Attendance of Selective Colleges amongst High-Performing, Low-Income Students

1.“Only a minority of high-achieving, low-income students apply to colleges in the same way that other high-achieving students do: applying to several selective colleges whose curriculum is designed for students with a level of achievement like their own. This is despite the fact that selective colleges typically cost them high-achieving, low-income students less while offering them more generous resources than the non-selective postsecondary institutions they mainly attend.” Hoxby and Turner 2013, Abstract

2.The question of whether attending a more selective college impacts future earnings is a difficult one to answer, and while some evidence has shown that attending a selective college increases future earnings, the evidence is somewhat limited. Were we to pursue this investigation further, this is a key question we would wish to examine (see “Questions for Further Investigation” on this page). Hoxby and Turner present some evidence that more selective colleges increase earnings: “Regression discontinuity estimates of attending a more selective college have been produced by Hoekstra (2009), Saavedra (2009), Cohodes and Goodman (2012), Hastings, Neilson, and Zimmerman (2012), and Kaufmann, Messner, and Solis (2012). All of these studies find substantial positive effects of attending a more selective college, and they examine a variety of outcomes: earnings, graduating on time, even the qualities of the person the student marries. Moreover, no study that uses the convincing regression discontinuity method has found negligible or even small effects of attending a more selective college. Hoekstra’s study is the most useful for our purposes because it focuses on U.S. students who are choosing between their state’s most selective public university and colleges that are less selective by about 65 SAT points. He shows that the students who attend the more selective university have earnings that are 18 to 28 percent higher each year than those of students who attend the less selective colleges. Moreover, people may enjoy such higher earnings for 40 or more years.” Hoxby and Turner 2013, p 36

3.“The ECO-C Intervention causes students to attend colleges that have higher graduation rates, have richer resources devoted to instruction and other student-related activities, and are more selective. Whether such colleges improve students’ long-run outcomes, especially their earnings, hasin the past been difficult to assess owing to the difficulty of controlling adequately for selection.43 However, there are recent studies that deliver highly credible estimates by comparing people who were just above and just below an admissions cut-off. This approach, the regression discontinuity approach, produces causal estimates because the people just to one and the other side of the cut-off are alike in aptitude and achievement for all intents and purposes. Regression discontinuity estimates of attending a more selective college have been produced by Hoekstra (2009), Saavedra (2009), Cohodes and Goodman (2012), Hastings, Neilson, and Zimmerman (2012), and Kaufmann, Messner, and Solis (2012).44 All of these studies find substantial positive effects of attending a more selective college, and they examine a variety of outcomes: earnings, graduating on time, even the qualities of the person the student marries. Moreover, no study that uses the convincing regression discontinuity method has found negligible or even small effects of attending a more selective college. Hoekstra’s study is the most useful for our purposes because it focuses on U.S. students who are choosing between their state’s most selective public university and colleges that are less selective by about 65 SAT points. He shows that the students who attend the more selective university have earnings that are 18 to 28 percent higher each year than those of students who attend the less selective colleges. Moreover, people may enjoy such higher earnings for 40 or more years.45 Recall that, per 10 dollars of cost, the ECO-C Intervention caused students to enroll in colleges where their median peer had scores that were 65 points higher. Thus, we can apply the Hoekstra estimates quite easily. Data from the Beginning Postsecondary Student Longitudinal Survey (2009) suggests that our target students would initially earn about $34,000 if they did not attend selective colleges but instead attended colleges categorized by Barron’s as Less Competitive.46 An 18 to 28 percent increase in this level of earnings gives us $6,120 to $9,520 per year. If we apply a 3 percent real discount rate and assume 5 percent real earnings growth over a 40-year career (a conservative assumption based on the actual earnings growth of people with similar aptitude in the National Longitudinal Survey of Youth 1979), we get a lifetime earnings difference of $365,028 to $567,821. Even if we assume a real earnings growth rate of only 2.5 percent, we still get a lifetime earnings difference of $222,990 to $346,874. These are clearly imprecise calculations but the imprecision does not matter much because the numbers are obviously much larger than $10. So far, we have considered only private benefits that could potentially be attributed to the ECOC Intervention. There are also social costs and social benefits. Among the social costs are the costs of providing the student with a more expensive education. (Recall that, given our target students’ achievement, they themselves tend to pay less when they attend a more selective college. However, the college spends more.) Our estimates suggest that, per $10, the ECO-C Intervention might increase this social cost by no more than $50,613 for all four years of college.47 Thus, before counting any social benefits, the benefit-to-cost ratio is high–always above 4.45. The social benefits of the ECO-C Intervention are harder to assess, but they are the benefits associated with having high-achieving students from low-income families achieve considerable income mobility and socio-demographic mobility. For instance, such students may “pave the way” to selective colleges for other students from their high schools or neighborhoods. Or, such students may inspire other low-income students to study more because their experience makes the benefits of high achievement more salient.” Hoxby and Turner 2013, pg 35

