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Abstract

At the start of the past decade, serious doubts were raised about the effectiveness of student financial aid, which influenced cuts in federal support for student aid in the 1980s. One of the objectives of this review is to determine whether there are reasons for these doubts. Other objectives are to determine whether changes in federal aid policy during the 1980s influenced equal opportunity and to identify unanswered research questions. The review indicates that student aid is an effective mechanism for promoting equal educational opportunity. However, the erosion in federal grant dollars during the past fifteen years may have influenced an erosion in minority access. The intent of federal student financial aid programs authorized under Title IV of the Higher Education Act (HEA) is to promote equal educational opportunity. Questions about whether student aid promoted this goal were raised by researchers in the early 1980s (e.g. Hansen, 1985). While it may be too late to recapture the cuts in federal grant programs made in the 1980s, given the current emphasis on reducing the federal budget deficit, it is, nevertheless, an opportune time to reconsider the effectiveness of student aid. This article reviews prior research on the impact of student financial aid. First, the framework used for the review is discussed briefly. Second, we focus on our knowledge of the impact of student aid on equal opportunity. Research is considered on each of the components of equal opportunity: access (attendance), choice of school, persistence, choice of major, and earnings. Finally, the findings from recent research are summarized and questions that merit further consideration by policy and institutional researchers are identified.

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