Doctor of Philosophy (PhD)


School of Education

Document Type



Prior empirical analyses on federal education tax credits have concentrated on the individual and institutional unit of analysis. These outcomes indicate mostly null effects on promoting college enrollments, along with distribution to higher incomes, and mixed results on tuition and fee increases. This analysis utilized institutional and state unit of analysis over a longer timeframe, Tax Year 2001 to Tax Year 2016, using difference-in-differences estimation to analyze the effects of education tax credits. The results indicated states have decreased appropriations to public, two-year institutions (charging less than $4,000) 14% less than their higher-priced counterparts, while states provided more appropriations to public, four-year institutions (charging less than $4,000) than their higher-priced counterparts by 8.9%. Furthermore, low-priced institutions, regardless of sector, increased tuition and fees more so than their high-priced counterparts after the introduction of the generous American Opportunity Tax Credit (AOTC). Low-priced, private institutions increased tuition and fees 10% more than their high-priced counterparts. Low-priced, two-year, public institutions raised tuition and fees 17% more than high-priced equivalents, and low-priced, four-year, public institutions raised tuition and fees 16.6% more than high-priced equivalents.

Finally, this analysis provided new insights into state budgeting by estimating the effects of state aid generosity on total education tax credits received per state, concentrating on the interaction between tax-free scholarships and education tax credits. Utilizing the same difference-in-differences estimation over the same timeframe, high-aid states (providing more than $195 million in aid annually) received less education tax credits than low-aid states before the policy shock, yet received exorbitantly more after the introduction of the AOTC. High-aid states received 1,067% more than low-aid states after the introduction of the AOTC. The analysis also estimated models with and without states with comprehensive aid programs, and the outcomes remained just as large and significant.

These results add to the literature on education tax credits for postsecondary education by providing validation analyses on prior, groundbreaking research and by identifying the true effect of state aid programs on education tax credit receipts. These results should identify a path forward for state budgeting and the possibility of federal-state partnerships for fiscal efficiency.

Committee Chair

Clayton, Ashley