Policy Blog Series: The State of Financial Aid

Jan 10, 2012 by Matthew Smith

Legislatures create financial aid programs to increase college access, degree attainment and economic prosperity. However, with limited resources to allocate, state policymakers are seeking more concrete assurances that financial aid actually achieves these objectives. A Boosting College Completion policy scan shows legislatures are increasingly trying to measure the impact of their investments and the strategic alignment between financial aid and other state goals.

Trends in State Financial Aid

A survey of the BCC Policy Database found 47 policies related to financial aid enacted in the last two years. The following four policy categories were most prominent:

Requiring data collection and evaluation to measure the impact of financial aid on a variety of outcomes (e.g., college retention, degree attainment, job placement)
Amending student aid eligibility and retention requirements
Extending aid eligibility to returning adults, near completers or students enrolled in career/occupational training
Creating student incentives to pursue specific occupations

California Senate Bill 70 (2011), for example, requires institutions participating in the Cal Grant program to report on the enrollment, persistence and graduation rates for all students and college job placement and salary data by program of study.

Despite limited resources, states have invested in financial aid for several groups, including early high school graduates, foster children and transfer students. Idaho’s House Bill 493 (2010) created the Master Advancement Scholarship, which would provide students with the opportunity and incentive to graduate high school. Delaware Senate Bill 41 (2010) allows children leaving foster care to have access to the SEED Scholarship. Illinois Senate Bill 3699 (2010) established the Community College Transfer Grant Program, which provides a base scholarship for those students who have financial need and transferred with a completed associate degree. Additionally, students pursuing STEM, nursing and teaching careers are eligible to receive a supplement.

Questions You Can Use

As states consider how to more effectively leverage investments in financial aid, we suggest that policymakers consider the following five questions:

Do students who receive financial aid persist to their sophomore year, graduate on time and stay in the state at the same or greater rate than your overall state average?
To what degree do financial aid programs result in more students pursuing credential that contribute to state economic and workforce goals?
Do financial aid programs complement and reinforce other state strategies, such as those related to remedial education, transfer and articulation, and occupational training?
To what degree are students aware of financial aid opportunities? How well and how transparently do the state and postsecondary system communicate to students and their families the availability of these programs and how to take advantage of them?
How does financial aid fit within a broader state strategy to increase postsecondary attainment?

Need Technical Assistance?

BCC provides research and technical assistance on issues related to postsecondary education and workforce development. If you have a question about financial aid or other state strategies, .

Below, you will find an embed from the BCC Policy Database, which highlights financial aid policies enacted in the last two years.