4.“In this study, we use a randomized controlled trial to evaluate interventions that provide students with semicustomized information on the application process and colleges’ net costs. The interventions also provide students with no-paperwork application fee waivers.” Hoxby and Turner 2013, Abstract.

5.Hoxby and Turner 2013 pgs 15-16.

6.“For the 2011-12 cohort of high school seniors, we also randomly selected 6,000 students who met the same test score criteria but who had estimated family income above the bottom tertile and/or attended a feeder high school. Although these students are outside our target group, we selected some of them–at a lower sampling rate–so that we could test whether the effects of the ECO-C Intervention were different for the target students than for non-target students. Most of the results shown in this paper are for target students. It will be clear when we use data on non-target students.” Hoxby and Turner 2013 pg 16.

7.

“There are at least four prominent hypotheses about why income-typical students exhibit application behavior very different from that of high-achieving, high-income students. We designed the interventions to test each of the four hypotheses. Hypothesis I is that income-typical students lack the advice that a expert college counselor would give a high-achieving student. An expert counselor would advise such a student to apply to eight or more colleges, most of which would be peer colleges whose median student scores within 5 percentiles of the student’s own score. A student would also typically be advised to apply to a couple of colleges whose median student scores 5 to 10 percentiles above him and one or more colleges whose median student scores 5 to 10 percentiles below him. These colleges are sometimes described as “match,” “reach,” and “safety” colleges, but we prefer the “peer” nomenclature because it focuses us on preparation and curriculum as opposed to strategy. An expert counselor would also advise a student to obtain letters of reference; take college assessments on schedule; send verified assessment scores to colleges; write application essays; complete the Free Application for Federal Student Aid and the CSS Profile; and meet all other deadlines and requirements of selective colleges’ applications. Finally, an expert college counselor would advise a student to compare colleges on the basis of their curricula, instructional resources, other resources (housing, extracurricular resources), and outcomes (such as graduation rates). The Application Guidance intervention was designed to test Hypothesis I. It provides the aforementioned information and gives students timely and customized reminders about deadlines and requirements. It provides students with semi-customized tables that compare colleges’ graduation rates. The student is always confronted with the graduation rates of his nearest colleges, his state’s flagship public university, other in-state selective colleges, and a small number of out-of- state selective colleges. (Colleges in latter two categories are selected at random among those that qualify.) Students’ secondary materials show the graduation rates of four-year colleges nationwide. Moreover, students’ primary materials explain how to use tools like the College Navigator to investigate colleges’ curricula, instructional resources, and housing in detail. Hypothesis II is that income-typical students misperceive their costs of attending selective colleges. Specifically, we hypothesize that students focus unduly on colleges’ “list prices” (the tuition and fees that an affluent student who received no aid would pay) and fail to understand the net costs for students like themselves. We also hypothesize that students are unaware that some colleges provide financial aid for living expenses while other colleges do not. We suspect that income-typical students do not realize that they would generally pay less to attend colleges that were more selective and that had richer instructional and other resources (Appendix Table 1). The Net Cost intervention was designed to test Hypothesis II. It provides students with information about net costs for low- to middle-income students at an array of colleges. The materials are semi-customized in that a student will always see the list prices, instructional spending, and net costs of his state’s public flagship university, at least one other in-state public college, nearby colleges, a selective private college in his state, one out-of-state private liberal arts college, and one out-of-state private selective university. (Institutions in the latter categories are selected at