When high schoolers pass Advanced Placement (AP) exams, they can earn college credits, making them more likely to complete college within four years and likely increasing their earnings in adulthood. Fees of $99 per exam, however, deter many students from participating. In response, both the College Board and the federal government partially subsidize fees for low-income students, and states have increasingly moved to do likewise. Evaluating the efficacy of one variation on such policies, researchers from Johns Hopkins University and George State University recently published a study examining the effects of North Carolina’s AP exam fee waiver, which covers costs for all Tarheel students taking these exams.
Drawing data from the North Carolina Education Research Data Center and the College Board, the authors used a sample of 556,514 student-AP course enrollments between 2010–11 and 2016–17. Using a quasi-experimental design called difference-in-differences, they contrasted outcomes—AP exam participation and pass rates—between the periods immediately prior to and immediately following the 2014–15 implementation of universal AP fee coverage. The researchers controlled for factors including student demographics, prior academic achievement, grade level, and subject. Districts that received a bundle of additional AP-related services during this period (such as specialized teacher training) were excluded from the study.
Among the overall population, universal fee waivers increased AP exam participation without significantly affecting the likelihood of a student earning a passing score. This suggests that the new waiver recipients were just as qualified as those previously taking the exam (if they were underqualified, presumably the pass rate would have dropped). Also encouraging: Among low-SES students, the fee waivers led to a statistically significant 3.3 percentage point increase in exam pass rates compared to otherwise similar high-SES peers.
The policy’s impact on exam pass rates varied by subject. For the AP exams that students were previously least likely to take, the waivers prompted not only greater exam participation, but also a 6 percent average increase in pass rates. Among the previously “underutilized” subjects with the biggest pass rate gains were macroeconomics and Spanish literature, both widely accepted options for college credit.
Then, to calculate the return on investment (ROI) for these waivers, the researchers divided the predicted gain in lifetime earnings from taking the exam (i.e., how much more will a student likely earn if they take the exam?) by its net cost to the state. For each state dollar spent, a waiver targeting only low-SES students would deliver $2.11 in benefits to each of those AP course enrollees, and a universal waiver would deliver $2.64 to each AP course enrollee.
Ultimately, the study’s authors advocate a universal waiver policy. They base this recommendation on the higher ROI for the universal waiver, along with concern that a narrower policy might rely on “coarsely-defined” categories, such as low-income districts or low-participation AP exams, and would therefore miss many students who would otherwise benefit.
Still, skeptics might wonder whether states would nonetheless be better served by targeting waivers toward economically disadvantaged populations. When it comes to ROI, for example, is it really a worthy use of taxpayer dollars to boost the lifetime earnings of students who aren’t low-SES? And while it’s true that a poorly targeted policy would miss many students, most states with AP waiver policies seem to target individual students effectively, relying on free and reduced-price lunch eligibility, USDA low-income thresholds, residence in federally subsidized public housing, and similar designations.
Whether states want to invest in waivers for all their students remains an open question, and one that leaders will need to grapple with—including in North Carolina itself, where legislators have recently proposed such a revision to their current policy. But what’s clear from the findings is that fee waivers give low-SES students greater opportunity to prove what they’ve learned: With waivers, they not only take AP exams at higher rates, but they also pass them at higher rates compared to their more advantaged peers. That’s validation for the 19 states (and the District of Columbia) that already fully cover AP exam fees for low-SES public school students, and it should be a nudge to the other 31.
SOURCE: Md Twfiqur Rahman and M. Cade Lawson, “Removing Barriers to College Credits: Where and for Whom AP Exam Fee Waivers Work,” Annenberg Institute at Brown University (November 2025).
