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Publius: The Journal of Federalism 1997 27(1):115-134;
© 1997 by CSF Associates Inc.
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Testing Federal Student-Aid Fungibility in Two Competing Versions of Federalism

Jon H. Oberg
Rockville, MD

This study employs twenty-three years of federal, state, and institutional student-aid data to investigate the effects of federal grants to students on the behavior of higher education institutions. Unlike previous studies, this research differentiates between federal-aid programs according to whether a federal program follows "redivision federalism" or "cooperative federalism" concepts. Pell grants, exemplifying the former, appear highly fungible and inversely related to institutional grants to students, while campus-based federal programs, exemplifying "cooperative federalism, " appear less fungible and positively associated with institutional grants. The results also suggest that grants to students are more important to higher education opportunity than indicated by some previous research.


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