Journal of Undergraduate Research
Volume 6, Issue 2 - October 2004

Effects of the Florida Bright Futures Scholarship

Emily Wilbanks

DOES STUDENT QUALITY AFFECT THE QUALITY OF THE SCHOOL?

All colleges and universities strive to attract the highest quality students to their institutions. Why is it that colleges value student quality so highly? It could be that the quality of a college’s students directly increases the overall quality of the school by virtue of a feedback effect where high quality students attract yet other high quality students to attend.

In the case of higher education, the quality of the customer, the student, actually affects the quality of the firm, the university. Some economists refer this to as “customer-input” production technology and it helps to explain why colleges are so interested in the quality of their students. In order to gain higher overall quality ratings, most colleges are willing to restrict their supply by limiting enrollment in the face of a large demand for higher education because they can thus be selective and only admit the highest quality applicants (Goethals et al. 1999). Colleges are willing to forego the potential profit gained from students it turns away in order to maintain the higher overall quality of the student body by being selective.

Selective universities attract high quality students for various reasons. For some students, being among high quality peers at a selective university gives them a sense of elevated status and accomplishment and thus raises the utility of choosing that school over alternatives that are less selective. High quality students also strive to be among high quality peers because they have the opportunity to network and make connections in college that will be beneficial in their future careers. There is also the possibility of “peer effects.” Peer effects are still being investigated, however there seems to be evidence that students learn from other students (Goethals et al. 1999).

Several experiments exploring peer effects can be found in the literature. In one case, students’ ability to write a written response to a New York Times article was compared among similar students who were allowed to discuss the article first with either a group of “high quality” peers or a group of “lower quality” peers. The tested students performed better when among high quality peers (Goethals 2000). In another study, freshmen GPA was compared among similar students who were purposefully paired with a higher or lower quality roommate in the dorm. Students with better roommates maintained higher GPAs (Zimmerman 1999).

The social comparison theory, described by Festinger in 1954, states that people learn from one another by observation and imitation. It is reasonable to believe a student might learn better study or time-management habits or might become more academically successful by observing a superior peer. Also, through interaction with peers people tend to evaluate themselves. In studies, comparing oneself to those more able tends to increase an individual’s aspirations and comparing oneself to those less able tends to decrease an individual’s aspirations (Goethals 2000). College is an impressionable time, so being among high quality peers is important.

Previous research has shown that high quality students, although still heavily influenced by the potential benefits of peer effects and college prestige, may be influenced by the prospects of a “bargain” (Winston 2000). Therefore, student financial aid influences college choice, and incentives such as the Florida Bright Futures scholarship are important.

Some may argue that merit-based subsidies are not important, because high income students spend only a small portion of annual income to fund education, and low income students are eligible for need-based aid. However, middle-income families do not fall into either category because their annual incomes are too high to qualify for need-based scholarships, but are too low to easily pay for education out-of-pocket. For the middle-income family, the cost of a child’s tuition may amount to a very large proportion of the family’s annual income. This phenomenon is known as “middle-income melt.” Without merit-based scholarships, very bright students from the middle-income families may not have the opportunity to attend college. In that case, both the student and the university system will suffer (McPherson and Schapiro 1994). Merit-based scholarships like Florida Bright Futures can help alleviate these problems.

HAS ITS MERIT-BASED SCHOLARSHIP ENCOURAGED FLORIDA'S BRIGHTEST HIGH SCHOOL STUDENTS TO REMAIN IN STATE?

The Florida Bright Futures Scholarship (FBF) is a merit-based scholarship that rewards Florida high school students for their academic achievements. One concern among educators in Florida’s is its ability to keep top high school students in state for their post-secondary education and thereby to maintain the quality of its universities.

If FBF has been a factor that students weigh when choosing their institution of higher education, it is expected that in-state attendance should have increased in Florida following the creation of the scholarship in 1997. Residency data obtained from the Florida Department of Education for first-time-in-college (FTIC) students admitted to the regular fall terms of Florida universities show an upward trend in resident attendance (Figure 1). The rate at which the in-state attendance was increasing nearly doubled after 1997. It is important to recognize that the overall increase has been small, though the change in growth rate following 1997 is noteworthy.

