What Constitutes Prudent Spending from Private College Endowments? Evidence from Underwater Funds - forthcoming in Education Finance and Policy

This study examines how private colleges and universities choose to spend versus reinvest resources in endowment funds that have suffered investment losses. The analysis takes advantage of a market downturn and public policy shift, which together revealed how colleges define prudent spending. Investment losses during the financial crisis of 2008 left many endowment gift funds below their original donated values, or "underwater." Colleges in some states were legally required to cut spending from underwater funds. Other states had recently enacted the Uniform Prudent Management of Institutional Funds Act, which allows prudent spending from underwater funds. The Act loosened financial constraints, and affected colleges responded by spending 22 percent more from their endowments in the fiscal year following the financial crisis. Constrained colleges did not increase spending from unrestricted parts of their endowments to offset reduced spending from underwater funds. 

Unformatted journal version (June 2017)

The Impact of Electronic Payments for Vulnerable Consumers: Evidence from Social Security, with Alexander Strand and J. Michael Collins - forthcoming in Journal of Consumer Affairs

Vulnerable consumers may face barriers to using electronic payments, especially consumers in "unbanked" households where no member has an account to receive payments. In March 2013, the US Social Security Administration transitioned exclusively to electronic payments, representing a large shift in payment mode mandated at the federal level. This study identifies the size and characteristics of the population impacted by this shift, by linking administrative data on Social Security payments to a nationally representative survey on the use of bank accounts and financial services. We find that the majority of unbanked Social Security recipients took up electronic payments well before the March 2013 deadline. The mandate does not appear to have increased the use of bank accounts; instead recipients used electronic payment cards. However, the transition to electronic payments was slowest among the most financially vulnerable households, suggesting a focus on these households as payment methods continue to develop.

Colbert on the topic: "Social Security checks are going paperless. 'Cause if there's one thing seniors are good at, it's online banking."

And a goofy promo for Go Direct.

Published version (requires access to journal)

Working paper (August 2016)

Working papers

Using Multiple Discontinuities to Estimate Broad Effects of Public Need-Based Aid for College - research brief and paper coming soon, draft available by request

This study estimates how the price of college affects college attainment for low-income students. Federal and state governments spent $39 billion on grants to low-income college students in school year 2014--15, but evidence is mixed regarding the effects of government aid programs on college attainment. Existing studies have not isolated effects of public need-based aid for students with the lowest incomes and greatest financial need. The Wisconsin Grant is a state-funded program that offers grant aid to students based on a measure of family income, and allocates funding first-come first-served among financially eligible applicants. In a regression discontinuity design, I identify the impacts of financial aid using discontinuous eligibility in both income and application date, which affect different groups of students at different points in their college careers. This approach allows for estimation of effects for a broader population than in a typical regression discontinuity design. In particular, the group of students who apply near the cutoff in application date includes students with the lowest incomes. I report average and heterogeneous effects, and discuss implications for the grant program. 

        This work is supported by a Spencer Foundation Small Research Grant

This project has been selected to receive a grant for services as part of Using Linked Data to Advance Evidence-Based Policymaking, a partnership of Chapin Hall and the U.S. Census Bureau, supported by the Laura and John Arnold Foundation.

Competing Methods of Informing Student Borrowers: A Randomized Field Experiment at a For-profit Online University, with J. Michael Collins and Sara Goldrick-Rab - HOPE Lab Working Paper coming soon, draft available by request

College students attending online programs from for-profit institutions are more likely to be first-generation college students, lack experience with personal finance, and rely heavily on loans to pay for college. Taking student loans may be their first major financial decision. Loan counseling delivered at the time of student loan taking could better inform their human capital investment decisions. In this study, a sample of 4,700 first-time student loan borrowers beginning an online degree program at a for-profit institution were randomly assigned to one of two conditions for student loan entrance counseling: status quo Department of Education counseling, or a federally approved enhanced counseling product. We look for differences between the two groups in borrowing, enrollment, major choice, and college attainment. Initial results show no significant differences in borrowing behavior, but suggest positive impacts on retention of a more engaging video-based loan counseling platform.

Press coverage in the Chronicle of Higher Education.

