New Study Shows College Retention Rates Improved by Targeting Students Receiving Pell Grants for Supplemental State Aid

Washington, D.C. – Strategically targeted need-based financial aid dollars could improve higher education student retention rates—increasing chances of a student graduating from college, according to a new study conducted for the Louisiana Board of Regents.

Authored by the American Institutes for Research (AIR) and Noel-Levitz, the study found that targeting supplemental financial aid to students receiving Pell grants in Louisiana improved retention rates by more than 14 percent.

The study examines financial aid policies and approaches affecting four-year public institutions in the state of Louisiana. Key findings include:

  • Pell Grants improve retention rates for those students who are the most at-risk.
  • Pell Grants help overcome differences in retention rates across income levels among students with equivalent academic preparation.
  • When Pell Grants are coupled with Louisiana’s GO Grants – which assist nontraditional and low to moderate income students in need of financial help to afford college – student retention rates improve by 14 percent compared with students receiving Pell Grants alone.
  • Increasing GO Grants up to $4,000 and targeting the aid to students with weak overall financial aid awards could increase Louisiana’s retention rates, while saving the state hundreds of thousands of dollars annually.

“With public funding for financial aid facing constraints at both the state and federal levels, there is heightened interest in the question: How do strategies allocating financial aid affect student retention and completion?” the authors write.

“The study strongly suggests that raising aid levels from state programs to students receiving Pell grants would increase retention rates and save Louisiana money. This is an approach with potential application in states throughout the country,” said co-author Mark Schneider, an AIR vice president who has conducted extensive research on the cost of college dropouts to taxpayers and communities.

“What’s powerful about this report is it shows us that redirecting the scare resources we currently receive… into increased awards for students who need it the most will result in the best return on our investment when it comes to keeping students in college,” Louisiana’s Commissioner of Higher Education Jim Purcell said in a statement released by his office.

Noel-Levitz President Kevin Crockett said the study showed that “if you’re able to target your available dollars on getting students to the 55-60 percent funding level no matter what the source, you’ve gotten the best results possible.”

The financial aid study was based on 37,251 full-time student records during the fall terms of 2006, 2007 and 2008 from Louisiana’s public statewide and regional four-year universities and was funded by the Bill and Melinda Gates Foundation.

The full report is available on the AIR website,

About AIR
Established in 1946, with headquarters in Washington, D.C., the American Institutes for Research (AIR) is a nonpartisan, not-for-profit organization that conducts behavioral and social science research and delivers technical assistance both domestically and internationally in the areas of health, education, and workforce productivity. For more information, visit


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