A small amount of financial aid, even $300, can go a long way toward helping a student graduate. Emergency aid or microgrants from colleges can be used to cover a last tuition bill or even to help pay for a financial emergency, like fixing a car or visiting a sick relative.
Microgrants aren’t new. But a growing number of colleges -- both community colleges and four-year institutions -- have data to prove that this form of institutional aid improves student retention and can even save a college money by preventing dropouts.
“I really like the idea of this and think it is definitely worth experimenting with more,” said Sandy Baum, a senior fellow at the Urban Institute and a prominent financial aid researcher, who has written about the approach.
Foundations and other funders are backing emergency aid. And two higher education associations are working with their members to encourage the practice and to explore which approaches are the most effective.
For example, the Coalition of Urban Serving Universities and the Association of Public and Land-grant Universities today released a report describing microgrant programs at 10 urban, public research universities. The report is designed to be a how-to guide for universities to create their own grants.
Some of the featured programs in the report are aimed at students who are a semester or two away from earning a degree, said Shari Garmise, vice president for the two groups' joint Office of Urban Initiatives.
“They are the hardest … the biggest loss,” she said. “You’re walking out with debt but no degree.”
One microgrant with a focus on students who are close to completing is Virginia Commonwealth University’s Graduation Funds program. To qualify, students must have earned at least 103 credits and have yet to register for their final semester. Recipients need to have an outstanding balance with the university of less than $5,000.
The VCU grants comes with one unusual requirement -- students must have a grade point average of 3.0 or less. That’s because students with better grades tend to find merit aid to continue, the report said.
University staff review financial aid packages and students’ histories to find and contact candidates for the grants. They offer eligible students up to half the money they owe, with a maximum grant of $2,500. VCU also counsels students on how to find the other half of the money, such as with a small loan. About 100 students get the grants each year, the university said.
Lauren Walizer is a senior policy analyst with the Center for Law and Social Policy (CLASP), which focuses on policies that help low-income people. She said interest in microgrants or emergency grants seems to be “ripening.” And it’s an intervention that can be cost-effective for colleges.
“A small amount of money,” said Walizer, “dramatically helps a student.”
For example, Georgia State University estimates that it gets a 200 percent return on investment for its Panther Retention Grant program, which is one of the largest and most established of completion-oriented microgrants offered by a university. Students can receive a few hundred dollars up to $2,000 through the program if they demonstrate unmet need, prove they are on track to graduate, have been dropped or are in danger of being dropped and owe a modest amount in tuition and fees.
Tim Renick, the university’s provost, said the program helped Georgia State weather the last recession.
“We were holding on to more students who weren’t dropping out but instead were paying bills and providing tuition and fees that helped our university get through a tough financial time,” he said, according to the report.
Role for Student Affairs
Garmise said the land-grant association will soon introduce $50,000 awards to nine of its member institutions, with a goal of helping those universities create their own microgrant programs. The Lumina Foundation and the Great Lakes Higher Education Guaranty Corporation are funding those awards and the report.
The interest in microgrants is part of a broader shift in the way many people in higher education look at aid, said Garmise.
“Now we’re starting to ask the question of how to use financial aid to get students out of institutions, to graduation,” she said, rather than just using aid on the front end of students’ enrollment.
The use of data analytics is making it easier for colleges to administer the grants, Garmise said. Institutions use the data to identify possible recipients, both by looking for students who are on track academically and who have unmet need.
There’s typically a big role for student affairs offices in running microgrants or emergency grants. That's because student affairs staff members are most likely to be able to identify students who need the aid.
NASPA: Student Affairs Administrators in Higher Education is conducting a study of the landscape for emergency grants, said Amelia Parnell, the group’s vice president for research and policy. Parnell said there is a broad range of grants that fall under the umbrella of emergency aid. (The Wisconsin HOPE Lab and Scholarship America last year used data and surveys to produce a report on emergency aid and how institutions are using it.)
The less restricted version typically is for students to use for a financial emergency, she said, like buying a plane ticket to visit a sick family member. Other programs, however, include contracts that recipients must sign, and requirements like seeing an adviser or taking a financial literacy course.
Still others come in the form of loans, some of which can be forgiven if recipients meet requirements -- graduating, in some cases.
CLASP is wary of emergency-aid loans for low-income students.
“That’s something we wouldn’t encourage an institution to take on,” said Walizer.
Emergency aid also can be either proactive or reactive. Some universities, like those featured in the APLU report, tend to find and track down recipients themselves. Others respond to requests from students, which are often received by student affairs offices.
Verification can be tricky in the reactive version. For example, Parnell cites a hypothetical situation of a student asking for help to cover a lease for an off-campus apartment, but where the lease isn’t in the student’s name.
“What information do you collect from students?” she said.
In one common scenario, in which students struggle to pay for food, Parnell said, colleges do not require verification.
Some colleges have gotten creative about how to identify recipients for microgrants. Kingsborough Community College, for example, last year began distributing an app to all incoming students that tells them about forms of aid available on campus. Students learn about emergency aid with the app, said Parnell, with more than 900 receiving awards of $500 to $1,000.
Emergency aid has subtle benefits, experts said, as well as immediate and tangible ones.
“Both the dollars and the psychological impact of the support from the institution in a time of crisis are likely to make a difference,” Baum wrote in a 2014 paper she co-authored.
Parnell agreed, saying emergency aid has been proven to have a “significant effect” in helping students graduate. She said NASPA's ongoing survey found that many colleges have had such programs in place for three years, and some are looking to increase the scale of those programs.
“We’re going to see a lot more of this work,” she said.