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State-funded merit-aid programs prioritize academic metrics that make students competitive to enroll at more selective four-year colleges. This study examines one of only a handful of merit-aid programs that are designed to benefit community college students. Using difference-in-differences and event study regression with institution-level data between 2001 and 2021, we examined the influence of New Jersey’s Student Tuition Assistance Reward Scholarship (STARS) Program on community college enrollment and the number of students who transferred out within three years. We find that when compared to merit-aid programs that marginalize community college students, STARS is associated with an increase in community college enrollment for White and non-White students, but we find little evidence that it supports student transfer.