random from among those that fit the criteria.) The net cost information is shown for hypothetical families with incomes of $20,000, $40,000, and $60,000. Students’ secondary materials contain net cost information for a fuller array of colleges nationwide. The Net Cost materials are not intended to give a student precise information about his net costs but, rather, to make him recognize that list prices and net costs can differ greatly–especially at selective institutions. The materials repeatedly state that a student will not learn exactly how much a given college will cost him unless he applies. The Net Cost materials also explain how financial aid works, emphasize how crucial it is to complete the FAFSA and CSS Profile on time, clarify how a student’s Expected Family Contribution is computed, decipher a prototypical financial aid offer, and illustrate the trade-offs between loans, grants, and working while in college. Hypothesis III is that income-typical students are deterred from applying to college by application fees. At first glance, this hypothesis might seem unlikely because low-income students are eligible to have most application fees waived. (They are also eligible to have most college assessment fees waived.) Obtaining a fee waiver requires some paperwork, most often income verification by a counselor or similar authority. Students can also qualify for College Board fee waivers by completing the CSS Profile. None of the required paperwork is particularly onerous, and it is a modest element of the entire process of applying to a selective college. Nevertheless, Hypothesis III is plausible for a few reasons. A student may fail to realize that fee waivers are available until it is too late to qualify for them. (Details about obtaining a waiver are often on the final screens or pages of a college application.11) Or, a student who may be willing to fill out financial aid forms to be analyzed by a stranger may still balk at revealing his family’s income to a counselor. Or, his counselor may be too busy to do his part of the fee waiver process. Indeed, research by Bettinger, Long, Oreopoulos and Sanbonmatsu (2009) suggests that apparently modest FAFSA paperwork deters some students from applying to college. The Fee Waiver intervention is designed to test Hypothesis III. It provides students with no- paperwork fee waivers that allow them to apply to a 171 selective colleges. When we recruited colleges to accept ECO fee waivers, we specifically agreed to reimburse institutions for any case in which a student utilized a fee waiver when he was, in fact, ineligible based on that institution’s waiver criteria. The Fee Waiver materials instruct students on how to submit an ECO fee waiver– some institutions preferred students to mail paper waivers while others preferred that students enter an ECO code on their online applications.” Hoxby and Turner 2013, Pgs. 8-11.

“Having learned these lessons, we created the ECO Comprehensive or “ECO-C” intervention. It combines the Application Guidance, Net Cost, and Fee Waiver interventions. It does not include the Parent Intervention because we concluded that materials directed to parents were often read by students and vice versa. Since the Parent Intervention simply bundled content from the Application Guidance and Net Cost interventions in a different way, we believed that it would prove repetitive if added to the ECO-C Intervention. We randomly assigned the ECO-C Intervention, each of the four interventions, and control status to 3000 students, per treatment, in the cohort of 2011-12 high school seniors.” Hoxby and Turner 2013 pg 13.

8.Our understanding is that 2000 target students received the combination intervention and that there were 2000 target students in the control group, based on the fact that 3000 students were assigned to each intervention and to the control, and 2/3 (12,000 out of 18,000) students were in the target group. From Hoxby and Turner 2013:

“We randomly assigned the ECO-C Intervention, each of the four interventions, and control status to 3000 students, per treatment, in the cohort of 2011-12 high school seniors.” Pg 13

For the 2011-12 cohort of high school seniors, we used a random number generator to randomly select 18,000 students. 12,000 of these were our target students who:

• (i) scored in the top decile of test-takers of the SAT I or ACT (1300 math plus verbal on the SAT, 28 on the ACT);19
• (ii) had estimated family income in the bottom third of the income distribution for families with a twelfth grader (based on the 2007-2011 American Community Survey);
• (iii) did not attend a “feeder” high school.

