Financial Aid Policy: Lessons from Research

In the nearly fifty years since the adoption of the Higher Education
Act of 1965, financial aid programs have grown in scale, expanded in
scope, and multiplied in form. As a result, financial aid has become
the norm among college enrollees. The increasing size and complexity
of the nation's student aid system has generated questions about
effectiveness, heightened confusion among students and parents, and
raised concerns about how program rules may interact.

In this article, the authors review
what is known and what is not known about how well
various student aid programs work. They find evidence that lowering
costs can improve college access and completion, but this general
rule is not without exception. For example, the complexity of
program eligibility and delivery appears to moderate the impact of
aid, and for students who have already decided to enroll, grants that
link financial aid to academic achievement appear to boost college
outcomes more than do grants with no strings attached.