Student financial aid: comparison by sector

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Virginia Polytechnic Institute and State University


The purpose of the study was threefold: (a) to determine the amount of student financial aid received by undergraduate students in targeted groups to see who benefits, (b) to identify a limited number of variables that account for a significant portion of differences in aid distribution, and (c) to examine alternative models that might clarify suspicions of substantive bias in aid distribution.

The research questions addressed the variability among aid recipients in amount of student financial aid, the variables most closely related to aid differences, and the extent to which these variables are included in financial aid formulas.

This study employed data from the National Postsecondary Student Aid Study, which collected enrollment and financial aid information for 59,886 postsecondary education students in Fall, 1986. In this study, several samples of aided undergraduate students from public and private, non-profit, institutions were used. Methods included:

  1. A large number of variables, selected because of their close association with aid distribution, were reduced through factor analysis to support descriptive analysis.

  2. The resulting factors and variables were used to create competing models to predict variability in aid distribution.

  3. Regression models were tested using SAS regression procedures.

  4. Significant variables were used to aggregate the amounts of aid received by each class of recipient.

The major finding was that the amount of aid appeared to be primarily a function of institutional price/control. Income was related to the amount of aid, as were type of institution and attendance pattern, but these variables played a lesser role in accounting for aid differences. Student demographic variables, such as race and sex, accounted for little of the differences in the regression models. Yet differences were apparent when descriptive profiles were drawn. It was shown in the profiles that minorities and males generally received higher amounts of aid. Students at four-year institutions and at private institutions appeared to have a smaller percentage of their costs met by aid. Although aid was being distributed to need-based recipients largely in the manner intended by the Higher Education Act, some inequities in distribution were observed.