Florida Student Access Grant

Initial program costs are determined by cost of the grant scaled by the number of years of grant receipt. Using the estimates from Castleman and Long (2016), Hendren and Sprung-Keyser (2020) calculate the total grant costs to be $891. Next, Hendren and Sprung-Keyser (2020) account for the additional costs due to increased educational attainment by those eligible for the FSAG. Hendren and Sprung-Keyser (2020) use estimates from Castleman and Long (2016) on the FSAG’s impact on additional years of educational attainment. They calculate government costs per full time enrollee based on data from the Delta Cost Project. This increases costs by $1607. Finally, Hendren and Sprung-Keyser (2020) account for the changes in taxes paid and transfers received based on the earnings gains calculated in the willingness to pay section. That results in a fiscal externality of $1609 and a total net cost of $889.

Combining these estimates, Hendren and Sprung-Keyser (2020) obtain an MVPF of 7.42. To obtain the confidence intervals, they bootstrap the enrollment, earning and tax revenue outcomes. They assume (conservatively) these estimates are perfectly correlated across bootstrap iterations. This leads to a confidence interval of [1.09,\infty].

Hendren and Sprung-Keyser (2020) also consider alternate approaches to calculating the earnings effect and determining willingness to pay. In the case of the earnings effect, they create a specification where their earnings projections are not based on credits completed, but rather initial enrollment and bachelor’s degrees received. Hendren and Sprung-Keyser (2020) assume that these represent distinct groups of recipients and translate each outcome into an increase in years of schooling. In that case they assume that initial enrollment or bachelors degree receipt both result in two additional years of schooling. Hendren and Sprung-Keyser (2020) then apply the same earnings projection method from Zimmerman (2014) using these schooling increases. The resulting MVPF for this alternate specification is 7.67 with a 95% confidence interval of [0.98,\infty]. Hendren and Sprung-Keyser (2020) also consider a specification where the FSAG is valued at the cost of the transfer rather than based on the change in long-term earnings. This conservative method for calculating willingness to pay ignores any effect from increases in earnings. Instead, it applies the envelope theorem to those induced to get more schooling and assumes they are indifferent to the expenditure. All those who do not change their behavior as a result of the scholarship value it as a dollar-for-dollar transfer. The resulting MVPF for this alternate specification is 0.91 with a 95% confidence interval of [0.32,\infty].