Institutional Grants and Baccalaureate Degree Attainment
Author: Price, Derek V.
Date: 2006-06-00
Type: Reports - Research
Subjects: Grants,Student Financial Aid,Undergraduate Students,Academic Persistence,Educational Attainment,Bachelors Degrees,Graduation,Student Characteristics,Public Colleges,Private Colleges,Federal Aid,Student Loan Programs,Federal Programs

While the effects of the shift from need- to merit-based grants on student enrollment and receipt of aid have been examined thoroughly by a number of analysts, very few recent reports have examined the effects of these grants on students' persistence towards completing bachelor's degrees. To examine this issue, this report explores the linkages between the receipt of institutional need- and merit-based grants in the first year of college and degree completion within six years for students who began college in academic year 1995-96. The data are from the National Center for Education Statistics' &quot;Beginning Postsecondary Students Longitudinal Survey&quot; (BPS 1996:2001), a nationally representative sample of students who have enrolled in a postsecondary institution in the 50 states, the District of Columbia, and Puerto Rico. Data were collected from undergraduate students through computer-assisted telephone interviews in 1996, 1998, and 2001. The analysis for this report was limited to students who began college at public and private nonprofit four-year institutions because community college students seldom receive institutional grant aid. The BPS data were used to examine the number and demographic characteristics of beginning students who received need- and merit-based institutional grants and average grant amounts; the percentage of tuition and fee charges that recipients covered with their institutional grants; and the percentage of institutional aid recipients who completed their bachelor's degree programs within six years of entering higher education. This analysis suggests that institutional need-based grants are an important predictor of college success for low- and moderate-income students. In particular, the percentage of tuition and fees (as well as the total cost of college) covered by grant financial aid in the first year may affect the likelihood that a student will graduate within six years. Put simply, one strategy that could be used to increase the percentage of students who earn bachelor's degrees within six years is to provide larger grants in the first year of college. The amount of first-year institutional grants should be large enough that, when combined with other grant aid, it covers at least half of tuition and fees and between 20 and 30 percent of the total price of attendance. Given an emerging national interest in improving graduation rates, educators, researchers, private foundations, and policymakers should consider how to develop more definitive evidence on the impact of institutional grant aid in each year of college. Such evidence is necessary for financial aid administrators and other college leaders to develop and implement more effective strategies for financial aid packaging and thereby increase the number of students who graduate within six years. A technical appendix includes: Logistic Regression Results for Students Who Began at Public and Private Four-Year Colleges and Universities. (Contains 12 tables, 3 figures and 11 footnotes.) [Funding for this paper was provided by the National Education Loan Network.]