Research suggests that when students receive grants, they feel more obligated to get better grades than their peers receiving loans, Josh Mitchell argues in the Wall Street Journal.
According to a study that tracked two groups of students at four-year colleges, students who received grants achieved grades about 0.08 to 0.15 points higher on the 4.00 scale than their peers who received loans.
Study authors Peter Cappelli at the University of Pennsylvania's Wharton School and Shinjae Won at the University of Illinois told the Wall Street Journal that "grants create pressure to reciprocate by taking academic performance more seriously."
The study was conducted in 1993, but the topic continues to be relevant today, since Democratic presidential nominee Hillary Clinton has released a plan for tuition-free college.
Mitchell reports that critics of Clinton's plan for free college wonder if insulating students from the costs of their education would take away from hard work and academic incentives. But, he argues that the study's results debunk the idea that students who don't have education debt won't take their education seriously.
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However, there are reasons to be cautious about applying the study to today's students, according to James Day, VP and managing director Hardwick Day, a division of EAB, and Carol Stack, a principal also of Hardwick Day.
Day explains that in 1993, a student receiving all grants and no loans would have been both extremely talented and affluent, whereas a student receiving all loans and no grants would be neither. These external factors could have affected the students' grades.
Furthermore, most grants, both in 1993 and today, have minimum GPA requirements. That's a big incentive for students to keep their grades up, Day says, and a major difference between grants and free tuition. The selective nature of grants may also serve to encourage and motivate students—versus free tuition open to anyone—both experts say.
For predicting what free tuition might mean in the United States, Stack proposes looking at the situation in other countries that already have free tuition. Countries that have both generous access policies and tuition coverage tend to have lower completion rates than those with more selective admissions processes.
Time-to-graduation was not measured in the 1993 study on grants and loans, as Day points out (Mitchell, Wall Street Journal, 9/19).
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