Affording to Stay: Experimental Evidence on a Cost-of-Living Grant in Community Colleges

• In Event: From Access to Completion: Causal Evidence from Financial Aid and Transfer Interventions in Higher Education

Abstract

Motivation: The Pell Grant–long the cornerstone of federal need-based aid–no longer reflects the financial realities facing today's college students. In the 1970s, Pell covered approximately 80% of the cost of attending a public four-year public institution; today, it covers less than 30% (Protopsaltis & Parrott, 2017). This decline in purchasing power has deepened financial precarity for low-income students, particularly those attending community colleges, where non-tuition costs like housing, food, and transportation often rival or exceed tuition. For community college students–who are disproportionately low-income, first-generation, and racially minoritized–these non-tuition gaps may be decisive (Rodríguez-Hernández et al., 2020; Dynarski et al., 2022).  

A prevailing policy assumption is that simply increasing the size of the Pell Grant will close affordability gaps and raise educational attainment. Yet this approach rests on the contested premise that unmet need is the primary barrier to degree completion. Recent quasi-experimental evidence suggests Pell eligibility yields null to modest gains in enrollment and degree completion (Denning, Marx, & Turner, 2019), and those gains depend on how Pell interacts with loans and other aid programs (Eng & Matsudaira, 2021). These findings raise critical questions about whether unmet need alone explains low attainment, or whether financial instability during enrollment plays a more decisive role in student outcomes.

Meanwhile, state and local governments are playing an expanded role in higher education finance. With stalled federal action, many states have launched "free college" programs positioned as access-expanding and workforce development strategies. Yet, many such initiatives narrowly focus on tuition, overlooking broader costs that shape students' persistence. 

This study responds to these dynamics by evaluating a direct, need-based cost-of-living grant targeting non-tuition expenses. Offered as up to $3,500 per semester for four semesters–covering approximately 80% of participants' unmet need–the intervention provides a flexible, administratively feasible model for state-led college affordability reform. Its per-student cost is comparable to more complex, wraparound programs such as the Accelerated Study in Associate Programs (ASAP), but with fewer implementation demands. 

Methods: To examine whether targeted investments in living expenses can improve persistence and inform scalable policy reform, we implement a pre-registered randomized controlled trial (RCT). The study randomized 599 first-time, Pell-eligible community college students intending full-time enrollment in associate degrees to receive either up to $3,500 per semester in additional aid (treatment) or standard financial aid (control). We rely on administrative data tracking enrollment, credit accumulation, and aid receipt, alongside survey and interview data on financial insecurity, mental health, and engagement. Baseline equivalence was established, and treatment compliance was monitored through institutional records.

Results: Preliminary results show statistically significant gains in persistence for treatment students: a 7.5 percentage point gain in Fall Year 2 and 8.1 points in Spring Year 2, relative to control means of 57% and 46%, respectively. Survey and  interview data provide further insight into students’ financial stressors, coping strategies, and use of institutional resources. Final analyses, including the primary pre-registered outcome of three-year completion, will be available by Fall 2025.

Authors

• Sade Bonilla, University of Pennsylvania
  Presenting Author

• Veronica M. Minaya, Teachers College, Columbia University
  Non-Presenting Co-Author