policy-relevant insights.

Do you have a thought as to why your analytic sample was more heavily female compared to the full sample? 

The gender gap in college STEM attainment is large. It may therefore seem odd that females comprise 60 percent of the students in our analytic samples. However, research finds that nearly all of the gender gap in STEM attainment is due to the fact that many more women enter college than men (Card & Payne, 2017). As a result, a larger fraction of female college-goers are unprepared to pursue STEM coursework compared to their male peers. Yet among high school graduates, females and males exhibit similar rates of STEM readiness. Females are therefore overrepresented in our study, in part, because we focus on a subset of high school graduates, not college entrants, who demonstrate academic readiness for STEM coursework in college, and females represent slightly more than half (53 percent) of all high school graduates in our data for this study.

Do your findings indicate that financial aid must be targeted to increase STEM attainment?

Previous work investigating the impact of financial aid on STEM college outcomes has focused on the impacts of targeted, need-based aid programs or non-targeted, merit-based scholarship programs. In this study, we examine the impact of eligibility for a non-targeted, need-based grant program on STEM attainment in college. Our results suggest that expanding need-based aid programs may be a sound investment towards increasing STEM attainment. Importantly, our results are suggestive of a positive return on investment regardless of whether states target aid to STEM-prepared students or make aid available to low-income students more broadly. In an era of competing policy objectives and limited public funding for higher education, expanding need-based aid programs therefore promises to generate positive impacts on a range of outcomes in college and later in life, including but not limited to increasing STEM attainment.

How does this study impact or add to the existing research that can inform policy incentives for STEM programs? What would be the ideal next step for your research findings?

Our findings also reveal that the potential impact of interventions designed to raise STEM attainment levels and reduce socioeconomic gaps, such as academic support programs and learning communities, may not be fully realized if the financial barriers to pursuing STEM are overlooked. However, more research is needed to pin down the mechanisms by which need-based aid lowers obstacles to STEM attainment. Our results suggest that the impacts are primarily explained by within-institution factors rather than which schools students choose to attend. Yet we find no evidence that award offers led students to distribute their STEM coursework more throughout the academic year or made it easier for students to re-take STEM courses they had previously failed. We also find no evidence to suggest that aid offers lowered the financial barriers to pursuing more cost-intensive STEM courses. Unpacking precisely how college affordability influences students’ course-taking decisions is therefore an obvious next step. One possibility is that aid offers enable students to reduce their hours of work and devote more time to rigorous coursework. We were unable to examine this hypothesis with our data, and it remains a plausible mechanism that deserves further study.

About the Authors

Zachary_Mabel Zachary Mabel is a doctoral candidate at the Harvard Graduate School of Education. His research applies insights from labor and behavioral economics to improve college outcomes for low- income students and students of color. In his current work, Mabel investigates the scope and causes of college late departure, the phenomenon whereby students withdraw afer completing many of their academic degree requirements.
Benjamin_Castleman Benjamin L. Castleman is an Assistant Professor of Education and Public Policy at the University of Virginia, and the Founder and Director of the Nudge4 Solutions Lab at UVA. He is a senior advisor to Former First Lady Michelle Obama's Reach Higher Initiative and is the Faculty Director of the University of Virginia-US Army Partnership on Veterans' Education. Ben's research develops scalable solutions in education and public policy by leveraging behavioral insights, data science, interactive technologies, and deep partnerships with public and private agencies and organizations. Ben leads Mrs. Obama’s Up Next campaign, a national text messaging campaign to improve college, financial aid, and loan repayment outcomes for young Americans. Ben has presented about his research at several White House convenings and in testimony before Congress.

Bridget Terry Long is the Saris Professor of Education and Economics and former Academic Dean of the Harvard Graduate School of Education. Long is an economist who focuses on education with an emphasis on the transition from high school to higher education and beyond. Her research examines factors that influence student outcomes, such as enrollment, choice, and degree completion. Long is a Research Associate of the National Bureau of Economic Research (NBER) and member of the Board of Directors for MDRC, a nonprofit, social policy, research organization.

Submit Your Research to JPAM

JPAM seeks contributions that span a broad range of policy analysis and management topics with an emphasis on research that conveys methodologically sophisticated findings to policy analysts and other experts in the field. Both domestic and international contributions in public management are welcome, as well as a broad range of policies related to social well-being, health, education, science, environment, and public finance. JPAM strives for quality, relevance, and originality. An interdisciplinary perspective is welcome as are articles that employ the tools of a single discipline.

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