Financial aid and completion rates at diverse public, four-year, higher education institutions

The main purpose of student financial aid is to improve student success. Success can be defined as improving students\u27 access to higher education, increasing institutional choices, and increasing graduation rates (Davis, 2001). Research has focused on financial aid and student success. Financial aid has been associated with improving access for low income and minority students (Heller, 2005). However, research has not proven that all types of financial aid are effective in increasing choice and the graduation rates of these groups of students (Kerkvliet & Nowell, 2005; Kim, 2004); Thus, the purpose of this study was to determine if financial aid improved student success by increasing the graduation rates of students attending four diverse types of higher educational institutions: Hispanic Serving Institutions (HSIs), Historically Black Colleges and Universities (HBCUs), other institutions that serve high (25% or higher) proportions of minority students (HMSIs), and Predominantly White Institutions (PWIs). In order to do this, the trends in financial aid and graduation rates were first analyzed by the four types of institutions. Following this, statistical analyses revealed relationships between financial aid and graduation rates in these four types of institutions; Integrated Postsecondary Education Data System (IPEDS) data from over 170 institutions were compiled for analyses. Six years of data were evaluated starting with the IPEDS data collected in 1999. Statistical processes used included ANOVA and regression analyses. The results indicated that there has been a rise in financial aid and graduation rates in all four types of institutions. However, the growth in both graduation rates and financial aid varied by institutional type. Graduation rates increased at HBCUs to a lesser degree than at HSIs, HMSIs, and PWIs. This indicated that HBCUs lost ground to these other types of institutions. Using ANOVA, significant differences were found between graduation rates at HSIs, HBCUs, HMSIs, and PWIs in 2005. Both HSIs and HBCUs had significantly lower graduation rates than did the HMSIs and PWIs during that year; All four types of institutions experienced increases in federal grant aid, state grant aid, institutional grant aid, and loans between 1999 and 2005. HBCUs saw the greatest rise in average dollar amounts taken in loans but the lowest percentage rise in institutional grant aid awarded to students. By 2005, on average, HBCU students took on {dollar}4000 in loans, a {dollar}1000 increase since 1999; When regression analyses were performed, state grant aid awarded in 1999 was a significant predictor of 2005 graduation rates at HMSIs but not at HSIs, HBCUs, or PWIs. Average institution-based grant aid provided in 1999 was a significant predictor of 2005 graduation rates for HMSIs and PWIs but not HSIs or HBCUs. No relationships were found between federal grant aid or loans and graduation rates at any or all of the four institutional types. In other words, the dollar amounts of loans and federal aid did not increase or decrease the likelihood of graduation when data from all four institutional types were combined or when data from each of the four institutional types were analyzed independently; The results of this study refute the premise that the amount of financial aid improves success for all low income and minority students at all institutional types through improving their graduation rates. Further research is needed in order to identify the specific factors that influence the impact of financial aid awards on student success