The impact of Korea's National Scholarship program on college students' academic achievement

Abstract

This study investigates the impact of eligibility for Korea's National Scholarship program, a need-based grant for low- and middle-income college students, on students' GPA by using a regression discontinuity approach. Type I grant-eligible low-income students near the cutoff score for grant eligibility achieve lower GPA scores than ineligible students; the impact is notable for students from the lowest income class attending public institutions. Type II grant eligibility does not have a distinct effect. The findings do not support the human capital theory-based hypothesis that grant aid contributes to increasing student academic achievement. However, low-income college students near the cutoff are responsive to financial incentives and adjust their efforts accordingly. We suggest policy implications concerning academic requirement, aid amount, and predictability of aid awards.