Paying Parents for Performance: The Performance-Based Scholarship Demonstration in Ohio

1. Paying Parents for Performance: The Performance-Based Scholarship Demonstration in Ohio Paulette Cha MDRC paulette.cha@mdrc.org Reshma Patel MDRC reshma.patel@mdrc.org Society for Research on Educational Effectiveness 2010 Conference: Research into Practice Washington, D.C. Thursday, March 4, 2010

2. Outline • Project Background • The Program • Program Impacts • Summary and Next Steps

3. The Problem: Many Community College Students Do Not Persist Among students who intend to earn a credential or transfer to a four-year institution, only half meet that goal within 6 years. Major obstacles: Competing work and/or family obligations Insufficient financial aid Inadequate students support services Lack of academic preparation

4. Why performance-based scholarships? Performance-based scholarships: • Need-based grants • Contingent on academic performance and/or student services • Paid directly to students • Paid in addition to other financial aid, such as Pell Goals: • Address unmet need • Incentivize behavior • Enable students to have more time on task

5. Literature Review • Student Achievement and Retention (STAR) Project: • Randomized experiment with three treatment groups • Found an increase in credits earned, an increase in GPA, and a reduction in academic probation for women • Angrist, Joshua et al. 2009. “Incentives and Services for College Achievement" • Georgia HOPE Project: • Merit-based aid program in Georgia • Evidence of increased college attendance and shift toward 4-year institutions • Dynarski, Susan. 2004. “The New Merit Aid” and 2000. “Hope for Whom? Financial Aid for the Middle Class and Its Impact on College Attendance” • ”

6. Literature Review (continued) • H&R Block FAFSA Experiment: • Randomized experiment with two treatment groups • Initial findings suggest increased FAFSA submission and enrollment in college • Bettinger, Eric P. et al. 2009. “The Role of Simplification and Information in College Decisions: Results from the H&R Block FAFSA Experiment” • Wisconsin Scholars Longitudinal Study: • Randomized study on the impact of private need-based financial aid • Currently underway under the direction of Sara Goldrick-Rab and Douglas N. Harris

7. Literature Review (continued) • Opening Doors Louisiana • Randomized experiment testing the impact of a performance-based scholarship on low-income parents • Study found that program group students were more likely to enroll in college and earned more credits • Richburg-Hayes, Lashawn et al. 2009. “Rewarding Persistence: Effects of a Performance-Based Scholarship Program for Low-Income Parents The Performance-Based Scholarship in Ohio: A Replication of Opening Doors Louisiana study • Similarities: TANF Funding, target population • Differences: State need-based aid, economy

8. Program Model Student-Level Random Assignment Evaluation conducted at three Ohio institutions: • Lorain County Community College • Owens Community College • Sinclair Community College • Enrolled 2,285 students in total: 60% in the program group, 40% in the control group

9. Scholarship Model • Award Benchmarks: • Full-time award: $900 per semester or $600 per quarter for a “C” or better in 12+ credits • Part-time award: $450 per semester or $300 per quarter for a “C” or better in 6-11 credits • Maximum total scholarship was $1,800 for all schools • One-time, lump-sum payment at end of term • Program duration: 2 semesters / 3 quarters

10. Eligibility • Parent of a minor child • Expected Family Contribution = 0 • 18+ years of age • U.S. citizen and Ohio resident • Not incarcerated

11. Early Analysis • Fall 2008 cohort only: 1,300 study students, about 60% of total sample • Follow-up period covers duration of scholarship period: 2 semesters / 3 quarters • No post-program analysis

12. Baseline Characteristics

13. Scholarship Receipt • Almost three-quarters of students received an award in the first term of the scholarship • Over 60% of students received an award in the second term of the scholarship • Over 80% of students received an award in at least one term of the scholarship

14. Financial Aid Outcomes Statistical significance levels are indicated as: *** = 1 percent; ** = 5 percent; * = 10 percent.

15. Academic Outcomes:1st Program Term Statistical significance levels are indicated as: *** = 1 percent; ** = 5 percent; * = 10 percent.

16. Academic Outcomes:2nd Program Term Statistical significance levels are indicated as: *** = 1 percent; ** = 5 percent; * = 10 percent.

17. Academic Outcomes:Program Year Statistical significance levels are indicated as: *** = 1 percent; ** = 5 percent; * = 10 percent.

18. Summary Reduction in educational debt: Program group students were awarded $237 fewer loan dollars Increased number of credits attempted: Program students attempted more credits in 2nd program term Increased number of credits earned: Program students earned 2 credits more over the first program year No impact to date on term-to-term persistence: Both groups persisted at high rates

19. Next Steps Ohio is one of the states being studied in a wider demonstration testing variations of performance-based scholarships at seven colleges and one intermediary: • Target group • Dollar amount and duration of scholarships • Counseling and service components All programs are random assignment evaluations Early reports for each state in the coming months, and final reports in 2011 – 2012

20. Questions? Paulette Cha Operations Associate paulette.cha@mdrc.org Reshma Patel Research Analyst reshma.patel@mdrc.org