The Effect of Academic Scholarships on College Attendance

This study investigates the effect of merit-based scholarship offers in attracting academically gi? ed students. Data on i,288 freshman students who applied for merit scholarships at a large public research institution for the 1999-2ooo academic year were obtained from the 1998 and 1999 ACT student information surveys, as well as from the institution's 1999 demographics and r999 scholarship files. Predictions from a logistic regression model suggest that academically gifted students are more than twice as likely to attend the institution when offered scholarships. The study controlled for the students' background characteristics, academic ability, geographical location, high school attributes, preferred institutional characteristics, and financial variables. A growing number of institutions have been offering merit-based scholarships as an incentive in recruiting academically talented students. The question is whether such scholarships actually do bake a difference in shaping the college selection process of these students. The answer, according to McPherson and Schapiro (1998), will vary according to the type of institution. The purpose of this study is to examine the effect that a merit scholarship offer has on the decision of academically gifted students to attend a large public research university, while controlling for other variables. The theoretical model of student college choice developed by Hossler and Gallagher (1987) is used here as the conceptual framework for organizing and evaluating prior research on the college choice process. This model is based on the work of Chapman (1984), Jackson (1982), and Litten (1982). It proposes three phases: predisposition, search, and choice, where students' backgrounds, characteristics, and activities, as well as institutional attributes, interact to influence the decision-making process. Of these, the choice phase is most relevant to this study. Literature Review According to Hossler and Gallagher (1987), students evaluate their choice sets in order to identify the higher education institution (HEI) they will ultimately attend. A choice set may range from one institution to several institutions. Several variables influence where the student will apply and finally attend. In the sections below, these variables are discussed under the following areas: socioeconomic status, student ability, ethnicity, location, institutional attributes, and financial aid and cost considerations. SOCIOECONOMIC STATUS Much of the evidence suggests that socioeconomic status (sES) is related to both the cost and the quality of HErs to which students apply and finally attend. SES is typically broken down in the literature to include parental income, the number of household members, parent's education, and home ownership. Hearn (1984) used multivariate techniques to analyze the college choice preferences in a longitudinal sample of students and reported that low SES students were less likely to apply to high-status HEIS. In a later study, Hearn (iggi) found that low sES students were more likely to attend less selective HEis, regardless of their academic ability, achievement, and expectations. Ganderton (1992) defined SEs as a composite variable which is derived as a weighted average of such family characteristics as income, parent's education level, and home ownership. Holding ability constant, he found that sEs influences whether or not a student will apply to a high-status HEI. Spies (1978) used multiple regression to analyze data from a sample of high-ability students and discovered that middle and low-income students were less likely to apply to high-status institutions. Maguire and Lay (i98i) also found similar results. In addition, R. Chapman (1979) concluded that high SES students are more interested in quality than the cost of attendance. Furthermore, Zemsky and Oedel (1983) examined the HEI application patterns of students and found that high-income students were more likely to apply to out-ofstate institutions with more selective admissions standards. …