Providing Incentives for Timely Progress Toward Earning a College Degree
Results from a Performance-Based Scholarship Experiment
This paper presents effects after five years of a performance-based scholarship offered to low-income entering freshmen at The University of New Mexico, a medium-sized public university. The VISTA program, which was evaluated using a randomized controlled trial, provided eligible students with up to $1,000 in additional aid per semester for four semesters, conditional on enrolling for a minimum number of credit hours and maintaining a minimum GPA. The program also offered enhanced academic advising. The findings show that the program led to small increases in credit hour accumulation during the first two years, which translated into notable increases in graduation rates after five years — an increase of 4.5 percentage points, an effect that just misses the conventional statistical significance level of 10 percent. The enhanced academic advising may have contributed to the higher graduation rate by increasing awareness among students of the courses needed to graduate. The effects of VISTA are in the context of the state’s generous lottery-funded scholarship, which paid tuition for students who maintained full-time enrollment and a minimum GPA.