Towards the Education Nation: Revisiting the Impact of Financial Aid, College Experience, and Institutional Context on Baccalaureate Degree Attainment Using a Propensity Score Matching, Multilevel Modeling Approach

To compete in the global marketplace, the U.S. economy heavily relies on higher education institutions to educate the college graduates and knowledge workers needed to create the innovative products and services of tomorrow. And yet, where once America led the world in educational attainment, recent data from the Organization for Economic Cooperation and Development indicates that the U.S. now ranks only 15th among major industrialized nations in college completion rates. As a result, increasing degree attainment and reclaiming America's spot at the top have become major policy objectives. Despite the heightened interest and a remarkable investment of $235 billion in total financial aid in 2010-11, however, research specifically directed at the intersection of degree attainment and financial assistance is surprisingly slim in quantity and challenged methodologically.This quantitative study sought to address limitations in the literature and examined the effects of financial aid in conjunction with students' college experiences and the institutional context on six-year degree attainment. Particularly, I studied the effects of various forms of financial aid, such as need-based and merit grants, subsidized and unsubsidized loans, and federal work-study, and how these differentially impact students from various income backgrounds. I also examined factors and experiences during students' pre-college, transition, and college attendance phases that affect degree completion at the individual level and how institutional structural-demographic characteristics, institutional and peer climate, and organizational behavior impact student success. In support of recent calls for more interdisciplinary perspectives in the study of persistence and degree attainment, I used a multitheoretical conceptual framework. To minimize endogeneity bias in the estimation of financial aid effects, I applied a propensity score matching technique in combination with a multilevel (HGLM) modeling approach. Data for this study was drawn from the Beginning Postsecondary Students survey (BPS:04/09), the Integrated Postsecondary Education Data System, and the Delta Cost Project. The final sample in this study encompassed N=6,561 students attending n=651 4-year colleges and universities in the U.S.Results in this study revealed that financial aid influences six-year degree attainment for all but high income students. Particularly for low income students, need-based grants from all sources (federal, state, and institutional) are found to significantly increase their chances to graduate, whereas unsubsidized loans severely lower their likelihood to obtain a baccalaureate degree. For middle income students, institutional need-based and merit grants are found to exert a positive influence on student degree completion. Results further confirmed a persistent attainment gap: despite all financial aid and controlling for students' academic performance, pre-college and college experiences, and institutional factors, low income students are found significantly less likely to obtain a baccalaureate degree.At the student level, this study also confirmed strong positive effects of academic performance in college and high school, living on campus, and being socially integrated into the campus environment. Factors found detrimental on student degree attainment are, for instance, initial transfer inclination, distance from home, and working more than 20 hours a week. In regard to contextual influences, attending a low selectivity institution is found to lower chances of degree attainment, as is attending colleges and universities with a high representation of part-time students and high share of individuals receiving federal grant aid. In contrast, institutional structural diversity, measured through the share of minority students on campus, is found to increase a student's likelihood of degree completion within six years