Income and Financial Aid Effects on Persistence and Degree Attainment in Public Colleges

Oct 15, 2026

Uploaded by dawugda

This study analyzes how different forms of financial aid are distributed among financially dependent students in public four-year colleges and how that distribution influences persistence and timely bachelor’s degree completion. Using NCES Beginning Postsecondary Students (1990–94) data, descriptive statistics and logistic regression show that subsidized loans taken in the first year improve persistence, while the first-year aid pattern does not eliminate income gaps in attainment. Living on campus and first-year GPA are the strongest predictors of on-time completion.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages33

Reading Time1 h 23 min

AccessFree to download

Abstract

Financial aid effects on persistence and timely degree attainment

Higher education financing system and equity goals

Federal and state aid programs over time

Institutional accountability and graduation-rate pressure

A peer-reviewed scholarly journal Editor: Gene V Glass College of Education Arizona State University Copyright is retained by the first or sole author, who grants right of first publication to the EDUCATION POLICY ANALYSIS ARCHIVES. EPAAis a project of the Education Policy Studies Laboratory. Articles appearing in EPAA are abstracted in the Current Index to Journals in Education by the ERIC Clearinghouse on Assessment and Evaluation and are permanently archived in Resources in Education. PDF file of this article available: This article has been retrieved times since May 12, 2004 Volume 12 Number 21 May 12, 2004 ISSN 1068-2341 Income and Financial Aid Effects on Persistence and Degree Attainment in Public Colleges Alicia C. Dowd University of Massachusetts Boston Citation: Dowd A. ,(2004, May 12) . Income and financial aid effects on persistence and degree attainment in public colleges. Education Policy Analysis Archives, 12(21) . Retrieved [Date] from [http://epaa.asu.edu/epaa/v12n21/](http://epaa.asu.edu/epaa/v12n21/) . Abstract This study examined the distribution of financial aid among financially dependent four-year college students and the effectiveness of different types of financial aid in promoting student persistence and timely bachelor’s degree attainment. The findings of descriptive statistical and logistic regression analyses using the NCES Beginning Postsecondary Students (1990-94) data show that subsidized loans taken in the first year of college have a positive effect on persistence. The first-year distribution of aid does not close the income gap in bachelor’s degree attainment. Living on campus and first-year grade point average are the most important predictors of timely degree completion. In the latter half of the twentieth century, the states and federal government of the United States developed a complex higher education financing system. This system serves many purposes, among them the stimulation of private investments in higher education, economic development, and the redress of inequitable access to college for groups that were traditionally excluded. The financing system has many components, including direct subsidies for public colleges and universities and financial aid for students. Direct operating subsidies are the foundation on which states offer higher education to all citizens at a much lower price than that offered by the private sector. Further discounts on the subsidized price are available to eligible students through grants, scholarships, and loans. In addition, a student’s ability to choose a private or public college is supported, as financial aid is also made available to enroll in the more expensive private sector (Policy of Choice , 2002) . (Note 1) Alongside affirmative action, the creation of public colleges and the financial aid system has been a central mechanism for addressing economic and social inequality in the U. S. However, despite the development of this complex system over half a century, college participation in the United States continues to show marked differences by family income (Access Denied, 2001; Ellwood & Kane, 1998; Kane, 1999 Chap.4) . The higher education financing system serves students from all socioeconomic backgrounds. Not surprisingly, the distribution of benefits among these groups is continually being reshaped amid competing claims for resources. The workstudy program, grants, and subsidized loans emerged as part of the War on Poverty. The federal subsidized loan program to aid low-income students was institutionalized in 1965 by the Higher Education Act, and today’s Pell grants were established in 1972 as the Basic Education Opportunity Grant. Shortly thereafter, in 1978 when the Middle Income Student Assistance Act made subsidized federal loans available without income restrictions, the middle class was also firmly established as an important and powerful financial aid constituency (Hansen & Stampen, 1981) . Today,

FAQs

What does the study examine about financial aid?

It examines how financial aid is distributed among financially dependent four-year college students and evaluates the effectiveness of different aid types for persistence and timely bachelor’s degree attainment.

What finding relates subsidized loans to student persistence?

The study finds that subsidized loans taken in the first year of college have a positive effect on persistence.

Which factors most strongly predict timely degree completion?

Living on campus and first-year grade point average are identified as the most important predictors of timely degree completion.

Oct 15, 2026

Uploaded by dawugda