Browsing by Author "Gul, Mehreen"

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    Optimal Subsidies for Increasing Two-Year and Four-Year College Graduation Rates
    (2020-04-24) Gul, Mehreen; Cunha, Flavio; Wolpin, Kenneth I.
    In 2015, the Texas Education Agency (TEA) in collaboration with the Texas Higher Education Coordinating Board (THECB) undertook an ambitious 60 30 TX plan as a part of its implementation of House Bill 22, introduced by the 85th Texas House of Representatives to enhance public school accountability. The 60 x30TX is a higher education plan that focuses on attaining a postsecondary graduation rate of 60% amongst the 25-34 age demographic in Texas by the year 2030. In this paper, I estimate the cost per high school graduate of attaining this target. I also compare the per student cost of this policy objective with that of two other counterfactual policies; the fi rst being one in which community colleges are made tuition-free for all high school graduates and the second being one in which public four-year college tuition is subsidized annually by $2,000 only for those who have completed an AA tuition free under the former policy. I find that a policy in which community colleges are made tuition free will increase the postsecondary graduation rate by age 29 to 26.6%, relative to a baseline of 22.6%, and will cost $2,114 per student. I find that a $2,000 public four-year college subsidy for those who have fi rst completed an AA tuition free will boost the postsecondary graduation rate to 29.4% and increase the per student cost to $10,594. Finally, I fi nd that a conditional cash transfer of $5,320 and $3,640 for two-year and four-year college enrollment, respectively, attains the targeted postsecondary graduation rate of 60% by age 29 and costs $16,569 per student with an estimated total cost of $2.3 billion. This is far in excess of the THECB's FY2018 operating budget of $807million.