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Need-Based Financial Aid and College Persistence Experimental Evidence from Wisconsin

We examine the impacts of a private need-based college financial aid program distributing grants at random among first-year Pell Grant recipients at thirteen public Wisconsin universities. The Wisconsin Scholars Grant of $3,500 per year required full-time attendance. Estimates based on four cohorts of students suggest that offering the grant increased completion of a full-time credit load and rates of re-enrollment for a second year of college. An increase of $1,000 in total financial aid received during a student’s first year of college was associated with a 2.8 to 4.1 percentage point increase in rates of enrollment for the second year.