The Effects of Need-based Grants on Student Access

Castleman and Long (2012) examine “the effect of need-based grant eligibility on the probability that students enter, persist, and complete college” (24) by examining the Florida Student Access Grant. The authors suggest that not only does need-based aid have a positive effect on persistence and degree completion, but also that increasing the award amounts of current aid programs could have beneficial effects, too (26).

In “What Is Known About the Impact of Financial Aid? Implications for Policy” (2008) Bridget Long addresses the effectiveness of financial aid for students’ postsecondary decisions and questions the best ways to design and implement programs and policies, with the goal of improving college access and affordability (iii).

Long writes that while “research supports the notion that financial aid can influence students’ postsecondary decisions, questions remain about the best ways to design and implement such programs and policies. In particular, debate continues about which types of aid are most cost-effective in influencing behavior” (1). The import of these questions is even more “significant given the shifts over time in the types of aid available to help students pay for college” (1).

Long goes on to address the additional questions brought about by the implications of the effectiveness of financial aid programs on college access, choice, and affordability: “Although there is a belief that financial aid could greatly improve educational outcomes, there are also many reasons to question the efficacy of the current American system of financial aid” (2), including reviews by the federal Commission on the Future of Higher Education, which “concluded that federal financial aid programs are not addressing the problems currently facing students” (2), also noting the “shift in resources from need-based to merit-based aid at both the government and institutional levels has made many assert that the original goals of using aid to increase access have long been forgotten” (2).

Long’s article acts as a foundation on the questions surrounding the debate of efficacy of financial aid programs and policies. However, since Long’s article deals primarily with financial aid policy and policymakers, more broadly, it’s also important to consider and examine financial aid programs, more specifically, that pertain to and impact students, too.

Therefore, with the aforementioned concerns facing higher education administration serving as a framework for this article critique, I read Castleman and Long’s 2012 study, “Looking Beyond Enrollment: The causal effect of need-based grants on college access, persistence, and graduation” to progress and build upon the existing literature (the aforementioned Long article), which grounds the debate on the effectiveness of financial aid programs and policies yet pushes beyond access and enrollment, focusing on the impact of financial aid on persistence and degree completion (26).

Castleman and Long begin their study by addressing the increases in higher education enrollment over the past several decades, mainly focusing on the enrollment gap and other gaps in college success between low-income youth and families and their middle and upper-class counterparts: “The college attendance rates of youth from low-income families continue to lag behind those of their middle- and upper-income peers” (1). Castleman and Long note one explanation for the persistent gaps is “the lack of college affordability for low-income students” (1). Castleman and Long indicate, about the rising cost of college, that, “Since the 1970s, the cost of college has risen at a much faster rate than have median family wages, meaning that tuition—as a share of family income—has increased steadily (ACSFA, 2010)” (1).

Castleman and Long continue that federal and state governments’ response to the problem of the rising cost of college is need-based financial grants, for example, “the federal Pell Grant, which is a need-based grant awarded to low-and moderate-income students” (1). Though pertaining specifically to policy, Castleman and Long inquire whether Pell Grants improve students’ college outcomes (1).

Castleman and Long continue by addressing prior research that examines “the causal effect of need-based grants on college access” (1), citing Deming and Dynarski’s 2009 study which found that, “there is robust evidence that need-based grant eligibility can have a strong and positive effect on whether students enroll in college” (1).

Castleman and Long enumerate other recent studies that examine the long-term effect of merit-based scholarship on whether students earn a degree, including Bruce and Carruthers’ 2011 study, Dynarksi’s 2008 study, Scott-Clayton’s 2011 study, and Bettinger, et al.s’ 2012 study, which “suggests that helping students apply for federal aid like the Pell Grant does help support college persistence” (2).

Castleman and Long go on to address the scant research that examines “the effect of need-based grants on whether students persistent, accumulate more college credits, and ultimately complete a degree” (2). Thus, in their study, the authors investigate these effects, focusing on the need-based Florida Student Access Grant (FSAG) and “on whether students enter, remain enrolled in, and graduate from college…focusing on longer-term effects of need-based financial aid” (2) and contribute to the existing literature.

Ultimately, Castleman and Long conclude that

FSAG eligibility had a positive impact on a host of short-, medium-, and long-term college outcomes. The additional $1,300 in grant aid eligibility (in 2000 dollars) increased the probability of immediate enrollment at a public, four-year university by 3.2 percentage points while also increasing the probability of staying continuously enrolled through the spring semester of students' freshman year by 4.3 percentage points. Most importantly, the additional $1,300 in aid eligibility increased the probability of earning a bachelor’s degree within six years by 4.6 percentage points, or 22 percent. FSAG had a particularly pronounced impact on students with higher GPAs in their senior year, both those who qualified for the state merit-based scholarship, Bright Futures, and separately students who had high senior year GPAs but did not qualify for Bright Futures (3).

As Castleman and Long’s results suggest, “not only does need-based aid have a positive effect on persistence and degree completion, but also that increasing the award amounts of current aid programs could have beneficial effects” (26). Castleman and Long’s study also suggests that the “FSAG award is a beneficial social investment,” considering the population of Florida high school seniors (26). Financial aid programs such as the FSAG award benefit society because it helps to increases educational attainment particularly for low-income youth and families.

While this increase may not necessarily close the college success gap, as it continues to persist as it has for decades (Long 2012; Case 2013), the gap could eventually narrow with the infusion of other types and packages of aid (need-based and merit-based; federal, state, and institutional) and other programs designed to help low-income students and families, for example, “the reduction in cost of attendance at public, four-year institutions” (Castleman and Long 26) and other financial (aid) literacy programs facilitated by financial aid office, which John Case addresses in “ Implications of Financial Aid: what College Counselors Should Know” (2013). For example, Case mentions that financial aid officers can provide students advice on effective budgeting: “This is particularly important for students with limited resources or lack of experience in managing their own money” (162).

Moreover, improving access, persistence, and graduation of low-income students, via need-based grants like FSAG, will also provide “positive impacts on degree attainment” and demonstrates that the FSAG award “is a beneficial social investment” (Castleman and Long 27). Not only do social and private benefits stem from access, persistence, and graduation, but helping students earn a bachelor’s degree within six years is yet another benefit of this type of the FSAG award (Castleman and Long 27).

Educational attainment, with respect to median full-time workers with a bachelor’s college degree, also increases earnings and tax payments. Considering the students who did not graduate within six years or at all, the FSAG increased educational attainment in terms of the additional education, accumulation of additional college credits, etc. (Castleman and Long 28).

Castleman and Long conclude that “these findings provide policymakers with valuable information about the long-term benefits of public investments in need-based financial assistance for college, and suggest that investments in need-based grant aid generate substantial private and social monetary benefits” (28).

References

Case, J. (2013). Implications of financial aid: What college counselors should know. Journal Of College Student Psychotherapy, 27(2), 159-173.

Castleman, B., & Long, B. (2012) Looking beyond enrollment: The causal effect of need-based grants on college access, persistence, and graduation. 1-28.

Long, B. (2008). What is known about the impact of financial aid? Implications for policy. National Center for Postsecondary Research.