Georgia's HOPE Scholarship is a merit-based aid program intended to provide educational resources for qualified Georgia residents who attend college within the state. The sole determinant of HOPE eligibility is high school grade point average (GPA), which may differ by school district (county). The subjective nature of GPAs gives localities the ability to increase the consumption of education subsidies by lowering academic standards. Consistent with this analysis, the authors find systematic differences in grade assignments across counties, and proxies for local interest group pressure for grade manipulation are associated with greater HOPE eligibility.
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