Ian Fillmore
Sean McMahon

Federal financial aid depends on a student's Expected Family Contribution (EFC)--the higher her EFC, the less aid a student receives. We estimate the effect of increasing federal aid on student outcomes by leveraging an increase in the income threshold for an "automatic zero EFC," which qualifies students for the most generous federal aid. We find little evidence that expanding eligibility for an automatic zero EFC affected student outcomes. We argue this may be due to the volatility of federal aid from year to year and highlight this as an important dimension for future research. 

Publication Type  
Working Paper
File Description  
First version, May 2019
JEL Codes  
H52: National Government Expenditures and Education
H81: Governmental Loans; Loan Guarantees; Credits; Grants; Bailouts
I22: Educational Finance
financial aid
Expected Family Contribution
volatility of federal aid