The Impact of Financial Need Scholarships on Student Success

Introduction

Financial need scholarships have played a critical role in increasing the accessibility of higher education opportunities to students from low-income backgrounds. In 2016, 72% of undergraduate students received some type of financial aid, including 79% of students at private nonprofit institutions and 64% at public institutions. Although increased access is an important first step to inclusivity in education and workforce pathways, there is evidence to suggest that students from lower-income backgrounds are at a disadvantage when applying to or enrolling in higher education, particularly in higher levels of education. U.S. colleges tend to stratify by school quality, and students with higher scholastic aptitude and academic preparation tend to apply to, matriculate in, and graduate from the most selective four-year institutions and programs where scholarships are already plentiful.

Employment trends also suggest an increasing emphasis on higher levels of education and/or technical training. College-educated workers dominate the highest paid positions in the labor market and are also less likely to face unemployment. A college degree has the potential to alter the trajectory of a student’s career. Despite the benefits of increased education, many students from low-income areas are hesitant to attend a postsecondary education program due to the high cost of tuition. There is a need to consider the barriers faced by these students when enrolling or transitioning to a postsecondary program in addition to the programs that are implemented to increase the likelihood of them succeeding and completing the program.

Literature Review

The literature review discusses the existing research on the impact of financial need scholarships on student success. It begins with findings that show a positive correlation between scholarships and student success in community college, particularly the scholarship's impact on a student's grade point average and overall retention in school. However, overall research on the impact of financial aid also suggests a negative correlation with student GPA, retention rate, and graduation rate. The key theme in the literature suggests that scholarships often support the most disadvantaged population of students in higher education. Research also shows that no significant relationship exists between a student's grades and scholarships in some studies. However, because grants are a significant problem for many students attending college, specifically need-based students, they support the most goal-oriented students in higher education; thus, their statistics are a reason to support the continuation of grants.

The literature review indicates a number of areas that are missing research, such as the impact of historical research that focuses on grants and scholarships and student success in higher education, and the role of financial aid as it pertains to the recruitment of students in higher education. The proposed study includes a better understanding, or at least a historical context, of the scholarship process of an institution of higher education, particularly the impact on student success in higher education. It will also help to uncover the following procedures: how scholarships were or are being used either to recruit students based on need or success? What logic is used to award scholarships for stellar performance or to assist low- and middle-income students? Uncover the historical context which distinguishes where financial aid goes historically and academically? Does scholarship aid increase the overall total grant aid for students? It was and still is the goal of the financial aid office to increase overall student financial aid so students can afford to attend college. This study was designed to help the intended university create a model system focusing on the award using two criteria: student success and need competition. Informing students and parents concerning the impact of financial aid on a student’s future—all kinds of students—is important to students as they leave high school and enter college life.

Methodology

This research uses a mixed methods, quasi-experimental approach to understanding the impact of financial need scholarships and the implications for policy and practice. Purposeful sampling for data collection includes students of diverse social identities coming from primarily low-to-moderate income families and attending one of the four public technical colleges. Additional factors for selection include whether the student applied for a financial need scholarship, the type of financial need scholarship received, and persistence status at the college from Fall 2020 to Fall 2021. This research includes an expansion of data sources for the scholarship application and award process, to include a national sample of scholarship directors of community colleges offering technical and occupational degrees and certificates. This research utilizes an explanatory sequential design, beginning with quantitative data collection and analysis, followed by the collection and analysis of qualitative data. The following sections detail the quantitative analysis. This study draws on survey data, academic records, and interviews to document the impact of financial need scholarships in the southeastern United States. The survey study investigates access to, experiences with, and the impact of emergency grants on the students from primarily low-income families. The survey research integrated student narratives to support overall findings. Self-selected students were repeatedly invited to participate across five time points. All research was conducted and is reported in a way that centers the voices and experiences of students.

Findings and Analysis

This paper expands on trends originally presented in another study on the effectiveness of an umbrella non-need-based scholarship program by isolating students who received financial need scholarships (N = 457) and comparing them against a control group of low-income students who did not. The scholarship intervention influenced cumulative GPA during the second year of college but not subsequent years. Furthermore, certain similarities between the two studies determined that low-income students do benefit academically from institutional support.

The conclusion section discusses the results, examining what they might imply for financial-need-based scholarships focused on academic eligibility. Furthermore, the authors explore how the results can inform the practice of creating strategic student success initiatives in higher education.

The purpose of this analysis was to determine the effectiveness of financial-need-based scholarships in promoting student success at the underserved institutional setting, both in terms of recruiting students and promoting academic success. In particular, we sought to identify not only general trends between recipients of financial-need-based scholarships and a comparison group, but also sub-demographic trends among these populations to help determine how we might best target future scholarships. Data was drawn from a study conducted by the institution's Office of Institutional Effectiveness and Assessment, which is tasked with creating comprehensive reports to comply with accreditation standards and to provide information on the effectiveness of university programs.

Conclusion and Recommendations

In conclusion, our research offers insight into the transformative impact of financial need scholarships. We have seen that these scholarship programs broaden the applicant pool and have a transformative impact on success rates and graduation times. They suggest the importance of not only offering need-based scholarships but also offering need-based scholarships that are more substantial than merit-based aid packages. As a result of our findings, we conclude that need-based scholarships are vital in increasing access and success in higher education, as demonstrated through these tangible results. Currently, the winners already receive substantial financial aid from their institution, but not in the form of a scholarship. A financial need scholarship equivalent to merit-based scholarships could eliminate half of tuition and fees. Higher education institutions considering need-based scholarships would benefit from targeting those with the highest need, as the greatest effects on student success were observed when the program was more selective. In addition, if funding is available, scholarship renewability and service obligations may be beneficial for increasing program appeal among new students and student persistence. Although there was substantial evidence that need-based scholarships aid with student success and completion, there are some limitations to the research that suggest coverage of areas for future study. As a result of the initiative, 12,000 students have been awarded and will receive scholarships through participating colleges and universities. Our hope is to inspire action on the part of the university, policymakers, celebrities, and various financial aid stakeholders to build and enhance state-wide incentives, programs, and funding that will even the playing field for low-income young people entering higher education.

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