The Indicator from Planet Money - Indicator Favs: How An Econ Experiment Changed Lives

Cardiff picked our final installment of favorites week. We learn about an experiment that led to more low-income students attending an elite college. Sometimes all it takes is the right nudge.

  • Play Speed:
Content Keywords: Caleb Adams Sue dynarski University of Michigan episode
00:00:00
NPR

00:00:10
everyone stays in Cardiff here this week. We are running some of our all-time favorite episodes from the shows past and today's episode is one of your pics and it features an example of how economies in this case the great Sue dynarski and her collaborators how they can use their research to come up with Creative Solutions to tough problems this episode originally aired in January of 2019. Caleb Adams is a sophomore at the University of Michigan. It's University PT did not expect you would ever be able to attend back when he was a high school student in the small town of Bark River in Michigan's Upper Peninsula of Michigan fan after I'd always loved Michigan by just never thought about actually going there because getting in the Michigan with hard and it was expensive grade point average captain of the football team National Honor Society and he held down a job.

00:01:07
University of Michigan is in the lead School less than 25% of the students who applied for last year's class were accepted Caleb's mother is a bus driver and his father is a cop. The family is of modest means and the sticker price for tuition and fees to attend the University of Michigan for 4 years. Even for a Michigan resident is at least $60,000 soap. Caleb always figured he would end up going to Northern Michigan University and said it's easier to get into and has a lower sticker price because it was really close to home and all my friends were going there. This is the indicator from Planet Money. I'm Stacey Vanek Smith and I'm Cardiff Garcia what Caleb did not know going into his senior year in high school. Was it an experiment run by an economist would end up changing the path of his life and the conclusions of the experiment are promising enough that it could end up doing the same for a lot of high school students. Just like the one that Caleb used to be students would wrongly assumed that going to an elite University just one.

00:02:07
It really an option.

00:02:10
This message comes from NPR sponsor The Economist intelligence unit. They help Business Financial and government sectors strategize globally and navigate the ever-changing economic and political landscape of almost every country in the world guiding firms and investment decisions and assessing business risk and opportunity to help your company understand the world and prosper within it visit viu.com indicate.

00:02:35
Sue dynarski is a professor of Economics education and public policy at the University of Michigan and she has been interested in the topic of inequality in educational outcomes ever since you got a scholarship to study Harvard where she realized how different she was from most of her classmates because she came from a low-income family and now is an economist one place where Sue observes a lot of an equality is within the student body of her own University the statistics that we now know where that at, most of the top schools the Harvard Stanford send and the Michigan's there are as many students from the top 1% of income distribution as there are from the entire bottom 60% of the income distribution, right? So huge over-representation of Rich students in under-representation of low-income students, and when there's an equality within the student bodies of elite colleges that can lead to higher in a quality after college as well for a couple of reasons one is that attending a higher-quality college leads to

00:03:35
Aaron comes after graduation. That's not that surprising and another reason is that students who attend elite colleges are a lot more likely to actually graduate. For example, take Northern Michigan University where Caleb Adams. He would end up going only about half the students who attend Northern Michigan University graduate within 6 years of starting at the University of Michigan is about 90% a few years ago did ministrator University of Michigan wanted to increase the number of good students from low-income families that apply to the school. So they approached Sue dynarski to help them out Natsu and her three collaborators Catherine nickel more CJ the bossy and Stephanie Owen already familiar with the current research what that research shows is that low income High achieving students in high school were often disincentivize from applying to an elite College by three main things first the students weren't sure if they were suitable to attend such an elite school. Like they might have worried that their grades weren't good enough for that. The high school wasn't good enough II the students overestimated how much

00:04:35
Cost to attend an elite University 3rd, and I think this is especially relatable. They were intimidated or confused by the bureaucracy of filling out financial aid forms like FAFSA, which is the free application for federal student aid, the financial aid system in our country is set up such that you don't find out about the price of college until you actually applied and been admitted which is bass ackwards Sue and her colleagues ran an experiment and what they wanted to do was designed the simple intervention that could eliminate or at least shrink all of the barriers that were preventing low-income students from applying to the University of Michigan. They started by identifying about 2,000 High School seniors in the state of Michigan who met two criteria for B, students had grades and SAT scores that we're good enough and they would probably be accepted into the University of Michigan if they applied and second their families had incomes below a certain threshold. They were low-income families the researchers then randomly split the students into two different groups.

00:05:35
When was the control group D students did not get the intervention from Sue and her colleagues the students in the second group though who attended a different set of high schools. These students were the treatment group these dudes did get the intervention intervention arrived in the shape of a big glossy packet that the University of Michigan mailed to their homes and inside was a letter that encourage the student to apply. So we decided to push out to people a commitment that they could get four years of free tuition and fees at University of Michigan and they did not need to fill out the FAFSA or the profile is a is another financial aid form that some schools including sadly University of Michigan require of of applicants the students parents and students high schools were also made aware of the offer which was labeled the hail scholarship. The Michigan fight song says the word hail over and over and over.

00:06:32
To be clear. There was no extra money that came with this scholarship. These students would have been eligible for the same financial aid. Anyways, so the intervention from sooner colleagues just Stripped Away that bureaucracy and now we can see how the package was designed to remove those three barriers that often prevented students from applying to Elite schools the package encouraged to apply which reduce their uncertainty about whether they were suitable for the school. Then the offer guarantee that if they got accepted all of their tuition and fees would be covered. So the student would know how much it would cost before applying and the package informed the students that they would still have their tuition covered. Even if they didn't fill out all those cumbersome and intimidating financial aid forms Caleb says there was no way he would have ended up in Michigan if he had not received this packet until I got this package through four years free tuition. And originally we kind of had thought that it was like I didn't I never heard of a hail scholarship or anything like that and like, what's the catch?

00:07:32
Who is what I always thought and actually taking it to my guidance counselor at my school and I was like, hey, have you ever heard of this? And you guys I know are you sure it's real you and your guidance counselor thought it might be a scam. Yeah. Oh, yeah, we had never heard of it before and we just kind of felt like, you know, if it's too good to be true it probably is.

00:07:52
Not too good to be true. It was actually real so Caleb apply to the University of Michigan. He got in and he's now a student whose tuition and fees are covered and he wasn't the only one here is house to describes the outcome of hail scholarship experiment in the first year. It was tried on the 2000 High School seniors about 20 to 25% of the control group applied to University of Michigan while the treatment group. It was about 67% So huge increase in in application rates so much more likely to apply to the University of Michigan. They were all so much more likely to enroll and the experiment led to an additional 150 low-income students enrolling at the University of Michigan in the first year. It was tried as caution that this is just one experiment at one school in one state. She really hopes that other Scholars will conduct similar experiments in other places to better understand the findings.

00:08:51
Still it's a promising start and for Caleb Adams. It's already much more than that. I do think that that scholarship did changed my life female drastically from I mean, so I think I would have had a good life and Northern and I probably would have been a high school teacher.

00:09:10
And now I don't know what I'm going to do to be honest. Let's just say so many opportunities in like chances at 1.

00:09:18
Yeah, I remember what it was like to be young. I know interesting. So wide open podcast host a bus for us a face or a senator is a production of NPR contending AR do produce this episode and it was edited by Patty Hearst.
Translate the current page