Study Assesses Effects of Financial Aid on College Student Success

Scholarships alone may not be enough to help college students succeed, a study finds.

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A new study looks at whether scholarships can influence students’ overall academic behavior.
A new study looks at whether scholarships can influence students’ overall academic behavior.

Can scholarships alone help students succeed? That's the question that social policy think tank MDRC asks as part of its Performance-Based Scholarship Demonstration, which is testing six programs across the country

While the study is not yet complete, MDRC recently published findings from two community colleges in its report, "Can Scholarships Alone Help Students Succeed? Lessons from Two New York City Community Colleges." The results revealed some factors that affect students' ability to pursue higher education and succeed in that pursuit.

The study defines performance-based scholarships as those granted to students based on financial need, where students had to meet certain academic goals in order to continue receiving the grants. According to MDRC, making additional financial aid contingent upon certain behaviors can lead to "an increased effort toward studies, a reduced level of financial stress, and an increased confidence on the part of students in their ability to succeed."

All of these may cause an increase in enrollment and credits earned over the long term, enabling students to meet their educational goals.

[Learn which colleges give the most need-based financial aid.]

In New York, the organization tested a "scholarship-only program" by providing scholarships but no counseling or additional support services. The program targeted "students in need of at least one level of developmental education who may be particularly at risk of not having enough funds to cover their college expenses (identified as low-income adult learners due to the struggles they often face, including "having to contend with competing responsibilities involving work, family and school") and tested whether scholarships alone (without additional support) could help them succeed.

The study looked at students' behavior and performance while they were eligible to receive the scholarships and over four semesters (two years) afterward, to see if the scholarships affected future performance.

The scholarships were distributed incrementally as students met enrollment and academic benchmarks. One group was eligible to receive up to $1,300 over two semesters, while another was eligible for up to $3,900 over three semesters (two main semesters with a summer term in between). The study also followed a third set of students, who did not receive the scholarships, for comparison.

[These 10 colleges offer most students merit aid.]

When evaluating all participating students at both schools, MDRC found that the overall program encouraged more full-time enrollment while students were eligible for the funds, but didn't have the same effect afterward when funds couldn't be earned. Eligibility for a scholarship over the summer may have increased registration (and completion) over that term, but didn't result in future registration for more semesters or the accumulation of more credits in the long term.

But when looking at each school separately, researchers also found some evidence that at one of the colleges, increased registration, full-time enrollment, and the number of credits earned continued even after students were no longer eligible to receive funds. At that school, scholarships were housed in the student services division; while no counseling or support services were provided, students could learn about those services in the same place they inquired about their scholarships.

In contrast, the other school housed the scholarship program in the financial aid office, which did not offer information about additional support services.

[Discover how to clinch a great financial aid package.]

While these findings are only exploratory, because the study was not designed to test this difference, they reveal that the availability of counseling and support may play a significant role in students' success.

Perhaps the most important takeaway is a question: Why didn't the scholarships have a greater impact? Researchers identified a few possibilities: maybe scholarships aren't enough given the struggles faced by low-income students; maybe the scholarship itself was too small (especially given the cost of living in New York City); and maybe the award holds different levels of significance based on personal circumstances (a longer-lasting impact was seen in students who were more likely to be receiving government benefits).

While college costs must be addressed if we wish to increase access and completion, expanding the availability of funds alone may not be the solution. That solution must account for the struggles faced by students. External assistance and resources (such as childcare), and support services at schools play a large role in making a difference.

Radhika Singh Miller is a program manager for Educational Debt Relief and Outreach at Equal Justice Works. In 2008, she served on the Student Loans Team in the Negotiated Rulemaking for the College Cost Reduction and Access Act (CCRAA) and has extensive knowledge of this landmark legislation. She conducts educational webinars and presentations; advises schools and organizations; and advocates for legislation and policy. Prior to joining Equal Justice Works, Miller was a staff attorney at the Partnership for Civil Justice in Washington. She received her J.D. from Loyola Law School Los Angeles.