The Consequences of Merit Aid: Who Really Benefits?

Abstract

State governments make a tremendous investment in the financing of higher education. Considering this investment, it is critical that there be a better understanding of exactly how financial aid programs administered at the state level are related to persistence and degree attainment, especially among the groups these programs were created to serve. The purpose of the current research was to examine the relationships between state merit-based aid programs and degree attainment among African-American, Hispanic, and low-income students. Longitudinal data provided by the National Center for Education Statistics were analyzed using an ex post facto research design. The Beginning Postsecondary Students Survey served as the source for the longitudinal data, and these data were analyzed using descriptive statistics and logistic regression. The state financial aid programs of interest were broad merit-based financial aid programs. The findings here are consistent with past research suggesting that state merit- based financial aid is disproportionately awarded to majority, high-income students. Additionally, although there was a very weak relationship between the receipt of state merit- based aid and timely degree attainment among African-Americans, there was no statistically significant relationship among Hispanic and low-income students. The findings from the current research could prove helpful as related to the continued establishment and implementation of state financial aid programs. It is important for legislators to know who the true beneficiaries are of these broad merit-based financial aid programs that are becoming increasingly popular. In addition, it is also important to determine whether or not the receipt of these types of funding is related to timely degree attainment.