The Effect of State Financial Aid Policies on College Completion

The Effect of State Financial Aid Policies on College Completion by Sheri E. Ragland MPA, Columbia University, 2009 BS, Kent State University, 1999 Doctoral Study Submitted in Fulfillment of the Requirements for the Degree of Doctor of Philosophy Public Policy and Administration Walden University February 2016 Abstract In 2008, state legislatures provided $6 billion in financial aid to 2 million low-income young adults. When low-income young adults receive state financial aid and do not complete college, states lose their investment because fewer people with degrees will contribute to the state’s economy. Declining states’ budgets have led to (a) the rising cost of higher education, (b) state merit-based aid that has targeted nonminority students from affluent backgrounds, and (c) state need-based aid that has targeted students further along in their college career. State needand merit-based aid may contribute to the lack of college completion among low-income freshman students who rely on financial aid. The purpose of this study was to explore the differences between state needand merit-based aid as enrollment factors of low college completion among low-income students in the U.S. This study was grounded on Tinto’s model of social integration. Secondary data collected by the National Center for Education Statistics on 101,000 freshmen who attended 1,360 postsecondary institutions in 2003-04 and 2008-09 were used for this study. Logistic regression was used to test and compare two models. Logistic regression tested the relationship between the predictor variables of state needand merit-based aid and degree completion. This study’s results revealed that state merit-based aid had a greater predictive value than state need-based aid as enrollment factors of college completion among low-income young adults. This study contributes to positive social change by providing state policy makers with research results to evaluate and formulate state financial aid policies that will increase access to financial aid and college completion rates among low-income freshman students.In 2008, state legislatures provided $6 billion in financial aid to 2 million low-income young adults. When low-income young adults receive state financial aid and do not complete college, states lose their investment because fewer people with degrees will contribute to the state’s economy. Declining states’ budgets have led to (a) the rising cost of higher education, (b) state merit-based aid that has targeted nonminority students from affluent backgrounds, and (c) state need-based aid that has targeted students further along in their college career. State needand merit-based aid may contribute to the lack of college completion among low-income freshman students who rely on financial aid. The purpose of this study was to explore the differences between state needand merit-based aid as enrollment factors of low college completion among low-income students in the U.S. This study was grounded on Tinto’s model of social integration. Secondary data collected by the National Center for Education Statistics on 101,000 freshmen who attended 1,360 postsecondary institutions in 2003-04 and 2008-09 were used for this study. Logistic regression was used to test and compare two models. Logistic regression tested the relationship between the predictor variables of state needand merit-based aid and degree completion. This study’s results revealed that state merit-based aid had a greater predictive value than state need-based aid as enrollment factors of college completion among low-income young adults. This study contributes to positive social change by providing state policy makers with research results to evaluate and formulate state financial aid policies that will increase access to financial aid and college completion rates among low-income freshman students. The Effect of State Financial Aid Policies on College Completion by Sheri E. Ragland MPA, Columbia University, 2009 BS, Kent State University, 1999 Doctoral Study Submitted in Partial Fulfillment of the Requirements for the Degree of Doctor of Philosophy Public Policy and Administration Walden University February 2016 Dedication This research is dedicated to my parents, who were the greatest humanitarians I have known and gifts from God. I witnessed their tireless inspiration to hundreds of underserved minority youth and adults by providing excellent medical services, counseling, education, mentoring, scholarships, sponsorships, time, and care to their community. This research is also dedicated to minority students who have a vision to succeed in higher education and lack the resources to do so. Acknowledgments First, I would like to thank God for helping me to complete this doctoral journal by faith. In Him, all things are possible. I am very thankful for a supportive family and husband who understands that education should be an affordable opportunity as well as a choice and not a privilege for all who want to pursue it. Thanks to the National Center for Education Statistics for guidance on data the institution provided for this study. I also want to thank Dr. Singh as an inspiring mentor throughout the dissertation review and Dr. Shepeard with thoughtful feedback and guidance on the doctoral process. I would like to thank Walden University’s support staff for making the doctoral process an achievable goal.