Dive Brief:
- A new report from a researcher at the University of Massachusetts at Boston analyzes the link between need-based state grant aid and low-income student outcomes.
- The Chronicle of Higher Education reports Ray Franke’s innovative study finds that every $1,000 in such aid increases a low-income student’s chances of persisting beyond their freshman year by 4.6% and of graduating within six years by 7.7%.
- The analysis controls for student characteristics as well as differences among colleges, comparing states that allocate mostly need-based aid with those that do not.
Dive Insight:
Many low-income college students exist in a tenuous state of near-emergency. They do not have a cushion that allows them to absorb financial surprises, like higher-than-expected textbook costs or car trouble. Some institutions have set aside a portion of financial aid funding for emergency grants. Even when this funding is as little as $100, it can make the difference between staying in school and dropping out. The most common reason for low-income students to drop out of their programs is financial trouble.
Many state flagships have begun allocating more non-need-based aid in an effort to attract high-performing out-of-state students. The “arms race,” as it has been called, is expected to hurt the chances of low-income students, who are necessarily affected by a zero-sum game of financial aid allocation.