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Report Examines Impact of Last-Dollar Financial Aid

A new study looks at how the Bridging the Gap program at Rutgers University-Camden improved affordability and reduced financial stress for eligible first-year students.

Rutgers University has three campuses in New Jersey with Camden being the smallest. It also is a self-described “access” university that has attracted nontraditional students and students from traditionally underserved backgrounds. In an effort to make the university even more accessible, the Bridging the Gap program was announced in 2015. Rutgersfinancial

A report from the Community Development and Regional Outreach, Federal Reserve Bank of Philadelphia titled, “How Does Last-Dollar Financial Aid Affect First-Year Student Outcomes? Evidence from the Bridging the Gap Study” examines the impact on the first cohort, students who entered in 2016.

A last-dollar program looks at the gap between federal, state and other kinds of financial aid that’s available to students and the total cost. In this study, the university looked at the residual amount of tuition and campus fees left over after students had gotten their full award from the federal and state governments as well as institutional grants.

The requirements to be eligible for this first Bridging the Gap cohort were that students were New Jersey residents, U.S. citizens or permanent residents and they were first-year students accepted to Rutgers-Camden who fell within the economic criteria. For lower-income students, the remainder amount was completely discounted and for middle-income students the remaining tuition was reduced by half.

Utilizing analysis of enrollment and academic performance data as well as interviews, the study examines how these students viewed college access and opportunity given the additional money made available and how well they performed.

There were 246 participating students in the fall 2016 cohort. They were compared with students in the two prior years. Students in Bridging the Gap are required to complete 30 credits per academic year and maintain a 2.0 average. To facilitate this, changes were also made in academic advising and registration.

“One of the reasons that we were really interested in this program is because it’s at an institution that’s already oriented toward serving students who might not have traditionally had access to college education,” said Eileen Divringi, one of the authors of the report. “This financial aid program was conceived as another potential intervention for improving access and retention.”

The program appeared to increase the number of applicants among lower income and African-American students. More than 8,700 prospective students applied for admission in 2016 versus approximately 7,000 the previous two years. Based on interviews, students indicated the Bridging the Gap program did impact their decisions to apply and enroll.

“The clear message of college affordability really resonated with certain students,” said Keith Wardrip, a co-author of the report. Divringi said clear communication of affordability and access appeared to impact decision-making.

Students reported reduced financial stress. This included less accumulation of debt due to loans and the need to work somewhat less hours while attending college, but students still struggled to balance work, classes and studying. Educational costs such as textbooks, computer supplies, commuting and other expenses related to attending college continue to be a factor.

There were positive results when students were able to transition from their previous jobs to on-campus employment.

“A lot of students, since they are commuter students, retained the jobs they had or had jobs closer to where they lived,” said Divringi. “The administration did make a big push to make on-campus jobs more available, knowing that on-campus employers tend to be more flexible and more accommodating of students’ exam schedules.

“That was an interesting contrast we saw in the qualitative research,” she added. “Students who had jobs at off-campus employers seemed to struggle more with keeping their hours manageable, managing their commutes and balancing their class schedules. A lot of students we spoke to in the first year who worked off-campus ultimately transitioned to working on campus in their second year because it was much easier to manage their hours.”

The bureaucracy of financial aid continues to frustrate students. Divringi said students had a difficult time understanding all the components and why amounts fluctuate. Despite that, this program made students feel a four-year institution was affordable and community college was not their only option.

When compared to cohorts prior to Bridging the Gap, income-eligible students, particularly middle-income students, were more likely to meet the program’s academic requirements and return for a second year of college. Despite the support systems, about one third of the eligible students did not complete 30 credit hours.

“We’ll know after years three and five when we update this report the degree to which these requirements interfere with students remaining eligible, but there’s an early indication that meeting 30 credit hours per year could pose difficulty for some students, especially those who have to work and potentially those who can’t afford to take summer classes without additional financial aid,” said Wardrip.

Two more reports are planned in the future—one will examine this cohort after year three of college and the final report will take place at the end of five years.

“What I would like accomplish through these intro reports is to provide guidance for those [institutions] considering developing similar programs, so that they can learn what we’ve learned and potentially incorporate those lessons into new programs that could then be more successful for the students and for the institutions,” said Wardrip.

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