Testing Federal Student-Aid Fungibility in Two Competing Versions of Federalism

Oberg, Jon H.
January 1997
Publius: The Journal of Federalism;Fall1997, Vol. 27 Issue 1, p115
Academic Journal
This study employs twenty-three years of federal, state, and institutional student-aid data to investigate the effects of federal grants to students on the behavior of higher education institutions. Unlike previous studies, this research differentiates between federal-aid programs according to whether a federal program follows “redivision federalism” or “cooperative federalism” concepts. Pell grants, exemplifying the former, appear highly fungible and inversely related to institutional grants to students, while campus-based federal programs, exemplifying “cooperative federalism, ” appear less fungible and positively associated with institutional grants. The results also suggest that grants to students are more important to higher education opportunity than indicated by some previous research.


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