Abstract
The purpose of this retrospective cohort study was to determine whether and to what extent need-based financial aid affected first-year student persistence for Black and Hispanic students at a medium-sized, private, 4-year college in the northeast United States. The primary independent variables of the study were the amount of need-based financial aid awarded to a student in their first semester, and self-identified race or ethnicity. Three research hypotheses helped examine the research question by determining the significance of need-based financial aid and race or ethnicity on first-to-second semester persistence at the cohort institution. Chi-square and Fisher’s exact tests, as well as probit and logistic regression models, were utilized to measure and compare rates of persistence between students from different racial and ethnic backgrounds. The findings demonstrated that while persistence rates for students from separate racial and ethnic backgrounds significantly differed at the cohort institution, such differences could not be attributed to need-based financial aid. In order to address disparate persistence rates by students from differing racial and ethnic backgrounds, two solutions were proposed. The proposed solutions included reducing institutional and student dependence on loan programs, and the expansion of a newly created institutional office supporting diversity, equity, and inclusion with the goal of eliminating the difference in first-to-second semester persistence rates for students from separate racial and ethnic backgrounds. This study has broad implications for institutions of higher education that seek to improve student outcomes for students from traditionally underrepresented backgrounds and institutional culture surrounding racial and ethnic diversity.
Keywords: Higher education, need-based financial aid, persistence rates