Academic Competitiveness Grants (ACG) were intended to encourage students to take more challenging courses in high school.  National SMART Grants were intended to encourage postsecondary students to take college majors in high demand in the global economy, such as science, technology, engineering, and mathematics (STEM) and critical foreign languages.  The ACG and SMART Grant programs, authorized under Title IV of the *Higher Education Act*, ended at the end of the 2010-11 academic year, and no funds were appropriated for these programs in FY 2011.

# Research Questions 

1. What implementation issues were encountered and how were they addressed?

2. How many students received each type of grant, how much did they receive, what types of institutions did they attend, and how did the numbers change over time?

3. How many recipients re-qualified for each grant for a second year?

4. How do college persistence rates for ACG and National SMART Grant recipients compare with those of Pell Grant-only recipients?

# Study Design

The review of implementation issues is based on examination of documentation from negotiated-rulemaking sessions held in early 2007, interviews with representative stakeholder organizations, and reviews of stakeholder websites.  The description of participation in the grant programs used federal administrative data on Pell Grant, ACG, and National SMART Grant participation from 2006-07 through 2009-10  provided by the Office of Federal Student Aid.

**Highlights**

· The number of ACGs more than doubled over the first four years of the program, driven largely by increases in the number of Pell Grant recipients and expanded eligibility.  

· The number of students receiving a National SMART grant was relatively stable during the first three years of the program, and then increased substantially in 2009–10.  

· The percentage of students receiving ACG or National SMART Grants remained low (10–12 percent and 5–7 percent of Pell Grant recipients, respectively).

· National SMART Grant renewal rates were substantially higher than the ACG renewal rates (52 to 58 percent vs about 25 percent).  Students who achieved a 3.0 GPA, or higher, over three years of study would be expected to meet the renewal requirements more easily than first-year students.  

· First-year ACG recipients and third-year National SMART Grant recipients persisted in college at higher rates than their counterparts with only a Pell Grant. ACG and National SMART Grant recipients are among the most academically qualified Pell Grant recipients and therefore would be expect to persist at higher rates than students who did not meet the academic qualifications for the grants. 

# Participation  

**The number of ACGs more than doubled over the first four years of the program, driven largely by increases in the number of Pell Grant recipients and expanded eligibility.**

The percentage of Pell Grant recipients with an ACG remained low (between 10 and 12 percent).  However, it  was higher at public and private nonprofit four-year institutions (30 and 28 percent, respectively in 2009–10) than at other types of institutions (between 2 and 9 percent in 2009–10).

**The number of students who received a National SMART grant was relatively stable during the first three years of the program, and then increased substantially (by 79 percent) in 2009–10, exceeding Pell Grant growth.**

The percentage of Pell Grant recipients that received a National SMART Grant increased in 2009–10, when 7 percent of third- and fourth-year Pell Grant recipients received a National SMART Grant, up from 5 percent in the first three years.  This reflected, at least in part, expanded eligibility for these grants.  

# Renewals  

**About one-quarter of first year ACG recipients received another ACG their following year.**

To receive an ACG as a second-year student, a first-year ACG recipient had to meet the same requirements as in the first-year and also have a cumulative 3.0 GPA at the end of the first year.  Many recipients did not meet the conditions required to renew their ACG grants the following year. (See comments on pages xvii and 35 of report)

**National SMART Grant renewal rates were substantially higher than the ACG renewal rates, and students who had reached their third year with a 3.0 GPA would be expected to meet the renewal requirements at higher rates than first-year students.**

More than one-half of third-year students who received a National SMART Grant received another one the following year (54 to 58 percent, depending on the year).  To receive another National SMART Grant in their fourth year, third-year National SMART grant recipients had to re-qualify for a Pell Grant;****enroll full-time in an eligible major and take courses meeting requirements for that major each term in which the grant is received; and maintain a cumulative 3.0 GPA. 

# College Persistence  

**First-year ACG recipients and third-year National SMART Grant recipients persisted in college at higher rates than their counterparts with only a Pell Grant.**

Because a Pell Grant renewal indicates that a student is known to have persisted to the following year, this analysis examines Pell renewal rates for Pell recipients with and without an ACG or SMART Grant.  For example, among first-year students who received both an ACG and a Pell Grant in 2008–09, 79 percent received another Pell Grant in 2009–10 (with or without an ACG), compared with 62 percent of those who received a Pell Grant only in 2008–09.  Similarly, among third-year students who received both a SMART Grant and a Pell Grant in 2008–09, 83 percent received another Pell Grant the next year, compared with 75 percent of those who had received Pell Grants only.

While the additional financial support provided by the ACG may contribute to the observed higher persistence rates for the recipients of these grants, other factors may be equally or even more important. ACG and National SMART Grant recipients are among the most academically qualified Pell Grant recipients and therefore would be expected to persist at higher rates than students who did not meet the academic qualifications for the grants.

# Lessons Learned

Both the ACG and the National SMART Grant were relatively small programs that had to be quickly implemented before regulations were finalized. They required simultaneous confirmation of academic and financial eligibility for a Pell Grant. This caused many administrative problems for participating institutions, especially in the first years, and most awarded very few grants.  A longer lead time for new federal programs that require new processes would enable institutions and states to clarify requirements, establish processes that complement the regulations, disseminate information to the appropriate offices and agencies.

Many ACG and SMART grant recipients did not meet academic requirements necessary to qualify for a subsequent grant.    Most of those who qualify are at the higher end of the income distribution of Pell Grant recipients. Moreover, the characteristics of first-year ACG students and third-year SMART grant recipients are different (e.g., rigorous high school coursework for ACG recipients; high GPA for third-year SMART grant recipients) than other Pell Grant recipients.