Figure 1. The average percentage of first-time-in-college students in the regular Fall term at schools in Florida’s State University System

Figure 1. The average percentage of first-time-in-college students in the regular Fall term at schools in Florida’s State University System (collectively for all 4-year state colleges) that were Florida residents over time (Florida Department of Education, 1994-2000).

The data also show that attendance of Florida residents at Florida universities is correlated with state funding of non-need based financial aid (r2= 0.93, p= 0.00041, _= 0.05) (Figure 3) (Almanacs 1995-2002, Facts and Figurers” 2003). It is obvious that a merit-based scholarship program, funded by the state lottery, like FBF increases state spending on non-need based financial aid. Since spending is correlated with resident attendance, it is expected that attendance rose when FBF was created (Figure2). The significant positive correlation shows that FBF has influenced the ability of Florida’s universities to attract the top high school students in the state.

Figure 2. The level of state spending, in millions of dollars, on non-need based student financial aid and the average percentage of first-time-in-college students at state universities who were Florida residents over time

Figure 2. The level of state spending, in millions of dollars, on non-need based student financial aid and the average percentage of first-time-in-college students at state universities who were Florida residents over time (The Chronicle of Higher Education 2003 and Florida Department of Education).

Figure 3. The regression plot of average percentage of in-state students on level of non-need based funding, in millions of dollars

Figure 3. The regression plot of average percentage of in-state students on level of non-need based funding, in millions of dollars (The Chronicle of Higher Education 2003; Florida Department of Education). Average percent of in-state students attending state universities is significantly correlated with the level of spending by the state on non-need scholarships (r2= 0.93, p= 0.00041, _= 0.05).

The question now is whether this has had any effect on university quality in Florida. Since the quality of students at a university should directly influence the overall quality of the university, as discussed above, the retention of high quality students in Florida should have increased the quality of Florida colleges since FBF was initiated in 1997. Two possible measures of improvement of university quality are heightened admission standards of universities across the state and improved student performance at those universities.

A widely accepted determinant of admission standards is the average SAT score of the newly admitted freshmen. Selective schools should higher quality students. Theoretically, a merit-based scholarship should allow state universities to be more selective by both increasing the pool of applicants from which they choose and by encouraging the state’s top high school students to apply. If this is true, the average SAT scores for FTIC students admitted to Florida universities should increase following the creation of FBF. The data from the Florida Department of Education concerning average freshmen SAT scores do not show such a trend (Figure 4). The average test scores of freshmen were also not correlated with state spending on non-need based scholarships as might be expected (r2=0.098, p= 0.49, _= 0.05) (Figure 5).

Figure 4. The average combined verbal and math SAT score for newly admitted first-time-in-college students at Florida universities in the regular fall terms over time

Figure 4. The average combined verbal and math SAT score for newly admitted first-time-in-college students at Florida universities in the regular fall terms over time (Florida Department of Education).

Figure 5. The regression plot of average SAT scores of first-time-in-college students admitted to the regular fall term of Florida universities on the level of non-need based spending by the state in millions of dollars

Figure 5. The regression plot of average SAT scores of first-time-in-college students admitted to the regular fall term of Florida universities on the level of non-need based spending by the state in millions of dollars (Florida Department of Education; The Chronicle of Higher Education 2003). The correlation is not significant (r2=0.098, p= 0.49, _= 0.05).

The SAT scores may not be telling the whole story, however. It is surprising that SAT scores have remained so constant since 1996 (Figure 4), but this could be due to the fact that the scores calculated are averages for all state universities. It is possible that all schools do not profit equally from FBF. Since high quality education is ultimately the product offered by universities, higher quality is commonly higher priced. For high quality students that fall victim to the so-called middle-income melt discussed in part one (McPherson and Schapiro 1994), attending an expensive college may be out of the question. Attending a lower priced, possibly lower quality school may be the only feasible option. The existence of a merit-based scholarship like FBF affords middle-income students that find themselves in such a predicament the opportunity to attend higher priced, and maybe higher quality, universities than was possible before.

Under such reasoning we expect to see the major public universities benefit more than the smaller public universities from a merit-based scholarship. If this is the case, the average freshmen SAT scores for larger state universities should increase due to increased selectivity (this is examined in a case study below). The opposite may occur for smaller, less expensive schools because they will lose the applications of some students who will now apply to the larger schools. Losing these students, who are now able to attend the state university of their choice, should decrease the average SAT scores of the freshmen at those schools. If the increases in freshmen SAT scores at large universities closely mirror the decreases in freshmen SAT scores at smaller universities, the average freshmen SAT scores for all of the public universities in the state could remain fairly constant. This may well be the case observed here, although the data would warrant further scrutiny.

