Academic journal article AEI Paper & Studies

The Effect of State Policy on College Choice and Match

Academic journal article AEI Paper & Studies

The Effect of State Policy on College Choice and Match

Article excerpt

States play a critical role in the U.S. higher education system, both by providing funding to colleges and students and by regulating some aspects of the college admissions process. (1) This paper summarizes existing research on a variety of state higher education policies, with a focus on the effect of such policies on students' college enrollment choices, the quality of the colleges they attend, and their degree completion rates. We pay particular attention to the issue of the match between a student's academic skills and chosen college, in part because state policies likely most affect under-served, under-resourced, and under-informed students who, as recent research shows, are more likely to undermatch than their more advantaged counterparts. We emphasize the importance of evaluating such policies not only on the basis of how they affect enrollment rates but also by the extent to which they connect students to colleges that give them the greatest chance completing their degrees.

This paper addresses four broad types of state policies that influence students' college enrollment and academic match. First, we examine in-kind spending, the subsidies that states provide to their public colleges. Second, we consider the financial aid, both need-based and merit-based, that states provide to their students. Third, we document evidence on state policies that make mandatory for public high school students the taking of college entrance exams, such as the ACT or SAT. Fourth and finally, we consider admission criteria imposed by states, including affirmative action regulations, plans such as the Texas Top (10) Percent Rule, and minimum test score thresholds needed for admissibility.

In each of these areas, we provide an overview of the topic, discuss evidence provided by the existing research, and conclude with lessons learned and questions that still remain. Each section clearly demonstrates that state policies, intentionally and unintentionally, have a large impact on student college enrollment, quality and match. We see clear examples of students' longer-run outcomes, such as degree completion, positively affected by improving the quality of college they attend. Students appear to benefit, or are at least not harmed, even in instances where attending a higher quality college results in a poorer academic match, suggesting that the concept of match may be less important than the concept of absolute quality.

After discussing many examples of these effects, we conclude with a broader discussion of the role of state policy in higher education and how states should consider evaluating such policies that are often geared at enrollment and affordability, not choice and match. The central lesson here is that policymakers should think clearly about the margins on which students will alter their college choices as a result of the policy being designed. The ultimate impact of any higher education policy depends heavily on the alternative college choices affected students are forgoing as a result of the policy.


The primary way that states financially support students' pursuit of postsecondary education is through direct subsidies of public colleges themselves. In 2013, states spent a total of $72 billion on higher education, with local tax appropriations providing an additional $9 billion in support. (2) Of that total of $81.6 billion in state and local support, more than three-fourths (or $62.5 billion) funded "general public operations," meaning direct subsidies to the budgets of public colleges. (3)

There has been great variation over time in the extent to which these public in-kind subsidies have paid for college. In 1988, public subsidies amounted to $8,100 per student, or 76 percent of the total cost of higher education. In other words, 25 years ago, student tuition accounted for only 24 percent of the cost of a college education. In 2013, public subsidies came to $6,100 per student, or 53 percent of the cost of a college education, with student tuition covering the remaining 47 percent. …

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