Financial Aid and Persistence in Community Colleges: Assessing the Effectiveness of Federal and State Financial Aid Programs in Oklahoma

Article excerpt

Abstract

Using a longitudinal, state-wide dataset, this study assessed the effect of financial aid on the persistence of full-time students in associate's degree programs at the Oklahoma community colleges. Three financial-aid sources were examined: the Oklahoma Higher LearningAccess Program (OHLAP), Pell grants, and Stafford loans. Results indicate that these forms of financial aid, alone and in combination, were predictors of persistence measured in terms of the student progressing from 1st year status to 2nd-year status. The effect of financial aid, however, was moderated by ethnicity and income.

Keywords

student financial aid, student persistence, minority students, low-income students, Pell grants, Stafford loans, Oklahoma Higher Learning Access Program

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Access and affordability have traditionally been concepts affiliated with the culture and inherent mission of community colleges (Bragg, 2001; Cohen & Brawer, 1996). Because of their relatively low costs, community colleges have been heralded as a viable path to higher education for many financially challenged student populations (Katsinas, Alexander, & Opp, 2003; King, 2002). The average annual tuition costs at community colleges are substantially lower than at state universities and at private institutions (Frerking, 2007). However, despite low tuition costs, attending a community college on a full-time basis requires substantial financial resources, especially for low-income students. Full-time community college students who do not live with their parents face, on average, educational budgets of approximately US$12,300, including transportation and other expenses in addition to room and board (Baum & Ma, 2007).

As is the case at 4-year institutions, decreased state funding for community colleges endangers their affordability and drastically affects the offerings and operations of these institutions (Glass & Jackson, 1998; Kenton, Huba, Schuh, & Shelley, 2005; Mullin & Honeyman, 2007). As a result, tuition and fees have been strategically increased to offset institutional needs. Given the demographics of the general community college student population, increases in tuition and fees may substantially affect access for a largely low-income student population (Hippensteel, St. John, & Starkey, 1996). Moreover, the decline of need-based aid and the rise of government loans adversely affect low-income students who are more likely to enroll in community colleges (Dowd & Coury, 2006).

Community college affordability affects persistence as well as access. Studies have shown that the financial burden of paying for college partially explains the high attrition rates in community colleges (Dowd & Coury, 2006; Hagedorn, Maxwell, & Hampton, 2002; Hippensteel, et al., 1996; King, 2002; Paulsen & St. John, 2002; St. John & Starkey, 1994). Of the students who began their studies at community colleges in 1995-1996 with the intention of earning a bachelor's degree, only 23% had accomplished that goal within 6 years; 39% had not earned a degree or certificate and were no longer enrolled (Baum & Ma, 2007). These figures warrant concern, considering the fact that community colleges enroll more than four of every 10 college students, including a disproportionate number of African Americans, Hispanics, and Native Americans (Baum & Ma, 2007).

Community college students are particularly dependent on financial aid (Dowd & Coury, 2006). In fact, for many underserved student populations, the availability of financial aid often provides the sole opportunity for entry into institutions of higher learning (Corer & Somers, 2001; Horn & Nevill, 2006; Romano & Millard, 2006). Several studies have investigated the effects of specific financial aid programs on student access and retention, but none have sought to determine which model or combination of financial aid packages is more effective among community college students. …