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Journal of Student Financial Aid

Journal of Student Financial Aid

Abstract

Over the last two decades, a substantial body of research has examined student responsiveness to tuition increases and financial aid offers in postsecondary educational decisions (see, for example, Heller, 1997; Leslie and Brinkman, 1988). Another major research interest in higher education literature is student behavior in choosing a postsecondary educational institution (see, for example, Hossler, Braxton, and Coopersmith, 1989; Paulsen, 1990). As the costs of postsecondary education have risen, policy analysts and scholars have paid increasing attention to the impact of tuition costs and student financial aid on access to postsecondary education, college matriculation decisions, and subsequent student persistence in postsecondary education (McPherson and Shapiro, 1991, 1998; Mumper, 1996; St. John, 1990a, 1990b; St. John, Starkey, Paulsen and Mbaduagha, 1995; Weiler, 1996). Institutional policy-makers are concerned about student recruitment and enrollment on the one hand and institutional financial health on the other, while state and federal policy-makers are worried about the effective use of public funds to meet national interests such as access, choice, and attainment in postsecondary education. Policy analysts and higher education researchers have recently become concerned about whether students attend college and which schools students attend, because the postsecondary destinations of students are related to student educational attainment and career development (Hearn, 1988, 1991; Pascarella and Terenzini, 1991). Thus, from a social equity perspective, college tuition and financial aid have become serious policy issues. It is believed that the influence of perceived college tuition rates and financial aid availability becomes important during student college choice process and reaches the highest level in the senior year of high school (Hossler and Gallagher, 1987; Hossler, Schmit, and Vesper, 1999). However, not until the last few years has research on the impact of college tuition and financial aid been linked with models of student college choice. Savoca (1990) integrated price impact into her research on student application behaviors to college and concluded that this integration would result in estimating student price responsiveness more accurately. Meanwhile, recent research implies that tuition pricing and financial aid offers exert different impacts on student postsecondary participation decisions (St. John and Starkey, 1995). The purpose of this study is to identify the predictors of student sensitivity to college tuition and financial aid and to differentiate the impacts of these predictors on student price sensitivity in the student college choice process.

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