Need-Based Grant Eligibility Can Boost Completion, Study Finds

There’s been a lot of talk lately about using financial aid to increase college completion. But there hasn’t been much research on whether—and how— need-based aid helps students after they enroll.

A new working paper from the National Bureau of Economic Research examines those questions. The paper, “Looking Beyond Enrollment: College Access, Persistence, and Graduation,” investigates the effects of the Florida Student Access Grant, a need-based state aid program, on enrollment and graduation by comparing students who qualified for the grant to those who just missed the cutoff.

Grant eligibility is based on a sharp expected-family-contribution cutoff set by the state, and students right above and below it are in very similar circumstances. As a result, comparing the the two groups “approaches a randomized experiment,” said Benjamin L. Castleman, one of the paper’s authors and an acting assistant professor of education at the University of Virginia.

Because the cutoff is determined by expected family contribution, and not by income, students and their families probably wouldn’t even have known whether or not they qualified for the grant, which was $1,300 for the students the authors studied.

Students who qualified for the grant were 12 percent more likely to enroll in four-year public colleges than those who just missed the cutoff (there was no effect on private-college enrollment). While there was no increase in students’ chances of graduating in four years, those who qualified for the grants were 22 percent more likely to earn a bachelor’s degree in six years than those who missed the cutoff.

The researchers looked at what happened to students who qualified for the grant whether they used it or not. The results would likely have been stronger if the researchers had considered only students who went to college using the aid, said Bridget Terry Long, the paper’s other author. But the researchers were less interested in what happened to students who actually got the money and more interested in the policy implications of the program. “We’ve estimated the impact of the policy itself,” said Ms. Long, a professor of education and economics at the Harvard Graduate School of Education.

Since students who just missed the cutoff for the state grant still were able to receive a federal Pell Grant, the researchers could compare students who got some grant aid with those who got more. The study’s results suggest what would happen if the Pell Grant were increased, Ms. Long said. “We hope this helps to inform some of the policy debates,” she said.

The paper uses data from the Florida Department of Education’s K-20 Data Warehouse, which keeps longitudinal student-level records. The paper considers students who were seniors in Florida public high schools in 1999-2000, attended in-state colleges, and applied for financial aid.

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