Impact of state tuition guarantee policy on enrollment in public universities

Purpose This study estimates the effect of the Truth-in-Tuition policy on the enrollment of first-year students, minority students and all students (total enrollment) in Illinois universities. Design/methodology/approach Econometric models yield robust estimates using state- and time-fixed effects. This research uses the nonparametric Difference-in-Difference (DID) method. Variation in the starting of the Truth-in-Tuition policy across the Midwestern states is used as a natural experiment. Findings Results demonstrate that the Truth-in-Tuition policy helped increase freshman enrollment but did not significantly impact minority enrollment. This policy, however, shows a much larger drop in total enrollment in Illinois universities. Originality/value A comparison between regionally competing institutions under different policy regimes was not analyzed earlier.