State Merit Aid Programs: Responses by Florida Community Colleges

State financial aid policies have long focused on need-based aid programs to reduce inequalities in higher education access and completion. During the last 15 years, however, many states have shifted toward broad-based merit aid programs (Dynarski, 2004). Although such aid programs can increase access, they can also encourage grade inflation in high school (Henry & Rubenstein, 2002) and provide incentives for college students to enroll in fewer and easier courses, withdraw from classes, and increase summer school credits (Cornwell, Kyung, & Mustard, 2005). Thus, although the new merit aid programs seem to increase the probability of enrolling in higher education, they can lead to student behavior that partially undermines academic achievement. The implementation of new financial aid programs may also provide postsecondary institutions with incentives to alter the way that they operate, particularly when they exist in increasingly difficult and competitive funding environments. Despite the fact that community colleges currently enroll nearly half of all students in higher education (National Center for Education Statistics, 2006), previous research on the response of colleges to new aid programs has been largely limited to four-year colleges. A recent study conducted by the Community College Research Center (CCRC) sought to better understand how two-year public colleges react to new state merit-based financial aid programs by evaluating the institutional behavior of each of Florida’s 28 community colleges before and after th