In 1993, the creation of Georgia’s HOPE Scholarship Program accelerated interest in understanding the effects of merit-based student financial aid. This article compares a sample of “borderline” HOPE recipients (students just above the eligibility threshold) with similar nonrecipients to examine differences on four college performance outcomes. The HOPE Scholarship recipients accumulated more credit hours, achieved slightly higher grade point averages, and were more likely to have graduated after 4 years of college. In addition, HOPE recipients who attended 4-year institutions of higher education were more likely to persist in college. Most merit aid recipients lost their scholarships, however, which slightly reduced recipients’advantages on grade point average and credit hour accumulation. Differences in persistence and graduation are significant only for those who maintain eligibility for the scholarship, suggesting that scholarship retention is critical if merit aid programs are to help achieve several of the broad goals of higher education.
Applebome, P. (1997, March 30). Educational plans clash over who should benefit. The New York Times, p. A10-A10.
2.
Astin, A. (1964). College dropouts: Personal and environmental factors associated with college dropouts among high aptitude students. Journal of Educational Psychology, 55, 219-227.
3.
Burd, S. (1997, February). The Clinton budget: Dramatic increases for Pell Grants and other aid programs. The Chronicle of Higher Education, p. A25-A25.
4.
Byron, K., & Henry, G. T. (1997). Report on the expenditure of lottery funds, fiscal year 1997. Atlanta, GA: Council for School Performance.
5.
Cornwell, C. M., Lee, K. H.,& Mustard, D. B. (2003). The effects of merit-based financial aid on course enrollment, withdrawal and completion in college. Unpublished manuscript, University of Georgia, Terry College of Business, Athens.
6.
Cornwell, C., Mustard, D. B., & Sridhar, D. J. (2001). The enrollment effects of merit-based financial aid: Evidence from Georgia’s HOPE Scholarship. Unpublished manuscript, University of Georgia, Athens.
7.
Dee, T. S.,& Jackson, L. A. (1999). Who loses HOPE? Attrition from Georgia’s college scholarship program. Southern Economic Journal, 66(2), 379-390.
8.
Dynarksi, S. (2000). Hope for whom? Financial aid for the middle class and its impact on college attendance. National Tax Journal, 53(3), 629-662.
9.
Dynarski, S. (2002). Race, income and the impact of merit aid. In D. E. Heller& P. Marin (Eds.), Who should we help? The negative social consequences of merit scholarships(pp. 73-91). Cambridge, MA: The Civil Rights Project at Harvard University.
10.
Education Commission of the States. (2001). Merit scholarships. Denver Education Commission of the States. Retrieved from http://www.ecs.org/ecsmain.asp?page=/html/issues.asp
11.
Georgia Board of Regents. (2001). Tracking the HOPE status of fall 1994 freshmen. Atlanta: University System of Georgia.
12.
Heller, D. E. (1997). Student price response in higher education: An update to Leslie and Brinkman. Journal of Higher Education, 68(6), 624-659.
13.
Heller, D. E. (2002). State merit scholarship programs: An introduction. In D. E. Heller & P. Marin (Eds.), Who should we help? The negative social consequences of merit scholarships(pp. 15-24). Cambridge, MA: The Civil Rights Project at Harvard University.
14.
Heller, D. E., & Rasmussen, C. J. (2002). Merit scholarships and college access: Evidence from Florida and Michigan. In D. E. Heller & P. Marin (Eds.), Who should we help? The negative social consequences of merit scholarships(pp. 25-40). Cambridge, MA: The Civil Rights Project at Harvard University.
15.
Henry, G. T., & Jones, J. (1997). Council for school performance 1996 annual report. Atlanta, GA: Council for School Performance.
16.
Henry, G. T.,& Rubenstein, R. (2002). Paying for grades: Impact of merit-based financial aid on educational quality. Journal of Policy Analysis and Management, 21(1), 93-109.
17.
HOPE Scholarship Joint Study Commission. (2004). Commission report. Carl Vinson Institute of Government, University of Georgia. Available from http://www.cviog.uga.edu/hope/report.pdf
18.
Hu, S., & St. John, E. (2001). Student persistence in a public higher education system: Understanding racial and ethnic differences. Journal of Higher Education, 72(3), 265-286.
19.
Leslie, L. L., & Brinkman, P. T. (1987). Student price response in higher education: The student demand studies. Journal of Higher Education, 58(2), 181-204.
20.
Longanecker, D. (2002, March/April). Is merit-based student aid really trumping need-based aid?Change, 34(2), 30-37.
21.
Mortenson, T. G. (1997, February). Georgia’s HOPE Scholarship Program: Good intentions, strong funding, bad design. Postsecondary Opportunity, 56, 12-14.
22.
Murdock, T. A. (1990). Financial aid and persistence: An integrative review of the literature. NASPA Journal, 27(3), 213-221.
23.
National Association of State Student Grant and Aid Programs. (2000). 30th annual NASSGAP survey report. Available from http://www.nassgap.org/researchsurveys/30thsur&rep.pdf
24.
Nickel, S. C. (2003). A short history of HOPEand an introduction to selected issues. Proceedings of the HOPE Scholarship Joint Study Commission. Athens: University of Georgia, Carl Vinson Institute of Government. Available from http://www.cviog.uga.edu/hope/030730history.pdf
25.
Sack, K. (1998, February 16). Georgia’s chief reveling in his sky-high ratings. The New York Times, p. A9-A9.
26.
Salzer, J. (2001, April 19). Dropping courses counts against HOPE: Eligibility for scholarship may be lost if students “attempted” course credits exceed established limit. Atlanta Journal Constitution, p. 5F-5F.
27.
Salzer, J.,& Jones, A. (2003, November 12). Tightened HOPE grading expected: Rule would cut third of scholarships. Atlanta Journal Constitution, p. 1A-1A.
28.
Stampen, J. O., & Hansen, W. L. (1999). Improving higher education access and persistence: New directions from a systems perspective. Educational Evaluation and Policy Analysis, 21(4), 417-426.
29.
St. John, E. P. (1990). Price response in persistence decisions: An analysis of the high school and beyond senior cohort. Research in Higher Education, 31(4), 387-403.
30.
St. John, E. P., & Starkey, J. B. (1995). An alternative to net price: Assessing the influence of prices and subsidies on within-year persistence. Journal of Higher Education, 66(2), 156-186.
31.
Tinto, V. (1975). Dropout from higher education: A theoretical synthesis of recent research. Review of Educational Research, 45(1), 89-125.
