Study: Grant Aid Most Effective When Aimed at Poor Students


Grant programs for low-income students yield greater returns than assistance efforts aimed at students from higher-income families, new data suggests.

A working paper published this month by the Upjohn Institute found that Pell Grant recipients at four-year colleges in Texas saw improved academic and economic outcomes.

“Students eligible for the biggest grants take significantly more credits (during their sophomore and junior years),” according to an analysis of the research. “In addition, they are 13 percent more likely to graduate from college in four years.”

The Upjohn Institute, an independent research organization based in Michigan, regularly studies issues related to employment.

Its latest working paper shows a 5 to 8 percent increase in earnings for Pell Grant recipients. The Institute estimates that the federal government would recoup the entire cost of the grants in 10 years via “tax payments on the increased earnings.”

Conversely, a forthcoming paper from the Institute shows that grant aid dispersed to higher income students does not significantly increase student retention, credits earned, or GPA.

Read more about the Institute’s findings.

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