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21-07-17PromiseInternalExpendDelaneyHemenway.pdf (503.36 kB)

Inside the Black Box: A Difference-in-Difference Analysis of Shifts in Postsecondary Institution Spending Patterns in Response to "Promise" Financial Aid Programs

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posted on 2021-07-26, 23:08 authored by Jennifer DelaneyJennifer Delaney, Bradley Hemenway

Using a panel dataset from 2000-2014, this paper employs a difference-in-difference design to consider the impact of the introduction of a “promise program” on postsecondary institutions’ internal spending levels and patterns. We find that promise programs influence postsecondary institutional behavior in every area we tested: student-related and non-student-related expenditure levels and shares. We find decreases in student-related expenditure areas at 2-year institutions, but no significant change at 4-years. Non-student-related expenditures are mixed at 2-years with levels of expenditures increasing for auxiliary but decreasing in public service areas. By contrast public service expenditures increase at 4-years. Shares of expenses also shift with declining spending on student services but increased institutional support at 2-years. However, there are no changes to the share of expenses at 4-years. Overall, we find that 2- and 4-year institutions react differently to the introduction of a promise program, with the greatest impact at 2-years.


NSF Grant #DRL-0941014


Declaration of conflicts of interest


Corresponding author email

Lead author country

  • United States

Lead author job role

  • Higher Education Faculty 4-yr College

Lead author institution

University of Illinois at Urbana-Champaign

Human Participants

  • No

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