Study Finds That Modest Financial Aid Rewards Can Improve Academic Performance and Retention Rates for Low-Income Students

New research from the Manpower Demonstration Research Corporation, a nonprofit organization created by the Ford Foundation, shows how important financial aid scholarships can be in increasing retention for low-income students in higher education.

The study involved low-income students at two community colleges in Louisiana. While the study does not include racial data, blacks make up large percentages of the total enrollment at both colleges used in the study. Many of the students who participated in the study were single mothers.

The students were randomly placed in two groups. One group was eligible for grants totaling $2,000 if they remained enrolled full-time and maintained at least a C grade point average. These grants were in addition to their federal Pell Grants. The other group was not eligible for the additional $2,000 in grants.

The study found that the students in the control group that were eligible for the grants were more apt to stay enrolled full-time, they passed more courses, had higher grades, and dropped courses less often.

The authors of the study conclude that even modest financial incentives can go a long way toward improving low-income students’ success rate in higher education.