Association for Public Policy Analysis & Management

Financial aid has long been recognized for increasing students’ access to college, but its impact on students’ academic success, particularly for long-term outcomes such as degree-completion, is less understood. MDRC launched the Performance-Based Scholarship Demonstration in 2008 to test an innovative strategy for addressing two policy objectives: increasing the financial support available to low-income students, and creating an incentive for such students to complete their courses and make more timely progress toward degrees. The idea is to provide a supplement to existing federal and state financial aid that is contingent on enrolling in a minimum number of credit hours and making passing grades. The performance-based scholarships are paid directly to students (rather than to the colleges or universities they attend) in order to reward students for their progress and to allow them to make choices of how best to support their schooling. For some, this may mean buying books or paying for transportation to campus; for others, it may mean cutting back on work hours or hiring a babysitter for their children during finals week.

This presentation will cover findings from randomized controlled trials of performance based scholarships conducted in six states as part of the demonstration. Qualifying low-income 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. Early findings showed that these scholarships can have modest, positive impacts on course-taking patterns and key markers of academic progress, such as credits earned. In one site, previously released findings suggest that performance-based scholarships decreased students’ time-to-degree.

This presentation will describe the final, pooled findings from across the six demonstration sites, with an emphasis on long-term findings for degree and certificate completion, persistence, and credit accumulation. More than 12,000 students participated in the studies, and the findings described in this presentation include up to five years of follow-up data for long-term outcomes. The presentation will also include findings from implementation research at the sites and from subgroup analyses to examine whether the programs were more effective for particular student subgroups. Policy implications for these findings in both federal and state contexts will also be discussed.