Date of Conferral
Public Policy and Administration
In 2008, state legislatures provided $6 billion in financial aid to 2 million low-income young adults. When low-income young adults receive state financial aid and do not complete college, states lose their investment because fewer people with degrees will contribute to the state's economy. Declining states' budgets have led to (a) the rising cost of higher education, (b) state merit-based aid that has targeted nonminority students from affluent backgrounds, and (c) state need-based aid that has targeted students further along in their college career. State need- and merit-based aid may contribute to the lack of college completion among low-income freshman students who rely on financial aid. The purpose of this study was to explore the differences between state need- and merit-based aid as enrollment factors of low college completion among low-income students in the U.S. This study was grounded on Tinto's model of social integration. Secondary data collected by the National Center for Education Statistics on 101,000 freshmen who attended 1,360 postsecondary institutions in 2003-04 and 2008-09 were used for this study. Logistic regression was used to test and compare two models. Logistic regression tested the relationship between the predictor variables of state need- and merit-based aid and degree completion. This study's results revealed that state merit-based aid had a greater predictive value than state need-based aid as enrollment factors of college completion among low-income young adults. This study contributes to positive social change by providing state policy makers with research results to evaluate and formulate state financial aid policies that will increase access to financial aid and college completion rates among low-income freshman students.