Effects of Test-Optional Admissions on Underrepresented Minority Enrollment and Graduation

A growing number of colleges and universities have made the submission of college entrance exam scores optional for undergraduate admissions to bolster racial diversity. This study uses a panel of liberal arts colleges from IPEDS and applies a two-way fixed effects approach to determine whether the policy is effective at achieving this goal. It also estimates the impact of the policy on the graduation rates for underrepresented minority (URM) students. It finds that the policy bolsters freshman URM enrollment among test-optional institutions throughout the sample as a whole, regardless of admissions selectivity and early versus late treatment timing. The effects of this policy on the URM 4-year and 6-year graduation rates are heterogeneous across colleges by their selectivity in admissions. While the most selective colleges in the panel experience no change in URM graduation rates, less-selective colleges experience declines in these graduation rates