The impact of federal reductions in financial aid on the enrollment plans of past aid recipients

TR Number



Journal Title

Journal ISSN

Volume Title


Virginia Polytechnic Institute and State University


Actual and projected changes in the federal appropriations for direct student assistance programs in the early days of the Reagan presidency as well as rising educational costs were expected to adversely affect the enrollment of continuing financial aid recipients. Previous literature in financial aid has documented the relationship between financial aid and decisions about college, particularly for minority and low income students applying for the first time to less selective colleges. The purpose of this study was to describe the relationship between changes in amount of financial aid and the reported enrollment plans of a sample of past need-based aid recipients.

A survey was mailed to a random sample of 1,347 students who received financial assistance under Virginia's College Scholarship Assistance Program (CSAP) during 1981-82. Responses were received from 767 students. No significant differences between respondents and nonrespondents were determined.

Analysis of the data collected through the survey instrument revealed that the vast majority of the respondents planned to continue at the same college (88.3%) and only a very small proportion planned to withdraw (4.1%) or transfer to another college (7.5%). Approximately 40 percent of the respondents lost more than $500 in aid between 1982-83 and the previous year. When the decision to continue or transfer was examined by selected individual and institutional characteristics and by change in amount of aid, the variables of race, grades, grade level, and institutional cost and selectivity explained a significant portion of enrollment behavior. Respondents attending low cost and nonselective institutions, minorities, freshmen, and those with lower grades were found to be more likely than average to change their enrollment plans by transferring. The addition of change in amount of financial aid received across two years had no statistical effect when added to the variables of race or grades and only a very slight effect in increasing the likelihood of changing plans for freshman and for respondents enrolled in nonselective, low cost institutions. Parental income was not found to be significantly associated with change in enrollment plan for dependent students. Little of the variation in enrollment plans was explained by change in the amount of financial aid received. Financial concerns appeared to weigh most significantly for those planning to continue at the same college.