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Does Giving Students a Financial Incentive Help Them Graduate On-Time?

By Allie Bidwell, Communications Staff

This year, nearly 2 million students across the country are expected to walk across the commencement stage, shake their college president’s hand, and graduate with bachelor’s degrees. But only a small fraction of those students made the journey in just four years. Most take five or six years. Others never graduate at all.

With a renewed focus on college completion, schools nationwide have been implementing programs over the last several years to encourage students to graduate on time. Some simply arm students with the knowledge that graduating sooner will save them money in the long run – they’ll spend less on tuition and fees, room and board, and the other costs associated with attending college. They’ll also likely enter the workforce sooner and reduce the amount of lost earnings they’d incur by spending a fifth or sixth year in school.

But other programs at the institutional, state, and even federal level are giving students a stronger financial incentive to stay on track to graduate on time through grants, tuition discounts, and emergency aid.

“Reducing the time to degree, something as simple as that is going to go a long way to reduce the cost of higher education to students,” says Bruce Vandal, senior vice president for results at Complete College America, a national nonprofit that works with states to increase college attainment. “From an equity point of view, it absolutely makes no sense to ask students to spend more time and money to complete their degree. It’s frankly a very regressive approach to higher education.”

Typically, students need 120 credits to complete a degree program. That means they’d need to take 15 credits per semester for four years to graduate on time. However, many students only take 12 credits each semester, because that’s the minimum to be counted as a full-time student. But after eight semesters of taking 12 credits, students would fall short by 24 credits – another academic year. And with other barriers along the way – not being able to register for a required course, or changing majors, for example – some students rack up as many as 150 or 160 credits by the time they graduate. Those extra courses might not have been required for their degrees, and cost extra money.

Having a sound academic plan, and taking 15 credits per semester can go a long way toward helping students stay on track, Vandal says.

Many schools and state agencies have adopted some form of Complete College America’s “15 to Finish” program, which gives students incentives to enroll in more credits each semester. Those incentives can come in a variety of forms, though.

At Temple University, the “Fly in 4” program serves as a sort of contract between the university and its students. Full-time freshmen and transfer students who wish to participate agree to meet certain checkpoints throughout their academic career – such as meeting with an academic advisor once a semester, signing up for classes during the early registration period, earning 30 credits per academic year, and having a graduation review prior to the start of their senior year. In return, the university promises that if a student meets all of his or her checkpoints and is not on track to graduate, the remaining required courses will come at no cost to the student.

On top of that, the 500 students with the most significant financial need receive a $4,000 grant over the course of one year if they agree to work no more than 15 hours per week off campus.

“Do we still see students who struggle? Sure. But students are still coming in, meeting with an advisor,” says Jodi Levine Laufgraben, vice provost for academic affairs, assessment and institutional research at Temple University. “Because this program promotes building relationships, we’re seeing some students resolve financial difficulties earlier than they might have otherwise.”

Laufgraben says students who sign the agreement and meet their checkpoints are more likely to stay on track, and typically have higher GPAs. Tracking the students and meeting with them regularly also gives advisors more of an opportunity to identify students who might need more help, and allows them to proactively reach out to those students, she says.

Grand Valley State University in Michigan started a tuition discounting program about five years ago. “The Grand Finish” gives seniors a 10 percent tuition reduction if they are on track to graduate in four years. The reduction is funded through a direct application of the performance funding it receives from the state of Michigan.

“I noted some years ago that about 30 percent of our students who graduated in four years didn’t have any debt,” says university President Thomas Haas of his decision to pursue this initiative.

In the last five years, he says about 11,000 students have been eligible for the tuition reduction, and more than half of the university’s four-year graduates have no student loan debt. The average debt for four-year graduates who do take out loans is about $16,000, compared with $24,000 for those who graduate in six years. In that same time, the university also narrowed its graduation gap between minority and non-minority students.

And last year for the first time, Haas says, the number of four-year graduates exceeded the number of five-year and six-year graduates combined.

“That was a real milestone for me, indicating that this program, as well as other retention initiatives, are really working,” he says.

At the state level, some agencies are tying state grants to credit enrollment.

The state of Indiana, for example, has taken more of a “stick” approach, rather than the “carrot” incentives of additional aid or tuition reductions. Students are required to complete at least 30 credits each year in order to “renew their aid for the following year at the same level,” according to a state report on the program’s progress since 2013. Students who complete 24 credits receive a reduced amount of aid, and those who complete fewer than 24 credits are not able to renew their aid. The report showed that in the last few years, more students are enrolling in and completing at least 30 credits per year, and many are enrolling in summer courses.

Likewise, Minnesota requires students to be enrolled in 15 credits per semester to be eligible for the full amount of its state grant.

Still, there are barriers that prevent students from taking additional courses or enrolling in summer school.

The Obama administration has made college access and completion a focal point of its overall higher education agenda, and is pushing for expanded federal financial aid to help students stay in school and finish on time. President Barack Obama has requested funding to bring back the year-round Pell Grant so students can have the resources they need to take courses year-round if they need to. The On-Track Pell Bonus would reward students who stay on track by taking 15 credits per semester with an increase in the maximum Pell Grant award of $300.

“It’s ridiculous to discourage students from enrolling for a significant amount of time,” Vandal says of the administration’s Pell Grant initiatives. And although the Pell Bonus is a smaller amount of money, “it at least sends the message that higher credit intensity makes sense.”

 

Publication Date: 5/31/2016


David S | 5/31/2016 5:57:58 PM

We've all seen students who zero in on 12 credits because it's enough for a full aid package and in some cases, lower tuition than a more sensible 15 or more. I think we need to look more at transitioning to 15 as the FT standard rather than adding more aid for >12. Otherwise we leave ourselves open for accusations of failing to do everything we can to get students done with their degree on time. I'd consider an exception for students in their final year who have taken enough credits previously that they can finish up by taking 12 per term.

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