Study Shows Maine Students Who Receive State Grants for College Are More Likely to Graduate

College is a major expense for families, and parents who save expect a large return on their investment: a degree that leads to a successful career. But parents aren't the only ones who want to see their kids succeed. States also encourage residents to earn a degree, viewing a college education as a driver of economic and social mobility. They also recognize that cost is a major barrier for prospective students, which is why they offer incentives like tax deductions and matching grants for families who contribute to 529 plans. And supporting students financially has other benefits, too. According to a study from Washington University in St. Louis, children who have some money in a college fund, as little as one dollar, are more likely to enroll and graduate from college than those who have nothing saved. The Finance Authority of Maine (FAME) is one example of a state organization that truly believes in the importance of higher education. To encourage more students to earn college degrees, FAME offers a need-based grant program for eligible residents. And according to Bruce Wagner, Chief Executive Officer at FAME, the legislature recently increased funding for the program, allowing for even higher awards. To measure the effectiveness of their program, FAME recently conducted a study that tracked college enrollment and degree completion of students who received the Maine State Grant from January 2005 to September 2014. Wagner is pleased by the results of the study, and that the program is proving to be successful. ï ¿ ½This study demonstrates how meaningful continued state investment can be for Maine students and our economy,ï ¿ ½ he says. RELATED: What is your state doing to promote saving for college? About the Maine State Grant Program To qualify for the program, students must be residents of Maine, enrolled at least half time at an eligible school and demonstrate financial need. FAME determines this need by setting a maximum Expected Family Contribution (EFC) level for eligibility. A student's EFC is the amount of money their family is expected to be able to pay for college out of pocket, and is calculated using income and assets reported on the Free Application for Federal Student Aid. For the time periods in the study, maximum SFC ranged from $3,000 to $7,000. FAME also sets a maximum grant amount each year, based on available funding. The program is funded mainly through state appropriations, but it also receives additional financial support from Maine's 529 college savings plan, the NextGen College Investing Plan. Yet funding for the program has not kept pace with the growing need for student aid in Maine. According to a recent study from the New England Board of Education, over the past 10 years the number of students who receive Maine state grants has grown by 58 percent, but the total dollars available to the program have only grown by 31 percent. RELATED: New research shows why families who aren't saving for college will have to borrow Grantees FAME's study included students who enrolled in college between January 2005 and September 2014 and received at least one Maine state grant award. The majority of these students were female (62%) and most were dependent students (63%). Over two-thirds of these grant recipients were the first in their households to attend college. Surprisingly, there were a large number of non-traditional college students who received the state grant. In fact, 44 percent of the students in the study were 23 years old or older when they enrolled in college, and 29 percent went to college part-time during their first term of enrollment. Results Of the 17,213 students who received grants during the study time period, 56 percent earned at least an associate degree or higher by 2014. Students with a college-educated parent were 10 percent more likely to finish college than first-generation college students, and females and dependent students were also more likely to earn a degree. The study also shows that the larger the grant amount a student received, the more likely they were to complete college. The majority of students in the study earned an associate degree (17%) or a bachelor's degree (41%) but there were also some who completed a certificate program (2%) or a Master's degree or higher (4%). While the percentage of Maine State Grant recipients who completed college within six years was smaller than the percentage of ï ¿ ½traditionalï ¿ ½ college students who graduated in the same amount of time, it doesn't necessarily mean that the program was ineffective. ï ¿ ½Traditionalï ¿ ½ students included those from all income levels, some of which would not be eligible for state grants. But when compared to other low-income students in Maine, those who received the state grant had a higher college completion rate (56% versus 40%). These findings were no surprise to Wagner, who has a very positive outlook for the Maine State Grant Program. ï ¿ ½We were not so much surprised by the results as pleased that the MSG is proving to be effective. And that Maine students, faced with economic and life challenges, continue to persevere and complete college as they know a higher education degree can lead to a brighter tomorrow,ï ¿ ½ he says. ï ¿ ½As for possible changes, we are not sure that we will change the program in the immediate future (boosting the grant by $500 for full-time students and $250 for part-time is a great development), but we are considering improvements over the long run that may help to drive completion rates. One idea is to tier the award for increased grant amounts as the student advances towards graduation. This could encourage persistence and completion.