Last-Dollar Financial Aid Can Help Low-Income Students Stay in School
A new report found that targeted, supplemental financial aid can be critical for low-income students looking to pay for their education.
For low- to moderate-income college students, targeted supplemental financial aid can be a difference-maker for their enrollment chances. Some schools offer additional funding after students have exhausted their initial financial aid, which can help cover as much as the entire tuition.
One such program, Rutgers University–Camden’s “Bridging the Gap,” showed that last-dollar financial aid can eliminate or reduce tuition and campus fee costs for income-eligible freshman students. It can also lead to an increased likelihood of enrollment, reduced financial stress, a decline in student loan debt dependence, and fewer work hours during the school year, according to a Federal Reserve Bank of Philadelphia report.
Bridging the Gap launched in fall 2016. The Federal Reserve report focused on the Rutgers program because – as a public regional academic institution, independent of economic background – it represented the school type most students will attend.
The study revealed many findings, beginning with income levels. The report’s co-author Keith Wardrip told public media outlet WHYY that for the admitted Rutgers-Camden students, notably African-Americans and lower-income attendees, the program can make a difference as these two groups are now 5 percentage points more likely to enroll at the school than earlier students.
The study also disclosed that affordability impacted students’ decisions, including the school type to attend like a community college versus public, four-year schools. The report revealed that, for students who qualified for considerable need-based or non-need-based financial aid, college probably would have been less expensive than they anticipated.
Students also expressed concerns about other expenses. “Educational expenses like textbooks or school supplies, even living expenses, such as food and commuting costs, those might seem like a relatively small percentage of the cost of college,” Waldrip told WHYY. “But for students, those are sort of the immediate day-to-day expenses.”
These expenses can impact students’ abilities to stay in college, forcing them to seek other money sources. A co-author of the report, Eileen Divringi, said that even students whose tuition had been entirely paid for still had to take out student loans to pay for these other expenses.
As for the study’s impact, the researchers hope this initial information can help schools that are interested in creating comparable programs. The study also comes at a time when affordability and college are hot topics and the research findings will likely add to the conversation.