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Ongoing

Guaranteed Financial Aid for High School

Is low attendance affected by lack of knowledge about financial aid?

Problem

One of the core reasons behind low attendance in high schools in rural China is that tuition for high school and college/university have been rising. According to a recent survey by REAP, high school tuition, room, board and other fees in rural areas is around 4,000 yuan per year. High school students from remote villages and townships almost invariably have to live at school. As such, three years of high school can cost a poor family 12,000 Yuan or more. For a family living at or near the poverty line, the cost of high school attendance for one child may be the equivalent of 15 years of per capita income.

Although the national government has implemented policies to address this problem, it still struggles to keep students in school. Financial aid policies and initiatives were put in place to expand high school enrollments in poor, rural areas. However, financial aid policies seem to have limited effect for two reasons.

  • First, students can apply for and receive financial aid only after they enter high school. Poor middle school students do not know for certain whether or not they can receive financial aid to attend high school. Moreover, the money may not be disbursed until later in the school year. According to a REAP survey, only 10% of first year academic high school students received financial aid during the national requirement period (before November 11th each year). Moreover, among this group of financial aid recipients, 30% reported not receiving the amount promised by their school.
  • Second, students do not know they will have access to financial aid! Our surveys show that neither third-year middle school students nor currently enrolled high school students understand the details of the financial aid program (that is, they are not clear about their own rights and responsibilities). According to the survey, 73% of third year middle school students, 72% of first year academic high school students, and 55% of vocational high school students reported having no understanding of the national financial aid program. 

In spite of current efforts, in some poor rural areas of China, less than 40% of junior high students continue on to high school.

Testing the impact of guaranteed financial aid on educational outcomes.

Seeking to understand whether we could improve the government's current efforts in distributing financial aid, we evaluated a program that guaranteed financial aid for high school to students still in their final year of junior high. The impact of offering vouchers has been studied before and is consistent with microeconomic theory.

Our own work has shown that guaranteeing high school students financial aid for college has a significant impact on their educational choices (see REAP's financial aid for college project). However, the effect of similar interventions aimed at increasing high school matriculation rates among middle school students has not been studied.


Goals

This study aims to estimate the effects of a simple voucher intervention on the decision of poor rural students to attend any kind of high school. This study focuses on ninth grade students who are at the cusp of graduating. In other words, how would student education choices change if they are given a commitment for future financial aid in high school?


Approach

Randomized Controlled Trials (RCTs) are the gold standard for determining the size of effects that a given educational intervention may have on a population (compared to a control group). Proven solutions from RCTs are also most likely to be adopted by policymakers.

Using an RCT approach, this study randomly selected 32 junior high schools in Shaanxi province. Shaanxi province is a Western inland province with a large number of poor, rural students. A short 1-2 page baseline survey on the socio-economic characteristics of the students and their families was collected, and all students were tested with a grade-level appropriate standardized examination. Afterwards, we randomly provided vouchers to two of the four poorest students in each ninth grade class (the intervention group). We also set in place a rigorous protocol to avoid any spillover effects.

The voucher treatment condition is a commitment from the research team that if awardees choose to attend any kind of 3-year public high school at the end of 9th grade, we will provide funding to cover the tuition for each of the three years that they are enrolled.


Evaluation

In month 1, we distributed vouchers to our randomly selected intervention group. In month 6, we called each student to reaffirm our commitment. In month 10, around the time of their junior high graduation, we resurveyed the students and administered another grade-appropriate standardized examination. We also tracked where each student had been accepted to senior high school and prepared to give out financial aid as per our commitment. In month 12, we visited each senior high school to confirm that students were attending.


Results

Compared to the control group of students who did not receive vouchers, students who received vouchers were nearly 10 percentage points more likely to attend high school! This showed that, at least in part, students were not attending high school because they did not think they could pay for high school. We recently submitted a policy brief advising that the government begin offering financial aid commitments to students while they remain in junior high, which was recently signed and approved.

We will continue to track students in high school to see if the voucher has any future effect on their studies in senior high school.


Funding

Caterpillar Foundation

Research Materials