ï ¿ ½ RELATED: How much financial aid will you get? Use this tool to get an idea College is a major expense for families, and parents who save expect a large return on their investment: a degree that leads to a successful career. But parents aren't the only ones who want to see their kids succeed. States also encourage residents to earn a degree, viewing a college education as a driver of economic and social mobility. They also recognize that cost is a major barrier for prospective students, which is why they offer incentives like tax deductions and matching grants for families who contribute to 529 plans. And supporting students financially has other benefits, too. According to a study from Washington University in St. Louis, children who have some money in a college fund, as little as one dollar, are more likely to enroll and graduate from college than those who have nothing saved. The Finance Authority of Maine (FAME) is one example of a state organization that truly believes in the importance of higher education. To encourage more students to earn college degrees, FAME offers a need-based grant program for eligible residents. And according to Bruce Wagner, Chief Executive Officer at FAME, the legislature recently increased funding for the program, allowing for even higher awards. To measure the effectiveness of their program, FAME recently conducted a study that tracked college enrollment and degree completion of students who received the Maine State Grant from January 2005 to September 2014. Wagner is pleased by the results of the study, and that the program is proving to be successful. ï ¿ ½This study demonstrates how meaningful continued state investment can be for Maine students and our economy,ï ¿ ½ he says. RELATED: What is your state doing to promote saving for college? About the Maine State Grant Program To qualify for the program, students must be residents of Maine, enrolled at least half time at an eligible school and demonstrate financial need. FAME determines this need by setting a maximum Expected Family Contribution (EFC) level for eligibility. A student's EFC is the amount of money their family is expected to be able to pay for college out of pocket, and is calculated using income and assets reported on the Free Application for Federal Student Aid. For the time periods in the study, maximum SFC ranged from $3,000 to $7,000. FAME also sets a maximum grant amount each year, based on available funding. The program is funded mainly through state appropriations, but it also receives additional financial support from Maine's 529 college savings plan, the NextGen College Investing Plan. Yet funding for the program has not kept pace with the growing need for student aid in Maine. According to a recent study from the New England Board of Education, over the past 10 years the number of students who receive Maine state grants has grown by 58 percent, but the total dollars available to the program have only grown by 31 percent. RELATED: New research shows why families who aren't saving for college will have to borrow Grantees FAME's study included students who enrolled in college between January 2005 and September 2014 and received at least one Maine state grant award. The majority of these students were female (62%) and most were dependent students (63%). Over two-thirds of these grant recipients were the first in their households to attend college. Surprisingly, there were a large number of non-traditional college students who received the state grant. In fact, 44 percent of the students in the study were 23 years old or older when they enrolled in college, and 29 percent went to college part-time during their first term of enrollment. Results Of the 17,213 students who received grants during the study time period, 56 percent earned at least an associate degree or higher by 2014. Students with a college-educated parent were 10 percent more likely to finish college than first-generation college students, and females and dependent students were also more likely to earn a degree. The study also shows that the larger the grant amount a student received, the more likely they were to complete college. The majority of students in the study earned an associate degree (17%) or a bachelor's degree (41%) but there were also some who completed a certificate program (2%) or a Master's degree or higher (4%). While the percentage of Maine State Grant recipients who completed college within six years was smaller than the percentage of ï ¿ ½traditionalï ¿ ½ college students who graduated in the same amount of time, it doesn't necessarily mean that the program was ineffective. ï ¿ ½Traditionalï ¿ ½ students included those from all income levels, some of which would not be eligible for state grants. But when compared to other low-income students in Maine, those who received the state grant had a higher college completion rate (56% versus 40%). These findings were no surprise to Wagner, who has a very positive outlook for the Maine State Grant Program. ï ¿ ½We were not so much surprised by the results as pleased that the MSG is proving to be effective. And that Maine students, faced with economic and life challenges, continue to persevere and complete college as they know a higher education degree can lead to a brighter tomorrow,ï ¿ ½ he says. ï ¿ ½As for possible changes, we are not sure that we will change the program in the immediate future (boosting the grant by $500 for full-time students and $250 for part-time is a great development), but we are considering improvements over the long run that may help to drive completion rates. One idea is to tier the award for increased grant amounts as the student advances towards graduation. This could encourage persistence and completion.ï ¿ ½ RELATED: How much financial aid will you get? Use this tool to get an idea