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Financial Aid
The nation’s 1,200 community colleges — with their open admission policies and relatively low cost — provide an important pathway to educational and economic opportunity for millions of adults. Yet, despite the benefits of completing a postsecondary education, research shows that of all students who matriculate at community college with the intention of earning a credential, about one-third actually earn an associate’s degree or a bachelor’s degree within six years. The reasons for this are many, but a primary component contributing to students’ academic failure is a lack of adequate financial aid. Among the criticisms of financial aid is that the process of applying for federal aid is needlessly complex; that government aid has not kept up with the rising costs of college attendance; that the various grant, loan, and tax credit programs are duplicative, inefficient, and not always successful in directing federal aid to the neediest students and families. Some people also say that the aid system does not do enough to promote high academic achievement, persistence, or completion.
MDRC’s higher education research agenda focuses on projects that support potential revisions to financial aid policies to help studentspay for college and associated expenses. Specifically, as part of the Opening Doors Demonstration, MDRC spearheaded the evaluation of performance-based scholarships at two community colleges in the New Orleans area. MDRC’s evaluation of the Louisiana performance-based scholarships, as part of our Opening Doors project, found that the program gave students a substantial boost. Building on the success of the program, MDRC launched the Performance-Based Scholarship (PBS) Demonstration in 2008. The goal of the PBS Demonstration is to evaluate whether performance-based scholarships are an effective way to improve persistence among low-income college students in different geographical locations with different amounts of monies over different durations.
MDRC has also looked at two emergency financial aid programs — Dreamkeepers and Angel Fund Program — funded by Lumina Foundation for Education. The idea behind these programs was to provide students with grants or loans to help them address financial crises that might otherwise lead them to drop out of school: loss of a job, a car breakdown, unexpected child care needs, and so forth. MDRC examined the implementation of the programs and the academic progress of emergency aid recipients in a report that was released in May 2008.
More recently, MDRC has begun to explore how the communication, delivery, and design of financial aid could improve postsecondary outcomes for low-income students through the newly launched Aid Success Project. In partnership with The Institute for College Access & Success (TICAS), MDRC is piloting two interventions that are designed to help low-income students persist and succeed in college by better using financial aid and balancing school and employment obligations. One strategy, called Working Smart, involves an online information session to teach students about financial aid opportunities and the relationship between work hours and academic success. The other intervention, Aid Like a Paycheck, will explore whether students benefit from having grant aid disbursed incrementally over the course of a semester rather than as a lump sum near the beginning. The pilots will take place in the 2010-2011 academic year, with the possibility of a full-scale random assignment evaluation beginning in January 2012.
Key Documents on Financial Aid
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