Financial aid and students' college decisions - Evidence from the District of Columbia Tuition Assistance Grant Program

The District of Columbia Tuition Assistance Grant Program (DCTAG), instituted in 1999, allows D. C. residents to attend public colleges and universities throughout the country at considerably lower in-state tuition rates. We use the sharp decline in the price of public colleges and universities faced by D. C. residents to estimate the effects of price on college application and enrollment decisions. We find that DCTAG increased the likelihood that, students applied to eligible institutions and markedly increased college enrollment rates among recent high school graduates. Enrollments increased primarily at less selective colleges and universities, with no decrease at more selective schools.