A second possible indicator of changing university quality is student performance while in college. This can be extremely difficult to measure, although analyzing graduation rate and student GPA at the state universities may help shed some light on the issue.

Graduation rate was correlated with the level of non-need based spending on student financial aid (r2= 0.65, p= 0.028, _= 0.05)(Figure 6). The average graduation rate at Florida universities, therefore, increased as a result of FBF (“Almanacs 1995-2002, Facts and Figurers” 2003). FBF requires students to maintain high quality academic performance while at college in order to retain the scholarship. This should improve student effort and raise the quality of student work, thus increasing the percentage of students making it to graduation. Also, peer effects, discussed in part one, may increase total student performance (Goethals 2000; Goethals et al. 1999; Zimmerman 1999). An increasing graduation rate is indicative of increased student effort and, in turn, increased school quality. The increase in graduation rate is, however, somewhat slight across all public universities. This is due to the same effects plaguing the SAT data concerning differing effects based on university size and tuition discussed previously.

Figure 6. The regression plot of average graduation rate for all colleges in Florida’s State University System on the level of non-need based spending by the state in millions of dollars

Figure 6. The regression plot of average graduation rate for all colleges in Florida’s State University System on the level of non-need based spending by the state in millions of dollars (The Chronicle of Higher Education 2003). The correlation is statistically significant (r2= 0.65, p= 0.028, _= 0.05).

A specific case study of one of Florida’s largest public universities helps to clarify the positive effects of FBF on university quality. The changes in the quality of students admitted, as measured by freshmen SAT scores, and the performance of students at the university, as measured by college GPA, following the implementation of FBF are more pronounced at larger universities. This is the case at the University of Florida, for example.

Admission standards at the University of Florida have increased over time, judging by the increase in FTIC SAT scores for regular fall admits over time (“University of Florida Fact book” 2003) (Figure 7). More interestingly, the average SAT scores of University of Florida freshmen prior to the state legislature’s approval of the FBF in 1997 were significantly lower than the average SAT scores after 1997 (Mann Whitney U-test: U=1, R1= 29, N1= 7, R2=49, N2=5, p<0,05). The higher test scores may reflect the ability of the school to be more selective in admitting only the highest quality students due to the increased application pool generated by the merit-based scholarship.

Figure 7. The increasing trend of the average freshmen combined SAT scores at the University of Florida over time

Figure 7. The increasing trend of the average freshmen combined SAT scores at the University of Florida over time (University of Florida Fact book 2003). The difference between SAT scores after 1997 and prior to 1997 is significant (Mann Whitney U-test: U=1, R1= 29, N1= 7, R2=49, N2=5, p<0.05).

To rule out the possibility of a national increase in average SAT scores having caused the increases observed in freshmen admitted to the University of Florida, the scores before and after 1997 were compared to the scores for students across the nation. The University of Florida Fact book contains data on the percentage of UF freshmen who scored a 600 or above in the verbal section or the math section of the SAT. The database also contains information about the percent of all students in the nation that scored a 600 or above in either section. The percentage of University of Florida students was greater than the percentage of all students who took the test and scored above 600 for both the verbal and the math sections in every year from 1990 to 2002 (Figures 8 and 9). More interestingly, the difference between the percentage of University of Florida students who scored 600 or above and the national percentage was greater in the years after FBF began than it was before 1997. The difference in UF students’ superiority over the national average before and after 1997 was statistically significant for both verbal and math scores (Mann Whitney U-test: U=0, R1= 28, N1= 7, R2=50, N2=5, p<0.05). Since the SAT scores of UF students increased faster than the nation on average after 1997, it appears that the University of Florida was able to be more selective and increase the quality of its admits.

Figure 8. The percent of University of Florida first-time-in-college students who scored 600 or above on the verbal portion of the SAT as compared to the percent of all students who took the SAT that scored 600 or above

Figure 8. The percent of University of Florida first-time-in-college students who scored 600 or above on the verbal portion of the SAT as compared to the percent of all students who took the SAT that scored 600 or above (University of Florida Fact book 2003). The difference between the national average and UF students was significantly greater after 1997 than before (Mann Whitney U-test: U=0, R1= 28, N1= 7, R2=50, N2=5, p<0.05).

