One of the original purposes of student financial aid was to ensure fairer access to postsecondary education to those least able to afford it and to those traditionally underrepresented. Various federal and state programs were put in place to achieve this goal, including the federal Pell Grant and state aid programs. Yet policymakers and education leaders continue to grapple with how to boost college attendance and completion in an era when the number of college graduates is lagging behind demand and government resources are increasingly limited. Increasing the number of college graduates is particularly difficult given the continued rising cost of attending college and the failure of financial aid to keep pace.
This report presents early findings from an evaluation of performance-based scholarships targeting college-bound high school seniors in California, referred to as the Cash for College Performance-Based Scholarship (CFC-PBS) Program. This program is one of six being studied as part of the Performance-Based Scholarship (PBS) Demonstration. Performance-based scholarships are need-based grants contingent on meeting certain academic benchmarks to receive payment — in this case, a half-time course load with a “C” or better grade point average (GPA). Unlike merit-based scholarships, there are no academic criteria to be eligible for the program at the outset. The CFC-PBS scholarship can be taken to any accredited, degree-granting college or university in the country. The goal of the CFC-PBS Program is to increase the amount of aid available for students while simultaneously providing an incentive for academic achievement.
Using a random assignment design — the gold-standard methodology in program evaluation — MDRC assigned over 5,000 students to one of five program groups that were eligible for the incentive scholarship, to a group that was eligible for a scholarship without performance criteria, or to a control group that received their colleges’ standard financial aid packages. This report analyzes three terms of follow-up data from the program in California. Overall, the findings in this report show the following:
- The CFC-PBS Program was largely implemented as designed.
- While few students received the entire amount of the scholarship for which they were eligible, most students received some funding. In this way, the design of the scholarship enabled more students to receive additional financial aid.
- The CFC-PBS Program encouraged more students to matriculate, by about 5 percentage points above the control group rate of 84.4 percent. This increased matriculation largely occurred at community colleges. However, the program had only limited effects on persistence from semester to semester, and only for community college students.
- The program had positive impacts on academic success. These effects extend to numerous subgroups, such as males, females, and students of Latino ethnicity. There is strong evidence that the program affected students with lower high school GPAs more than students with higher high school GPAs.
- The cost to administer scholarships increased as performance requirements were added, but since on the whole, students received only a portion of the scholarship amount they were offered, the decrease in payments to students more than offset the increased cost of administration. All else being equal, scholarships with more performance requirements cost less than scholarships with fewer performance requirements.
A future report will present a cross-site synthesis of the final results from this and other sites from the PBS Demonstration programs.