We define a feeder high school as one in which more than 30 students in each cohort typically score in the top decile on college assessment exams. The test score cut-offs ensure that all the selected students have a high probability of admission at the 236 most selective colleges in the U.S. This corresponds to the set of colleges in Barron’s Most Competitive, Highly Competitive, and Very Competitive Plus categories.20 For the 2011-12 cohort of high school seniors, we also randomly selected 6,000 students who met the same test score criteria but who had estimated family income above the bottom tertile and/or attended a feeder high school. Although these students are outside our target group, we selected some of them–at a lower sampling rate–so that we could test whether the effects of the ECO-C Intervention were different for the target students than for non-target students. Most of the results shown in this paper are for target students. It will be clear when we use data on non-target students.” Pg 14-16

9.Hoxby and Turner 2013, Table 9 shows that the components of the combined intervention had effects in the same direction as the combined intervention, albeit smaller ones. Similarly, Table 10 shows that the 2010-11 cohort also experienced a significant increase in “Median SAT Score of College Where Enrolled” for the Net Cost and Fee Waiver interventions.

10.Hoxby and Turner 2013, pg 47 Table 5.

11.Hoxby and Turner 2013, pg 45 Table 3.

12.

“The ECO Comprehensive (ECO-C) Intervention costs about $6 per student” Hoxby and Turner 2013, Abstract

“However, there are recent studies that deliver highly credible estimates by comparing people who were just above and just below an admissions cut-off. This approach, the regression discontinuity approach, produces causal estimates because the people just to one and the other side of the cut-off are alike in aptitude and achievement for all intents and purposes. Regression discontinuity estimates of attending a more selective college have been produced by Hoekstra (2009), Saavedra (2009), Cohodes and Goodman (2012), Hastings, Neilson, and Zimmerman (2012), and Kaufmann, Messner, and Solis (2012).44 All of these studies find substantial positive effects of attending a more selective college, and they examine a variety of outcomes: earnings, graduating on time, even the qualities of the person the student marries. Moreover, no study that uses the convincing regression discontinuity method has found negligible or even small effects of attending a more selective college. Hoekstra’s study is the most useful for our purposes because it focuses on U.S. students who are choosing between their state’s most selective public university and colleges that are less selective by about 65 SAT points. He shows that the students who attend the more selective university have earnings that are 18 to 28 percent higher each year than those of students who attend the less selective colleges. Moreover, people may enjoy such higher earnings for 40 or more years.45 Recall that, per 10 dollars of cost, the ECO-C Intervention caused students to enroll in colleges where their median peer had scores that were 65 points higher. Thus, we can apply the Hoekstra estimates quite easily. Data from the Beginning Postsecondary Student Longitudinal Survey (2009) suggests that our target students would initially earn about $34,000 if they did not attend selective colleges but instead attended colleges categorized by Barron’s as Less Competitive.46 An 18 to 28 percent increase in this level of earnings gives us $6,120 to $9,520 per year. If we apply a 3 percent real discount rate and assume 5 percent real earnings growth over a 40-year career (a conservative assumption based on the actual earnings growth of people with similar aptitude in the National Longitudinal Survey of Youth 1979), we get a lifetime earnings difference of $365,028 to $567,821. Even if we assume a real earnings growth rate of only 2.5 percent, we still get a lifetime earnings difference of $222,990 to $346,874. These are clearly imprecise calculations but the imprecision does not matter much because the numbers are obviously much larger than $10. So far, we have considered only private benefits that could potentially be attributed to the ECO- C Intervention. There are also social costs and social benefits. Among the social costs are the costs of providing the student with a more expensive education. (Recall that, given our target students’ achievement, they themselves tend to pay less when they attend a more selective college. However, the college spends more.) Our estimates suggest that, per $10, the ECO-C Intervention might increase this social cost by no more than $50,613 for all four years of college.47 Thus, before counting any social benefits, the benefit-to-cost ratio is high–always above 4.45. The social benefits of the ECO-C Intervention are harder to assess, but they are the benefits associated with having high-achieving students from low-income families achieve considerable income mobility and socio-demographic mobility. For instance, such students may “pave the way” to selective colleges for other students from their high schools or neighborhoods. Or, such students may inspire other low-income students to study more because their experience makes the benefits of high achievement more salient.” Hoxby and Turner 2013 pgs 36-37.

