Data help make the case for need-based aid
The Council’s 2013 policy agenda calls for an increase in need-based financial aid, but why does this make sense? The answer is in the data, which makes a strong case for why Minnesota’s State Grant program is so worthwhile.
When the goal is to increase the number of Minnesotans who earn a college degree, need-based grant aid has a powerful impact – especially in these key areas:
On-time graduation rates
On-time graduation reduces college costs associated with being enrolled for longer than four years and it allows graduates to join the workforce sooner and avoid losing out on years of earnings. Increasing the share of higher education funding allocated to grant aid has proven to improve college completion. It not only helps pay college costs, but may help students persist in college when they are able to attend full-time rather than part-time. Need-based aid also increases students’ freedom to become more engaged in the academic and social environments of their schools. Research suggests students have improved academic achievement when they are more engaged on campus, especially lower-ability students.
Time students spend working rather than studying
Students who receive need-based grant aid are less likely to work more than 25 hours per week. While most students do some form of work, research indicates that working too much while attending school full-time can have a negative effect on student engagement on campus, grades, persistence and completion. Working often forces students to make trade-offs that cut into the time they have for studying.
Reduced reliance on loan aid
Loan and debt aversion by low-income and minority students may prevent them from applying for college. Also, these students are at higher risk of defaulting on their loans if they do borrow to pay for college. When adequate grant funding is available, students are more likely to persist in college. Taking on too much debt may affect students’ choice of major, deterring them from public service fields, and may impact life decisions after college such as buying a house, getting married or having children.
Other positive impacts of need-based aid include greater enrollment of low-income students, higher retention and persistence in college, and better outcomes for students over 24 years old.
For details — including sources — see the recent Research Brief, “Investing in Higher Education Through the Minnesota State Grant Program.”