Can Financial Aid Improve Student Success at Louisiana’s Community Colleges?
A Study of the Potential Impact of Redistributing State Gift Aid on the Success of Pell Grant Recipients
Community colleges, which now enroll over one-third of the nation’s postsecondary students, have become increasingly important to the training of the nation’s workforce and as a gateway to bachelor’s degree programs. The Obama Administration has emphasized community colleges as key to achieving its goal of the United States having the highest proportion of college graduates in the world by 2020. However, student success rates in these colleges are low. According to the American College Testing Program, for fi rst-time, full-time students, the first-to-second year retention rate at two-year public institutions is 55 percent and the three-year graduation rate is only 27 percent. At the same time, state and federal governments are contending with fiscal constraints, and many states are cutting back on their support to higher education.
As these trends collide, a policy question has come to the fore: Does financial aid affect student retention and completion in the two-year sector? This leads to a related question: Can financial aid be deployed more efficiently to increase student success rates without significantly increasing the aggregate cost of the aid programs?
Student Success and Financial Aid in Louisiana Community Colleges
In this report, the authors investigate the relationship between levels of financial aid and student success in Louisiana community colleges, with a focus on Pell Grant recipients. They measure success by whether a student earned a certificate or an associate’s degree within three years of enrolling as a first-time full-time student or transferred to a four-year Louisiana university within the same timeframe.
This report is a companion to an earlier study of the effects of grants and scholarships on student retention in Louisiana’s four-year regional state university campuses. In that study, the authors concluded that by more effectively targeting its scholarships and grants (what we call “Gift Aid”), Louisiana could increase student retention while saving almost $400,000 per year. As this community college study is about to show, strategically targeting financial aid to increase the success of community college students appears to be far less likely to succeed.