Aid Like A Paycheck


Can existing financial aid programs do more to help low-income college students achieve academic success? MDRC is conducting a large-scale evaluation of Aid Like A Paycheck, a new program based on a simple yet potentially transformative idea: After the college receives payment for tuition and fees, disburse remaining financial aid to students incrementally — like a paycheck — rather than in one or two lump sums.

The goals of the program are to help students strike a balance between time spent on school and working, better manage their limited aid throughout the term, and think about school as a job where regular attendance and meaningful effort are rewarded. Aid Like A Paycheck could improve students’ success in college and may also hold promise for making financial aid — whether federal, state, or private — more cost-effective by ensuring that aid is distributed to students while they maintain their enrollment.

Because Aid Like A Paycheck relies on existing financial aid, it can potentially be expanded to benefit millions of students nationally. MDRC’s rigorous evaluation of Aid Like A Paycheck will ensure that any resulting policy changes would produce the maximum academic and economic benefits for students, colleges, states, and the federal government.

This evaluation was launched as part of the Aid Success Project, a collaboration of MDRC and The Institute for College Access and Success. Since its inception in 2009, Aid Like A Paycheck has received support from the Laura and John Arnold Foundation, MetLife Foundation, Houston Endowment Inc., the Bill & Melinda Gates Foundation, the Kresge Foundation, and the Annie E. Casey Foundation, and has generated keen interest from the U.S. Department of Education. Between 2010 and 2013, Triton College (Illinois) and Mt. San Antonio College (California) provided about 350 students with their aid refunds, primarily Pell Grants, in biweekly disbursements. Based on the promising implementation of Aid Like A Paycheck in this first phase (described in this brief), MDRC is conducting a mixed-methods evaluation at San Jacinto College and the Houston Community College System (both in the Houston area), where the interim findings show mixed results. The final report, released in 2019, includes longer follow-up, as well as a look at the program’s implementation at the West Hills Community College District, in California’s Central Valley.

Agenda, Scope, and Goals

MDRC’s Aid Like A Paycheck evaluation is testing whether biweekly disbursements of Pell Grants, federal loans, and state aid can improve student outcomes and the efficiency of financial aid programs. The project will answer the following fundamental questions:

  • Does Aid Like A Paycheck affect students’ academic outcomes, such as credits earned or persistence in school?

  • Does it affect economic outcomes, such as total aid received or debt accumulated?

  • Can it be implemented at a large scale while maintaining the core design? What factors facilitate successful implementation?

  • What are the benefits and costs for students, colleges, states, and the federal government?

  • Can biweekly disbursements lead to a change in students’ attitudes and behaviors related to financial aid?

Design, Sites, and Data Sources

The evaluation uses a mixed-methods research design. In Texas, the evaluation includes a randomized controlled trial whereby eligible new students at the Houston Community College System and San Jacinto College are assigned either to a program group, in which they receive financial aid refunds in biweekly disbursements throughout several semesters, or to a control group, in which they receive refunds in one lump sum per semester according to their college’s standard procedures.

About 8,500 students were enrolled in the study at the Texas colleges. The last term of study enrollment was spring 2017. Students’ academic and economic outcomes are being tracked through their colleges’ administrative data records for up to two years in order to determine the effects of the program on students, colleges, states, and the federal government.

At the West Hills Community College District, beginning in fall 2016, all students receiving financial aid (not a random sample) began receiving their aid refunds in biweekly disbursements. Given the uniform method of disbursement, MDRC is studying the implementation, scaling, and replicability of the program.

In addition, with funding from MetLife Foundation, MDRC administered a multiwave survey to students enrolled in the study in fall 2015 and spring 2016. Findings from the survey are being used to describe students’ financial health, academic behavior, and work status throughout the semester, and will be linked to their academic and financial aid outcome records to help explain the mechanisms of change for any impacts found. The final report is tentatively scheduled for release in 2018.