Report: Does Threat Of Pell Loss Lead To Improved Academic Progress?

By Charlotte Pollack, NASFAA Research Analyst 

Failure to meet Satisfactory Academic Progress (SAP) requirements puts a significant number of community college Pell Grant recipients at risk of being ineligible for Pell, according to a working paper just released by The Center for Analysis of Postsecondary Education and Employment (CAPSEE). In “Pell Grants as Performance-Based Aid? An Examination of Satisfactory Academic Progress Requirements in the Nation’s Largest Need-Based Aid Program,” Lauren Schudde and Judith Scott-Clayton examine the Department of Education’s current SAP policy and its effects on student outcomes. Findings suggest that failure to meet academic standards is not a Pell recipient-focused phenomenon, nor is it just concentrated at community colleges. 

The authors examined at complexities that exist in the process of retaining financial aid and the subsequent impacts on enrollment for low-income students. Using prior studies of performance-based aid and academic probation policies, they explored the argument that performance standards should incentivize effort through positive rewards but that policies are structured to provide negative consequences for failure to meet standards. 

While researchers found the threat of Pell loss could be a motivating factor for students to improve their efforts and thereby academic progress, they noted that because there is often little communication between the financial aid office and academic advisers, “early academic intervention is unlikely.” As a result, students are unaware of SAP policies and how they affect Pell eligibility. 

Nationally the highest rates of first-year GPA failure in 2012 were among community colleges (24.5 percent), but public four-year colleges were not far behind at 24.2 percent. These researchers further examination data from a state community college system that evaluates SAP at the end of each term and requires students to have a cumulative GPA of 2.0 or higher, complete at least 67 percent of all credit hours attempted, and complete their program of study within 150 percent of their expected time frame. The results were consistent with the national averages for community colleges, 21 percent of first-year Pell recipients are at risk of losing their Pell due to the SAP GPA criterion alone. 

When including the credit completion requirement, the overall first-year SAP failure rates approached 40 percent for students who entered in the fall of 2008. CAPSEE also examined Pell entrants’ enrollment by SAP status and found by the fall of the second year the rate of SAP failure is cut in half, and by the fall of the third year the rate is halved again; however this reduction appears to be due to dropout.

They also find that failing to meet the SAP requirement has a negative impact on persistence into the second year of college, but may improve associate degree attainment and transfer among students who were not discouraged from re-enrolling after failing to meet SAP early in their college career. While students who fail to meet SAP requirements are more likely to drop out, the authors wrote, preexisting factors that lead to low GPAs likely also lead to low persistence rates. For this reason it is difficult to separately identify Pell-related consequences of SAP failure, the authors wrote. 

These findings are consistent with what NASFAA has heard from members, who have previously indicated failing to meet SAP is not exclusive to Pell recipients. As the authors indicate, moving forward, more research should be done to explore the implications of tying need-based aid to performance standards and exploring data across multiple states and sectors.


Publication Date: 12/11/2014

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