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PEDAR: Executive Summary  Institutional Aid to Full-Time Undergraduates Attending 4-Year Colleges and Universities
Trends in Institutional Aid: 1992-93 to 1999-2000
Academic Merit, Financial Need, and Institutional Grant Aid Among First-Year Students
Students with High Academic Merit
Institutional Grant Aid and Retention at Awarding Institution
One Year Later
Six Years Later
Research Methodology
Full Report (PDF)
Executive Summary (PDF)

This study found that the percentage of full-time students receiving institutional grant aid increased measurably between the early and late 1990s. Increases in aid were especially apparent for students in the highest income quartile, and much of the increase was awarded in the form of merit aid.

The study also found that students who achieved high academic merit in high school were more likely to receive institutional grant aid if they attended less selective rather than very selective institutions (in both the public and private not-for-profit sectors). However, an association between high-merit students receiving such aid and their financial need was not readily apparent in less selective private not-for-profit institutions, whereas in very selective institutions (both public and private not-for-profit), the likelihood of high-merit students receiving institutional grant aid increased with their financial need.

There was evidence that receiving institutional grant aid as freshmen was related to higher 1-year retention rates for certain groups of students, namely, those who had achieved moderate levels of academic merit and had enrolled in less selective institutions (both public and private not-for-profit), as well as those who had achieved high academic merit and enrolled in very selective public institutions. However, an association between institutional grant aid receipt in the first year and 6-year institutional retention (or degree attainment) was only evident among students in public institutions.

Taken together, the results are consistent with those of other studies reporting higher spending by 4-year colleges and universities on institutional aid (e.g., Cunningham et al. 2001), especially by less selective private institutions (Redd 2000; and Hubbell and Lapovsky 2002). Also, as discussed in Duffy and Goldberg (1998), the findings revealed that in the late 1990s, the percentage of high-income students receiving institutional grant aid (in particular merit aid) increased, as did the average amount they received. This study could not address whether institutional grant aid awards had increased the enrollment of the types of students that institutions sought. However, the findings did indicate that in private not-for-profit institutions, where most institutional grant aid is awarded, no measurable association could be detected between students’ receipt of institutional grant aid as freshmen and their graduating from the awarding institution (compared to unaided students), once other factors such as students’ academic merit, students’ financial need, and institutional selectivity were taken into consideration.

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