Policy Insights | Financial Aid and Student Persistence

Financial aid issues have emerged in public policy in recent years as states and their higher education institutions struggle to determine how best to allocate limited resources across a wide range of financial aid programs. Not only must they consider the needs of their citizens and the state, they must also look at the distribution of funds among programs that serve financially needy students, those that reward academic merit, and those that serve students with special skills. However a state or institution decides to award its financial aid, there is the hope that by granting aid the student will persist in college and graduate. The actual granting of money is done with the expectation that the additional funds will either make it possible for the student to stay enrolled until graduation or will entice the student to stay at that particular institution or in that state. The major objective from the state and institutional perspective is to retain the student by providing financial assistance.