Early Findings of ‘Aid Like A Paycheck’ Study Are a Mixed Bag
Students who receive biweekly financial aid disbursements in some cases were better off than those who received a single, large disbursement, according to preliminary findings from a report on disbursing “Aid Like A Paycheck.”
The study is being conducted by MDRC, an education and social policy research organization, which is looking at how community college students fare when they receive biweekly financial aid disbursements instead of the traditional lump-sum disbursements at the start of a semester.
The mixed-methods study started in 2014 and is being conducted at two community colleges in the Houston, TX, area: San Jacinto College and the Houston Community College System (HCC). Combined, the institutions serve about 130,000 students per academic year. The study will conclude in 2018 and the report released last month provides a snapshot of the findings so far.
At the outset of the study, eligible students were randomly assigned to either a standard group who received financial aid refunds in the traditional way, or to a program group who received biweekly disbursements. The preliminary findings released last month examine the experiences of over 6,000 students enrolled over three semesters to determine whether those who received biweekly disbursements have different academic or financial outcomes than their peers who received their funds the traditional way.
The findings of the study so far “present a mixed bag,” but students who received their aid biweekly “were not harmed academically or financially by the policy, and on some measures, were better off than those who received a standard lump sum refund,” according to the authors of the report.
On the one hand, the institutions were able to disburse financial aid biweekly as intended, disbursing six to eight refunds per student with average payments between $300 and $500 per refund. However, communications about the policy and financial aid in general were often unclear to students and many students reported struggling financially, regardless of which disbursement group they were in.
Students who received biweekly disbursements were more likely to feel that their finances caused significant stress at the beginning of the term, but the two groups reported comparable levels of financial stress by the end of the semester. Biweekly disbursements also reduced the use of federal loans and students’ debt after just one semester, with students receiving an average of $82 less in loan disbursements and accumulating an average of $24 less in debt after their first semester.
“Many students struggle financially, and although biweekly disbursements of financial aid cannot change the fact that existing aid often does not cover the full costs of attendance, this policy still has the potential to provide academic and financial benefits to students,” the authors wrote in the report.
As noted previously, the final results of the study will be presented in 2018 and will include an additional 2,500 students and up to three more semesters of follow-up to better understand how students are impacted by biweekly disbursements.
Publication Date: 7/6/2017
