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New research from the Federal Reserve Bank of Philadelphia analyzes the impact of a scholarship offered by Rutgers University-Camden. The Bridging the Gap scholarship is a "last-dollar" financial aid program that grants mostly lower-income first-year undergraduate students from New Jersey a full or partial tuition discount after all need-based federal, state and institutional grants are applied. This form of aid is common among free college programs. But some experts prefer first-dollar versions, which issue scholarships before other forms of aid are counted.

The new study found largely positive impacts of the last-dollar approach by Rutgers. The scholarship substantially boosted enrollment of lower-income New Jersey students at the university. Students also reported less financial stress, reduced reliance on student loan debt and the ability to work fewer hours at jobs.

However, the researchers also said the "bureaucratic nature" of the financial aid system, including challenges with the program's implementation, was frustrating and sometimes discouraging for the scholarship's recipients.

"These challenges may have muted the program’s effect on persistence and credit completion for eligible lower-income students," the study said.