Financial Aid Helps Address the Growing Need for STEM Education

Although workers in science, technology, engineering and math (STEM) fields earn above-average wages, the number of college graduates prepared for STEM jobs lags behind employer demand. A key policy question is how to increase educational investments and degree completion in STEM, especially for low-income and minority students. In this study, to be published in the Winter 2018 issue of the Journal of Policy Analysis and Management (JPAM). Castleman, Long, and Mabel examine a potentially overlooked barrier to STEM attainment in college: the financial cost to pursuing study in STEM courses and majors.

The authors offer new evidence on the role of financial aid in supporting STEM attainment by exploiting a sharp income-based cut-off for receiving the Florida Student Assistance Grant (FSAG). The cut-off increased the amount of need-based financial aid eligible students could receive by $1,300 per year (in 2000 dollars), representing an increase of nearly 75 percent compared to students just above the cut-off. Utilizing a regression discontinuity approach, the authors find that eligibility for additional need-based financial aid increased STEM credit completion by 20-35 percent among students academically prepared for STEM coursework in college. These impacts appear to be driven by a shift towards STEM-heavier courseloads among FSAG-eligible students.

The authors also find suggestive evidence that aid offers increased degree attainment in STEM fields.

The findings indicate that financial aid policy has a role to play in increasing STEM attainment in college because students make cost-conscious decisions when choosing not only where, but what to study in college.

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