Low-income students who receive performance-based scholarships show modest gains in academic achievement, but their retention rates from semester to semester appear unchanged, according to a study released on Tuesday by MDRC, a nonprofit research group.
The study—“Performance-Based Scholarships: What Have We Learned?”—compiles results from the Performance-Based Scholarship Demonstration, a project the group began in 2008 that has extended to 12,000 students in Arizona, California, Florida, Louisiana, New Mexico, New York, and Ohio. The project, designed to increase financial support for low-income students and give them monetary incentives to progress, is supported primarily by the Bill & Melinda Gates Foundation.
In the program, students are paid at various points throughout the semester as long as they take a minimum course load and maintain at least a C average. They can use the money however they want, for books, babysitting, or to pay bills.
The incentives are meant to encourage students to focus on their studies, which should improve their grades. That, in turn, should help them knock off their degree requirements faster so they can graduate or transfer to a four-year college. And better grades, the thinking goes, should translate to better jobs and salaries.
The study tests how well those theories actually play out: The authors consider the results “modest but positive.” Among the findings:
- Recipients of performance-based scholarships are more likely to meet academic benchmarks—generally maintaining a, minimum course load with a 2.0 grade-point average. New York was the exception.
- The program modestly increases the number of credits students earn. The exceptions to that were Florida and New Mexico.
- So far, the performance-based scholarships have shown no effect on persistence from semester to semester.
- In Ohio, the site where the program had been running the longest, performance-based scholarships increased the proportion of students earning degrees or certificates by 3.6 percentage points over a two-year period.
‘No Panacea’
Performance-based scholarships in the demonstration program are granted on top of other financial aid, and they’re based on academic performance in a given term, rather than on a student’s cumulative GPA. The immediacy of the reward is important, said Lashawn Richburg-Hayes, a co-author of the brief.
Ms. Richburg-Hayes leads MDRC’s work in higher education, which focuses on improving low-income students’ chances of success in community colleges and less-selective four-year universities. “If you know that you’ll get a payment for showing up in class, that might be an incentive to get out of bed or to not take on that extra shift at work,” she said.
Meanwhile, Sara Goldrick-Rab, an associate professor of educational-policy studies and sociology at the University of Wisconsin at Madison, has been critical of some of the conclusions MDRC has reached in its Gates-backed studies.
The latest tests “provide solid evidence that performance-based scholarships produce very small impacts, which are often smaller than those observed for need-based programs that do not have performance requirements,” Ms. Goldrick-Rab wrote in an e-mail on Monday. “As the authors note, the impacts on credits earned are quite modest, the impacts on retention appear nonexistent, and estimated impacts on degree completion are again modest and observed in just one site.”
Performance-based programs “are no panacea,” the authors acknowledge in their report. “At every site and in every semester, many students failed to progress academically or dropped out of school altogether,” they write.
Researchers are still seeking programs with greater impact. “None of these reforms have knocked the ball out of the park,” said Ms. Richburg-Hayes. But performance-based scholarships, she argued, are still one positive component of a broader strategy to help low-income students succeed.
Another higher-education policy expert found the new results “quite promising.” Judith Scott-Clayton, an assistant professor of economics and education at Teachers College at Columbia University, said performance-based scholarships are “as good as any ideas we have on how to improve degree completion.”
The average annual payout for students in Ohio was less than $800, she pointed out. “A 3.6-percent impact on degree completion for $800,” she said, “almost certainly passes the cost-benefit test.”
