Report shows targeted financial aid improves student retention

A report presented today to the Governance Commission studying higher education in Louisiana shows strategically targeting need-based financial aid dollars could improve retention rates for students—increasing their chances of graduating from college with a degree. The Bill and Melinda Gates Foundation funded the report, whose authors are Noel-Levitz and the American Institutes of Research. It shows high school grade point averages are the strongest variable in predicting retention; Pell Grants improve retention the most for at-risk students; Pell Grants coupled with Louisiana’s GO Grants improve retention more than Pell alone, by 14%; and increasing GO Grants up to $4,000 and targeting them towards students with weak overall financial aid awards could most positively impact Louisiana’s retention rates. The GO Grant Program was established in Louisiana in 2007-08; its awards go to students who are eligible for federal Pell awards to supplement those grants. According to Noel-Levitz, one of the major goals of the report was to determine the amount of financial aid that leads to the best student retention levels. The results show that the most positive impact of increased aid occurs when meeting 55-60% of a student’s need, and declines after that point. The full 16-page report is available here.