Research shows need-based financial aid influences funding distribution in undergraduate students, suggesting it does not affect institutional or major choices.
Using administrative data from Canada, this paper presents new evidence on the causal effects of a large‐scale need‐based financial aid program on undergraduate students' educational decisions and outcomes, including the understudied institution and major choices. The program results in a significant difference in the composition of aid—students below the income thresholds receive more grants than loans compared to those above the threshold. Employing a regression discontinuity design, we find little evidence that grant eligibility influences students' initial choice of institution or major, persistence, major switching or degree completion.
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Qian Liu (2025) studied this question.
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