Performance-Based Scholarships: What Have We Learned?

By Betsy Prueter

A recently released brief from MDRC shares interim findings from performance-based scholarship (PBS) demonstration sites in six states (Arizona, California, Florida, Louisiana, New Mexico, New York, and Ohio). These scholarships typically provide students cash incentives for academic progress and are paid out at multiple times during the year if students maintain a certain grade point average and earn a minimum number of credits, hopefully enabling students to focus on their studies (without having to worry about pressing financial burdens), progress to a degree, graduate or transfer to a four-year college, and increase their earnings potential. This ongoing MDRC demonstration is designed to test whether performance-based scholarships improve academic performance. Specifically, the study seeks to understand the effects of PBS on (1) short-term academic outcomes, including the number of credits attempted versus the number completed; (2) the long-term academic outcomes, including persistence and completion; (3) how (and if) varying the amount and duration of PBS affect academic outcomes; and( 4) the types of students who benefit the most from PBS. Initial results show some evidence that PBS can improve academic outcomes; however, overall findings were modest, and future evaluation data are needed to determine whether the performance-based scholarship programs help students stay in school, earn more credits, and graduate.

Among the report’s findings:

• At most sites, students receiving performance-based scholarships were more likely to meet their academic benchmarks (e.g., completing 6 or more credits with a “C” average or better) than students in control groups in at least one semester.
• Students receiving performance-based scholarships earned more credits than students in control groups by the end of the first year in all sites except Florida and New Mexico.
• Based on data from this initial report, performance-based scholarships do not appear to increase retention from the first year of college to the second.
• PBS works just as well for a variety of students including at-risk students, parents, and first- generation students.
• In some sites, performance-based scholarship programs reduced educational debt of the student by over $300.
• In Ohio (the only site with data two years out), students receiving performance-based scholarships attained a degree at a higher rate than students in control groups.