Pell Grants as Performance-Based Aid? An Examination of Satisfactory Academic Progress Requirements in the Nation's Largest Need-Based Aid Program

Schudde, Lauren; Scott-Clayton, Judith E.

The Federal Pell Grant Program is the nation’s largest need-based grant program. While
students’ initial eligibility for the Pell is based on financial need, renewal of the award is
contingent on their making satisfactory academic progress (SAP)—meeting minimum academic
standards similar to those proposed in models of performance-based scholarships. It is not clear
how many students are affected by failure to meet SAP standards, or how the policies shape
student outcomes. In this study, we draw from literature on performance-based funding and
academic probation to consider the potential implications of SAP standards. We describe federal
guidelines and illustrate how SAP is evaluated in a statewide community college system. Using
administrative data with term-by-term measures of Pell receipt, student grades, attempted and
earned credits, persistence, degree attainment, and transfer, we employ regression discontinuity
and difference-in-differences approaches to examine the magnitude of SAP failure and its
effects. Our results suggest that a substantial portion of Pell recipients at community colleges are
at risk for Pell ineligibility due to their failure to meet SAP grade point average (GPA) or credit
completion requirements. Approximately a quarter fail to meet the GPA standard alone. When
the credit completion requirement is taken into consideration, the first-year SAP failure rate
approaches 40 percent. Our preferred difference-in-differences estimates show mixed effects of
SAP standards: Failing to meet the GPA requirement has a negative impact on persistence into
the second year, but it may improve associate degree attainment and transfer among students
who are not discouraged from reenrolling.


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More About This Work

Academic Units
Community College Research Center
Community College Research Center, Teachers College, Columbia University
CAPSEE Working Paper
Published Here
January 22, 2015