The estimate that $10 leads to a 65 point increase in college median SAT scores derives from the authors treatment-on-the-treated estimates, which we believe are less likely to be accurate than the ITT estimates reported in the main text. However, this only makes a difference of a factor of three. (Based on the ITT estimates, the intervention costs $6/student and increases college median SAT scores by 15 points. 65/15 = 5, 5*$6 = $30.) Assuming both that the estimates of the returns to college selectivity from regression discontinuity studies are correct and that college median SAT score is a reasonable parameterization, this still implies returns of ~10,000x on the initial investment in the intervention.

13.“4. Apply similar interventions to different students and outcomes. While the ECO interventions tested thus far have focused on the relatively narrow problem of helping high achievers understand their full array of college-going opportunities, the basic structure of the intervention would help improve student outcomes in a variety of dimensions. For example, targeting students earlier in their high school careers could help position students to apply to more-selective colleges by providing customized guidance on AP courses, subject-area tests, and other college-preparation steps. A new host of challenges face these students once they enroll in college, such as knowing what courses to take, how much time to devote to employment outside of school, how much to borrow, and how to manage finances during school. There are opportunities to extend the basic insights of the ECO model to help targeted students succeed by providing in-college guidance related to financial management and curricular choices. Similarly, there are also opportunities to take the lessons learned from these interventions and apply them to other populations of students beyond low-income high achievers, who also would likely benefit from customized information on their postsecondary options.” Hamilton Project Policy Brief 2013-03, pg. 6

14.“3. Improve targeting and effectiveness of the intervention by providing ECO researchers with better access to data. A key factor in the success of the ECO intervention is the ability to target individual students with accurate, customized, and relevant information. This capacity depends critically on access to rich data to predict and target high-achieving, low-income students using a variety of indicators. This ability is already being eroded by changes in census data: the Census Bureau no longer gathers data on incomes, housing values, occupations, or adults’ education. This is a major loss of information at the fine level of geography we need to estimate students’ family income accurately. The federal government, however, maintains a variety of administrative databases that could dramatically improve the efficacy of the targeting, and thus the effectiveness of the program. Valuable data include information on the geographic concentration of student aid recipients within the U.S. Department of Education, and/or information on family income from other sources. By providing a mechanism to give access to ECO researchers and administrators, these data-sharing efforts would help ensure that more low-income students receive the valuable help they need.” Hamilton Project Policy Brief 2013-03, Pg. 6

15.

“The project is funded by the U.S. Department of Education, the Bill & Melinda Gates Foundation, the Spencer Foundation, the Smith Richardson Foundation, a number of non-profit organizations, colleges and universities.” Expanding College Opportunities website

The $6 million figure includes $3 million from the US Department of Education (US Department of Education website), $3 million from the Gates Foundation (Gates Foundation Grants Database), $75,000 from the Andrew W. Mellon Foundation (Mellon Foundation Summary of Grants and Contributions, 2008, pg 94), $300,000 from the Smith Richardson Foundation (Smith Richardson Foundation Annual Report 2009, pg 39) and an unclear amount from The Spencer Foundation (Spencer Foundation Grant Summaries, 2008).

16.“In 2013, the College Board committed to undertake the ECO intervention for every low-income high achiever who takes a College Board test” Hamilton Project Policy Brief 2013-03, pg 5

17.New York Times: “Delaware Seeks to Steer the Poor to Top Colleges”

18.“In 2013, the College Board committed to undertake the ECO intervention for every low-income high achiever who takes a College Board test, but this expansion still leaves out roughly half of all students that take college-admissions tests nationwide and a large share of colleges and universities that rely on applications from those students. Including high-achieving ACT students in the intervention would greatly extend the reach of the program… Fully implementing ECO interventions through both the College Board and ACT would ensure that high-achieving, low-income students in almost every region of the country could be reached by the intervention.” Hamilton Project Policy Brief 2013-03, pg 5