A working paper from the National Bureau of Economic Research found that need-based financial aid grant offers have little effect on completion trajectories for low-income college students.
The paper, which has not yet been peer reviewed, found that among four-year college students, grant offers increase two-year persistence by 1.7 percentage points. The effect on completing a bachelor's degree within six years was positive (1.5 percentage points) but not statistically significant, according to the researchers.
The effect on persistence and completion for two-year college students was also positive but not significant. Further exploratory results indicate that grant offers could reduce the completion rates of associate degrees for two-year community college students by around three percentage points.
Researchers also found that the effects didn't greatly vary by cohort, race, gender or the prior receipt of food stamps.