Figure 9. The percent of University of Florida first-time-in-college students who scored 600 or above on the math portion of the SAT as compared to the percent of all students who took the SAT that scored 600 or above

Figure 9. The percent of University of Florida first-time-in-college students who scored 600 or above on the math portion of the SAT as compared to the percent of all students who took the SAT that scored 600 or above (University of Florida Fact book 2003). The difference between the national average and UF students was significantly greater after 1997 than before (Mann Whitney U-test: U=0, R1= 28, N1= 7, R2=50, N2=5, p<0.05).

By admitting high quality students, you expect to attain higher performance from the students, which in turn increases the prestige and reputation for the quality of the college as a whole. This is true in the University of Florida case as well. Freshmen SAT scores and student GPA are correlated (r2= 0.75, p= 0.00014, _= 0.05) (“University of Florida Fact Book 2003”) (Figure 10). Since the admission standards at the University of Florida increased significantly after the Florida Bright Futures Scholarship was introduced, it is expected that student GPA should also be significantly higher post-1997. This was observed in the data (“University of Florida Fact Book” 2003). The average student GPA was significantly higher after 1997 than before (Mann Whitney U-test: U=0, R1= 28, N1= 7, R2=50, N2=5, p<0.05).

Figure 10. The regression plot of average student GPA on the average freshmen SAT scores at the University of Florida

Figure 10. The regression plot of average student GPA on the average freshmen SAT scores at the University of Florida (University of Florida Fact book 2003). The correlation is statistically significant (r2= 0.75, p= 0.00014, _= 0.05).

CONCLUSION

By accepting the notion that high quality students truly do add quality to their university, we can begin to see the benefits that the FBF scholarship has brought to the state of Florida and its students. Since its implementation, the percentage of Florida residents at state universities has increased and, because those students are the crème of the high school crop, the performance of students at those schools has increased. Colleges have been afforded the opportunity to be more selective in the students they choose to admit due to the larger application pool, and admission standards have increased on average across the state. More students are making it through to graduation from state universities, and the average student GPA has increased at schools like UF.

Despite the possible mal-effect on lesser schools, providing a merit-based scholarship has produced predominantly positive effects for both universities and students. Students that choose to work hard in high school deserve the chance to earn a college scholarship independent of their socioeconomic background. College is a serious investment for most families, and effort and achievement should not go un-rewarded. There has been much discussion about making the Florida Bright Futures Scholarship need-based instead of merit-based. Such an action would not have created the increases in university quality and student performance seen here. A merit-based scholarship such as Florida Bright Futures has the potential to benefit both the students and the post-secondary education system on a whole.

REFERENCES

  1. “Almanacs 1995-2002, Facts and Figurers.” The Chronicle of Higher Education. 2003. <http://chronicle.com>.
  2. “Fact books.” (My) Florida Department of Education. 2003. <http://www.fldcu.org>.
  3. “Florida Bright Futures Scholarship Program.” Florida Department of Education. 2002. <http://www.firn.edu/doe/brfutures/bffacts.htm>.
  4. “Florida’s Bright Future Scholarship Program Helps Students.” 2001. <http://www.scps.k12.fl.us/community_involvement/index.cfrn?fuseaction=scholarship>.
  5. Goethals, G.R. “Social Comparison and Peer Effects at an Elite College.” Williams Project on the Economics of Higher Education. 2000.
  6. Goethals, G., G. Winston, and D. Zimmerman. 1999. “Students Educating Students: The Emerging Role of Peer Effects in Higher Education.” Williams Project on the Economics of Higher Education. 1999.
  7. McPherson, M.S. and M.O. Schapiro. “College Choice and Family Income: Changes Over Time in the Higher Education Destinations of Students From Different Income Backgrounds.” Williams Project on the Economics of Higher Education. 1994.
  8. “University of Florida Fact Book.” Office of Institutional Research, Data Administration. 2003. <http://www.ir.ufl.edu/facts.htm>.
  9. Winston, G. C. “The Positional Arms Race in Higher Education.” Williams Project on the Economics of Higher Education. 2000.
  10. Zimmerman, D.J. “Peer Effects in Academic Outcomes: Evidence From a Natural Experiment.” Williams Project on the Economics of Higher Education. 1999.

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