The Influence of Financial Aid on Community College Students

By Ruiz, Eddy A. | Journal of Applied Research in the Community College, Fall 2008 | Go to article overview
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The Influence of Financial Aid on Community College Students

Ruiz, Eddy A., Journal of Applied Research in the Community College

The following citations for research and resource materials focus on the influence of financial aid on community college students.


Fiscal resources are vital to many minority and lowincome students who attend two-year institutions. Federal, state, and institutional aid impact student retention, degree attainment, college choice, and access. Not all financial aid is created equal or yields the same outcomes. The following resources are pertinent because the majority of studies have focused primarily on four-year institutions. The research presented provides national data sets and case studies that utilized qualitative and quantitative measures to analyze distinct financial aid resources as they related to community college students. The findings have broad implications for administration, advising, and policy makers as their outcomes influence enrollment trends, labor markets, and educational equity.

ERIC documents (references with "ED" numbers) may be read on microfiche at approximately 900 libraries worldwide. In addition, the full text of many documents is available online at Journal articles may be acquired through regular library channels, from the originating journal publisher, or for a fee from the following article reproduction vendor, Ingenta; email:, phone: 617-395-4046, toll-free: 1-800-296-2221, URL:

Dowd, A. C., & Coury, T. (2006). Effect of loans on the persistence and attainment of community college students. Research in Higher Education 47(1), 33-62.

This study examines public policies regarding the use of subsidized loans as financial aid for community college students. Using logistic regression, it analyzes the National Center for Education Statistics' Beginning Postsecondary Students (BPS 90/94) data to predict persistence to the second year of college and associate's degree attainment over five years. During the period under study, loans did not contribute to higher persistence and attainment rates. Loans are observed to have a negative effect on persistence and no effect on degree attainment. Estimates of the interaction effects of borrowing and income status are insignificant but demonstrate the need for further testing. The findings are attributed to a combination of the high uncertainty of degree completion among community college students and the negative affective component of indebtedness.

Gladieux, L., & Perna, L. (2005). Borrowers who drop out: A neglected aspect of the college student loan trend (National Center Report No. 05-2). The National Center for Public Policy and Higher Education: San Jose, CA.

Borrowers Who Drop Ou t is an important contribution to the National Center's and the nation's understanding of students who aspire to earn educational certificates and degrees, but do not achieve their goals - and yet are saddled with significant debt to repay. The researchers utilized the most recent and comprehensive data available from the U.S. Department of Education on students who first enrolled in postsecondary education in 1995-96, with a snapshot of the same students in 2001 . The findings are revealing, if not disturbing. Half of the students who enrolled in postsecondary education in 1995-96, also borrowed in 1995-96; more than 20% of those students dropped out of their educational programs, yet were burdened with significant debt. They had, in effect, the worst of both worlds- they did not benefit from the higher income associated with education beyond high school, and they accumulated significant educational debt. Many of these students were unemployed in 2001 and defaulted on their loans, thus damaging their credit standing. Most students benefit from loans and are able to repay them when they leave higher education. However, borrowing, combined with other risk factors for not completing higher education (such as working too many hours, lack of adequate preparation, and part-time attendance), puts many students, especially low-income and first-generation students, at a particular disadvantage.

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