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Volume 18, Issue 7


Scholarship, student outcomes, current achievers, GPA, credit-accumulation, graduation rates, college students, funding


This paper examines the effect of a state-financed merit-aid scholarship—the Arkansas Academic Challenge Scholarship (ACS)—on post-secondary outcomes at a large university in Arkansas. Exploiting scholarship eligibility requirements, we implement a fuzzy regression discontinuity design to identify the scholarship’s causal impacts on college outcomes. The analysis focuses on currently enrolled sophomores, juniors, and seniors who receive the scholarship to investigate the broad impacts of receiving money at nontraditional points in an individual’s college trajectory. Findings indicate small, negative impacts of scholarship receipt on short-run outcomes such as GPA and credit accumulation, but large statistically significant declines in the likelihood of graduating within four, five, or six years of matriculation. The youngest cohort, who began receiving funding during their sophomore year of enrollment, primarily drives these findings. However, cohort analysis also reveals that seniors who do not graduate on time are 54 percentage points more likely to graduate within 6 years of matriculation when they receive the scholarship. These results highlight the fact that the timing of receiving money may heavily influence student behavior and postsecondary outcomes.