A National Analysis of Variations in State Financial Aid Program Design and Student Success

In this brief, we examined how state-level financial aid policies relate to students’ enrollment and completion using detailed data on states’ financial aid programs available for first-time entering college students for fiscal years 2004-2020. We found little consistent evidence of a relationship between student outcomes and the amount of aid per recipient, though, we did find practically significant correlations with aid eligibility criteria. Among institutions located in states with aid disbursed based on financial need and academic merit, requiring a college entrance exam for eligibility was associated with smaller enrollments and lower graduation rates compared to institutions that did not require the exams. This finding was not replicated when we explored requiring exams for institutions in states with aid disbursed solely based on academic merit.

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Exploring the Impact of Variations in State Performance Funding Policies on College Access

The majority of U.S. states have enacted performance-based funding (PBF) policies that tie a portion of state funds for public colleges and universities to student outcome metrics, such as retention and degree completion. A growing body of evidence, however, demonstrates that PBF policies have had little impact on degree production but have led to a number of unintended consequences, including restricted access among underserved students. Our findings do not indicate widespread decreases in college access among underserved students with the implementation of either low- or high-dosage PBF systems. However, at the most selective institutions, we find some evidence of decreases in enrollment among racially minoritized and low-income students with the adoption of low-dosage PBF systems. Across institutional types, our findings indicate the presence of equity metrics are not enough to boost enrollment among the subpopulations they target except for racially minoritized students and only at the least-selective colleges.

Elise GrinsteadJune 30, 2021Kelly Rosinger, Justin Ortagus, Robert Kelchen, Junghee Choi

Performance Funding for Higher Education: Current Evidence, Unanswered Questions, and How New Data Can Inform Policy

In 2020, 33 states had PBF policies that existed either through state legislation or higher education agency approval, and 41 states have had PBF policies in place at some point since 1997. Unsurprisingly, given the popularity and growth of PBF policies over time, a large body of literature has emerged that examines the intended and unintended consequences of PBF. This literature largely indicates PBF policies have done little to improve degree completion and have resulted in unintended consequences that are likely to widen racial and economic educational disparities. This brief summarizes literature that examines the intended and unintended consequences of PBF and highlights unanswered questions regarding PBF policies. We then offer insight into how new data that our InformEd States team has collected can be leveraged to examine these unanswered questions and inform policymakers regarding how to design equitable and effective PBF policies.

State Snapshots of Funding for Public Colleges and Student Financial Aid: California, Florida, And Texas

In Fiscal Year 2018, states allocated approximately $99 billion for appropriations for public colleges and universities and $12 billion for students through financial aid programs. States face an economic recession that is estimated to reduce state budgets by $200 billion in Fiscal Years 2020 and 2021 in the midst of the COVID-19 pandemic. In the coming years, state legislatures will grapple with difficult decisions regarding how to fund higher education. This brief highlights variations in state approaches to funding for higher education in three large and diverse states that together enroll around 30% of all undergraduate students in the United States: California, Florida, and Texas.

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