Does Federal Financial Aid Affect College Enrollment? Evidence from Drug Offenders

In 2001, amendments to the Higher Education Act made people convicted
of drug offenses ineligible for federal financial aid for up to two
years after their conviction. This law change had a large negative
impact on the college attendance of students with drug convictions.

On average, the temporary ban on federal financial aid
increased the amount of time between high school
graduation and college enrollment by about two years.

Affected students were less likely to ever enroll in college.
Students living in urban areas and those whose mothers did not
attend college appear to be the most affected by these amendments.

The law did not deter young people from committing drug felonies nor did it
substantively change the probability that high school students with
drug convictions graduated from high school. There is no evidence of
a change in college enrollment of students convicted of non-drug
crimes, or of those charged by not convicted of drug offenses. In
contrast to much of the existing research, for this
high-risk group of students, eligibility for federal financial aid
strongly impacts college investment decisions.