Results from an ongoing study of a private grant program in Wisconsin indicate that low-income students with federal Pell Grants who are unlikely to finish college will stay in school longer with additional financial aid.
Wisconsin Scholars Longitudinal Study (WSLS) findings suggest that directing aid to serve the neediest students in the pool of the private grant recipients may be the most equitable and cost-effective approach.
WSLS co-directors Sara Goldrick-Rab and Doug Harris – both associate professors in the Department of Educational Policy Studies – have been leading the research team that is examining the impact of the Fund for Wisconsin Scholars (FFWS) need-based grant program on the educational attainment of its recipients since 2008.
The FFWS, made possible with gifts from UW alumni John and Tashia Morgridge, provides $3,500 per year grants to randomly picked federal Pell Grant recipients who enroll full time at a University of Wisconsin System institution. WSLS researchers have collected survey and interview data on 1,500 students, including 600 grant recipients and a random sample of 900 eligible non-recipients who serve as a control group.
“Our findings suggest that making college more affordable for students who were initially unlikely to succeed in college increased their college persistence rates over the first three years of college by about 17 percentage points,” Goldrick-Rab said.
However, because financial aid programs usually do not explicitly target this particular group of students, prior research has found that the average effects of need-based grants are often modest.
“It’s common to focus only on the average effects of financial aid programs, but it’s clear that often policies work better for some people than others,” Goldrick-Rab said. “In this case, the Wisconsin grant really helped some students, didn’t help others, and may even have had adverse consequences for another group.”
While policy discussions about targeting financial aid often focus on financial need, the WSLS researchers also considered challenges faced by first-generation students and those with inadequate academic preparation.
According to the study, students without college-educated parents and those with lower test scores were initially much less likely to persist in college, while students with high test scores and whose parents held bachelor’s degrees began with a high probability of finishing. The effects of the additional financial aid provided by the Wisconsin grant were very different for those two groups.
Initial findings indicate the program has a moderate positive impact, on average, on the educational attainment of grant recipients.
“Enrollment rates didn’t improve much over three years. But the good news is that some students who were awarded the grant were 28 percent more likely to finish 60 credits over two years, increasing the chances that they will earn a bachelor’s degree on time,” said Doug Harris, WSLS co-director and associate professor of educational policy studies and public affairs.
The results of the study so far will help tailor the way in which grants are awarded and how the Scholars fund should be run going forward, said Tashia Morgridge, a School of Education alumna.
For example, one of the parameters of the grant program was to make sure that every student who participated was treated equally, which meant that none received special tutoring.
"Going forward, we may have to do something different – but we don't know that yet," she said. "We're hoping that the results of the study will inform us as grant makers."
December Update from Sara Goldrick-Rab:
”Analyses conducted subsequent to the release of the working paper deepened our understanding of the effects of the Fund for Wisconsin Scholars grant program. The key factor underlying the observed differential response to the grant appears to be a student's high school academic preparation--in particular their coursework. In accordance with a federal definition used for aid purposes, we consider students "well-prepared" if they passed two AP courses (with a three or higher on the exam) or two IB courses (with a four or higher on the exam) or completed the following coursework requirements: four years of English, three years of math with one course higher than algebra I, three years of science with one year of two of the three courses (biology, chemistry, and physics), three years of social studies, and one year of foreign language, fine arts, or technical education. If they did not, given that they did manage to gain admission to a UW System university, we consider them ‘modestly prepared.’
The experimental treatment effects, measured as the difference in average retention rates of students in the treatment and control group three years after the program began, range from negative six percentage points for students who were academically well prepared for college to positive sixteen percentage points for modestly prepared students. These countervailing effects largely cancel out, resulting in average treatment effects that are null.
Students who were modestly prepared for college appear to have used the FFWS grant to reduce their work hours and invest more time in studying. We do not observe similar patterns for the well-prepared students. On the other hand, the negative effects for that group appear to be explained by loss aversion. Well-prepared students in the treatment group, while receiving more aid in total, saw a substantial share of their initial financial aid reduced over time, apparently eliciting a negative response.
We conclude that the modest effects of conditional cash transfers for low-income university students might be enhanced with better targeting, and that the design of financial aid should consider the risk for loss.
We encourage readers to refer to our website – finaidstudy.org – for more information and the revised paper (to be released in January 2012).”
The WSLS is a collaborative effort between the University of Wisconsin System, the Wisconsin Technical College System, and the Wisconsin Higher Educational Aids Board. The study is also supported by UW-Madison's Wisconsin Center for Educational Research (WCER), Wisconsin Center for the Advancement of Postsecondary Education (WISCAPE), and Institute for Research on Poverty. The Bill and Melinda Gates Foundation, the William T. Grant Foundation, and the Spencer Foundation provided funding for the research.