Providing poor students with money to attend college can be a worthwhile investment for taxpayers.
The paper, distributed this week by the National Bureau of Economic Research, focuses on students at four-year public universities in Texas who were just barely eligible to receive the maximum amount of money the federal government provides to low-income students through the Pell grant and those who just missed the cut off.
The researchers found that students who received the maximum grant were more likely to graduate, graduated faster and earned more. Those extra earnings mean they'll likely pay more in taxes, generating enough extra money for the government to ultimately recoup its investment.
“In this population, in this setting, giving these low-income students $700 more in their first year of school basically pays for itself within 10 years,” said Lesley Turner, an economics professor at the University of Maryland and one of the authors of the study.
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