Although financial aid has long been recognized for increasing students’ access to college, its potential to encourage academic successis less understood. Few studies have looked at the relationship between financial aid and academic outcomes; a handful of quasi-experimental studies have found compelling relationships between aid and attendance but not longer-term outcomes like credentials or credits earned. While informative, none of these studies are definitive about the relationship between financial aid and academic success, and more work needs to be done to understand whether innovative uses of financial aid can improve academic achievement in the short and long terms.

The Program

MDRC launched the Performance-Based Scholarship Demonstration in 2008 to test an innovative strategy for addressing two policy objectives: increasing financial support available to low-income students and creating an incentive for these students to complete their courses and make more timely progress toward degree. The program was based in part on promising findings on performance-based scholarships studied previously under the Opening Doors program. Since then, MDRC has worked with over 12,000 students, eight institutions, and one intermediary in six states to provide rigorous evidence on whether performance-based scholarships affect academic outcomes. The idea is to provide students a supplement to existing federal and state aid contingent upon enrolling in a minimum number of credits and making passing grades. The scholarships are paid directly to students (rather than to the institutions they attend) to reward students for their progress and allow them to make choices about how best to support their schooling.

Research Design

This study is a randomized controlled trial conducted in six states (n≈12,000). Qualifying low-income college students were randomly assigned by researchers either to receive only their usual financial aid package and services (control group) or to be eligible to receive supplemental financial aid and services in the form of a performance-based scholarship contingent upon meeting the given academic benchmarks (program group). The eligibility requirements varied from state to state, including programs targeted to at-risk groups such as men of color and parents, but all students were low-income.

Findings

Early findings show that these scholarships can have modest, positive impacts on course-taking patterns and markers of academic progress, such as credits earned. In one site, there is preliminary evidence that they can have positive impacts on earning a community college degree or certificate within two to three years after random assignment. If this finding is replicated in other sites, it would be striking, suggesting that initial outlays in targeted aid can produce increases in degree attainment.

Summary

This presentation will provide an early look at program impacts across all six states, as well as the original study. These findings suggest that PBS can have a positive effect on students’ course-taking patterns and decisions to enroll full-time, both of which influence their academic achievement. They also suggest that supplemental funding, not targeted at elite students, could help increase credit accumulation. This presentation will also cover policy implications for these findings in both federal and state contexts.