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Funding Shocks and University Behavior: A Synthetic Control Evaluation of Colorado's College Opportunity Fund. EdWorkingPaper No. 23-748

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Title: Funding Shocks and University Behavior: A Synthetic Control Evaluation of Colorado's College Opportunity Fund. EdWorkingPaper No. 23-748
Language: English
Authors: Max R. W. Mathias, Annenberg Institute for School Reform at Brown University
Source: Annenberg Institute for School Reform at Brown University. 2023.
Availability: Annenberg Institute for School Reform at Brown University. Brown University Box 1985, Providence, RI 02912. Tel: 401-863-7990; Fax: 401-863-1290; e-mail: annenberg@brown.edu; Web site: https://annenberg.brown.edu/
Peer Reviewed: N
Page Count: 66
Publication Date: 2023
Document Type: Reports - Evaluative
Education Level: Higher Education
Postsecondary Education
Descriptors: Educational Finance, Higher Education, Universities, Program Evaluation, Public Colleges, Paying for College, Debt (Financial), State Aid, Educational Policy, Financial Policy, Tuition, Retrenchment
Geographic Terms: Colorado
Abstract: Discussion of the rising price of higher education and associated student debt in America has been a key feature of political discourse in recent memory, with renewed interest sparked by the announcement of the student loan forgiveness plan. Federal student debt has increased by 756% since 1995, and total student debt tripled from 2007 to 2022. Concurrently, state support for public universities fell by 18% from 2000 to 2015. This phenomenon has drawn interest in the literature, with works by Jaquette and Curs (2015), Bound et al. (2016), Deming and Walters (2017), Webber (2017), and Mathias (2022) examining the effect of state disinvestment on higher education pricing and enrollment. This paper uses data from IPEDS to examine Colorado's College Opportunity Fund, which eliminated state appropriations to Colorado universities in 2006. I advance the literature by being the first to employ quasi-experimental methods, using a synthetic control identification strategy to measure the impact of this funding shock on enrollment and tuition revenue recuperation by Colorado universities. I find that Hispanic enrollment increased by 3 percentage points relative to the synthetic counterfactual, and that tuition revenue increased by 42% as a result of the policy. These results are robust to threats to identification, and placebo tests conrm the validity of the design. These findings provide robust evidence of the pitfalls of state disinvestment in higher education, and the consequences for students who are left to foot the bill.
Abstractor: As Provided
Entry Date: 2025
Accession Number: ED672263
Database: ERIC
FullText Text:
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  Data: Annenberg Institute for School Reform at Brown University. Brown University Box 1985, Providence, RI 02912. Tel: 401-863-7990; Fax: 401-863-1290; e-mail: annenberg@brown.edu; Web site: https://annenberg.brown.edu/
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  Data: Discussion of the rising price of higher education and associated student debt in America has been a key feature of political discourse in recent memory, with renewed interest sparked by the announcement of the student loan forgiveness plan. Federal student debt has increased by 756% since 1995, and total student debt tripled from 2007 to 2022. Concurrently, state support for public universities fell by 18% from 2000 to 2015. This phenomenon has drawn interest in the literature, with works by Jaquette and Curs (2015), Bound et al. (2016), Deming and Walters (2017), Webber (2017), and Mathias (2022) examining the effect of state disinvestment on higher education pricing and enrollment. This paper uses data from IPEDS to examine Colorado's College Opportunity Fund, which eliminated state appropriations to Colorado universities in 2006. I advance the literature by being the first to employ quasi-experimental methods, using a synthetic control identification strategy to measure the impact of this funding shock on enrollment and tuition revenue recuperation by Colorado universities. I find that Hispanic enrollment increased by 3 percentage points relative to the synthetic counterfactual, and that tuition revenue increased by 42% as a result of the policy. These results are robust to threats to identification, and placebo tests conrm the validity of the design. These findings provide robust evidence of the pitfalls of state disinvestment in higher education, and the consequences for students who are left to foot the bill.
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      – Text: English
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        PageCount: 66
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      – SubjectFull: Educational Finance
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      – SubjectFull: Higher Education
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      – SubjectFull: Universities
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      – SubjectFull: Program Evaluation
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      – SubjectFull: Public Colleges
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      – SubjectFull: Paying for College
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      – SubjectFull: Debt (Financial)
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      – SubjectFull: State Aid
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      – SubjectFull: Educational Policy
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      – SubjectFull: Financial Policy
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      – SubjectFull: Tuition
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      – SubjectFull: Retrenchment
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      – SubjectFull: Colorado
        Type: general
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