This work is supported by the US Treasury Financial Empowerment Innovation Fund.

High School Students' Knowledge of Parental Income and Implications for Planning how to Finance College, with Janet K. Holt

Most students finish high school with low levels of financial knowledge, yet they are months away from important decisions about how to finance college. Students may not know about family finances, even though parental income is a key determinant of financial aid for college. This study measures the financial knowledge of high school students by comparing survey answers about parental income to actual measures of parental income from financial aid applications, in a statewide sample. We find that students can accurately state parental income 24% of the time, within $15,000. Overreporting of parental income is much more common than underreporting. We explore potential causes and consequences of misreporting, and implications for research using self-reported income. 

IERC Research Brief (June 2017)

Aid After Enrollment: Impacts of a Statewide Grant Program at Public Two-year Colleges, with Sara Goldrick-Rab

Most students who begin at community colleges do not finish with a degree. The net price of college commonly shifts after enrollment, and there is little evidence on how these shifts affect two-year degree completion. This study provides evidence on the impacts of a private program that offers supplemental grant aid to students with demonstrated financial need, who are already enrolled at public two-year colleges in Wisconsin. An evaluation using a randomized control group and data from over 5,000 students in multiple cohorts, fails to confirm substantial increases in persistence or degree completion caused by the grant program. 

Wisconsin HOPE Lab Working Paper (August 2016)

Direct and Indirect Effects of Policies to Increase Kidney Donations

A kidney transplant is a life-saving treatment for end-stage renal disease. Transplantable kidneys can come from living or deceased donors, but neither source of supply is keeping up with the growing demand. This study focuses on a model state law drafted in 2006, which has been enacted in 46 states and the District of Columbia as the Revised Uniform Anatomical Gift Act. The Act includes several measures that could increase supply of deceased donor kidneys. I use an event study approach to estimate the full effect of the Act on the supply of kidneys for transplant. The estimate is identified by arguably exogenous differences in timing of enactment across states over a seven year period. I find that the number of deceased donors of kidneys increases by five to seven percent as a result of the Act. The main channel for this effect is organ recovery from registered donors where unavailability or conflict among surviving family members would have prevented organ recovery under prior law. I find suggestive evidence of a corresponding reduction in living donors of kidneys, an indirect consequence of this law governing deceased organ donations.

Work in progress

Can Knowledge Empower Women to Save More for Retirement? with J. Michael Collins - working paper coming soon

Retirement balances are typically lower among women than men. This study assesses the role of financial knowledge and empowerment in contributing to the gender gap in savings. It evaluates the effects of financial education delivered to women in the workplace, using administrative data on 31,000 public-sector workers in Wisconsin. All of these workers participated in a mandatory defined-benefit pension plan, but 47% also participated in a deferred-compensation savings instrument provided by their employer, with the median participant contributing 1.6% of earnings each month. In a triple-difference strategy, we compare the progression of gender gaps in savings over time, at state agencies that implemented financial education versus a comparison group that did not. We estimate that a multi-media education effort increased participation in retirement savings by 2.6 percentage points, closing the gender gap by more than half. The education program operated with very low marginal costs, and is likely to be portable to other contexts.
This work is supported by the Steven H. Sandell Grant Program at the Center for Retirement Research at Boston College.

Presentation at the 2017 Retirement Research Consortium. 

Informing policy and practice

Guest Feature, IERC InformED Newsletter (May 2017)

Overview of Wisconsin Higher Education, in Paying the Price: College Costs, Financial Aid, and the Betrayal of the American Dream, with author Sara Goldrick-Rab - U of Chicago Press

WalletHub Student Loan Calculator, Expert Opinions (May 2016)

Statement on Senate Bill 540 / Assembly Bill 740: Providing for Additional Funding for Wisconsin Grants to Technical College Students - Wisconsin HOPE Lab Policy Report (February 2016)

Statement on Senate Bill 228: Relating to the Eligibility Criteria and Amount of the Academic Excellence Higher Education Scholarship - Wisconsin HOPE Lab Policy Report (August 2015, updated February 2016)

The Wisconsin Grant: Overview and Recommendations for Evaluation, with Sara Goldrick-Rab - Wisconsin HOPE Lab Working Paper (January 2016)