Working Paper: NBER ID: w18749
Authors: Michael F. Lovenheim; Emily G. Owens
Abstract: In 2001, amendments to the Higher Education Act made people convicted of drug offenses ineligible for federal financial aid for up to two years after their conviction. Using rich data on educational outcomes and drug charges in the NLSY 1997, we show that this law change had a large negative impact on the college attendance of students with drug convictions. On average, the temporary ban on federal financial aid increased the amount of time between high school graduation and college enrollment by about two years, and we also present suggestive evidence that affected students were less likely to ever enroll in college. Students living in urban areas and those whose mothers did not attend college appear to be the most affected by these amendments. Importantly, we do not find that the law deterred young people from committing drug felonies nor did it substantively change the probability that high school students with drug convictions graduated from high school. We find no evidence of a change in college enrollment of students convicted of non-drug crimes, or of those charged by not convicted of drug offenses. In contrast to much of the existing research, we conclude that, for this high-risk group of students, eligibility for federal financial aid strongly impacts college investment decisions.
Keywords: federal financial aid; college enrollment; drug offenders; Higher Education Act; 2013
JEL Codes: H30; I28; K14
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| HEA98 amendments (I28) | college enrollment for students with drug convictions (I23) |
| HEA98 amendments (I28) | financial aid restrictions (I22) |
| financial aid restrictions (I22) | college enrollment for students with drug convictions (I23) |
| HEA98 amendments (I28) | college investment decisions for students from urban areas (I23) |
| HEA98 amendments (I28) | college investment decisions for students whose mothers did not attend college (I24) |
| HEA98 amendments (I28) | high school graduation rates among students with drug convictions (I21) |
| HEA98 amendments (I28) | drug crime deterrence (K42) |
| drug convictions (K14) | college enrollment delay (I23) |
| drug convictions (K14) | college enrollment among students with non-drug crimes (K14) |