Summaries of Broader Financial Aid Research
In addition to the individual lever pages that summarize evidence from high school-based interventions aimed at increasing college affordability, this domain also includes high-level overviews of the broader research on the impacts of financial aid. These summaries highlight what we know about the impacts of different types of financial aid—such as need-based aid, merit-based aid, and student loans—on student postsecondary outcomes like enrollment, persistence, and completion. While these policies and programs generally fall outside the direct control of high schools, they offer valuable context for those working in high schools and relevant evidence for those working at other levels to improve students’ college access.
This section is organized around six types of financial aid and each category includes: (1) A brief Key Issue Overview to introduce the topic, (2) a Summary of Research Evidence describing the impact on student outcomes, and (3) a Learn More section that includes links to syntheses of relevant research as well as practitioner tools and resources to support the understanding and use of the evidence (including state-specific context where available). It's important to note that the financial aid categories below are not fully discrete. For example, some merit-aid programs also consider financial need, and promise programs may include merit- and/or need-based eligibility criteria. We group programs into the category that best reflects their primary structure or policy design, while noting relevant nuances.
While impacts vary across aid type and program, some general themes emerge across the financial aid research:
- Grant aid programs that combine financial aid support with wraparound services, such as advising/mentoring, tutoring, or targeted outreach, tend to be more effective at improving student enrollment and completion outcomes.
- Designing financial aid programs and application processes to be simple and straightforward—combined with clear outreach and marketing—can help increase take-up, especially among low-income students and those who might not otherwise enroll in college.
- Students with the greatest financial need are often the most likely to benefit from financial aid.
Student Loans and Related Interventions
Key Issue Overview
Student loans are a common and necessary part of financing college for many families. Undergraduate students can borrow loans from both federal and private lenders, though federal student loans typically offer lower interest rates and have more flexible repayment options. Colleges vary in whether and how they include student loans in financial aid award letters, which can impact how families understand their options.
Unlike grants or scholarships, loans must be repaid. While loans can expand access to college for students who would otherwise be unable to afford it, some students and families are hesitant to borrow, due to concerns about long-term debt and repayment. Borrowers who do not complete a degree are especially vulnerable to repayment challenges (Levine et al., 2024).
Because federal student loans have long been widely available in the U.S., it is difficult to isolate their effects on initial college enrollment and subsequent outcomes. As a result, most research on student loans focuses on students already enrolled in college, examining how factors such as informational interventions or policy changes affecting loan availability influence student outcomes (Dynarski et al., 2022).
K-12 practitioners can help educate students and families about student loans and navigating borrowing decisions. This may include sharing tools that estimate future loan balances and monthly payments; connecting families with financial aid resources; and ensuring students understand both the potential risks and benefits of borrowing student loans to pay for college.
The Research Clearinghouse includes evidence on interventions related to helping students understand college costs, financial aid, and borrowing, including studies focused on addressing student loan aversion and personal finance course graduation requirements.
Summary of Research Evidence
Postsecondary Enrollment and Persistence
One randomized study at a large community college found that changing the default financial aid award letter to include student loans (which students could accept or decline) increased borrowing, credit accumulation, GPA, and the likelihood of transferring to a four-year college, but had no effect on student enrollment (Marx & Turner, 2019). Among students already enrolled, the evidence is mixed. Several studies found that being offered loans increased enrollment intensity and persistence (Dynarski et al., 2022). In contrast, a separate study at a large community college found that students who were offered loans but had not yet made a decision whether to accept were less likely to borrow when reminded of the amounts borrowed by recent graduates (Marx & Turner, 2020).
College Completion and Longer-Term Outcomes
The evidence on the effects of student loans on graduation is mixed. Several studies have found null effects of student loan access on graduation rates (Dynarski et al., 2022; Herbaut & Geven, 2019). However, one study in Texas found that increased student loan limits led to a 6-percentage point increase in bachelor’s degree attainment as well as higher post-college earnings and lower default rates (Black et al., 2020).
Learn More
Research Evidence:
- College Costs, Financial Aid, and Student Decisions (Dynarski et al., 2022) [pages 29-32]
Practitioner Tools and Resources:
- College Scorecard Resources (U.S. Department of Education): The Department of Education offers extensive resources for teachers and counselors to support the use of the College Scorecard, including lesson plans, activities, and materials The College Scorecard is an interactive tool that provides detailed information about colleges’ price, graduation rate, median debt, and median post-college earnings. Students can use it to explore average outcomes at specific postsecondary institutions or compare outcomes across schools. These resources can support students in making informed borrowing decisions by helping them understand how much debt they may face by enrolling in different programs/institutions, contextualize this debt in relation to potential future earnings, and identify programs and colleges that may offer a stronger return on investment.
- For example, Activity 4 in the Educator Toolkit, "Grasping Financial Commitments," includes a presentation on loans and repayments. The lesson includes videos, discussion prompts, and a handout to help students better understand what taking on student debt entails.
- Your Financial Path to College Tool (Consumer Financial Protection Bureau): A tool to help users estimate how much potential borrowers will owe in student loans and how much they’ll need to repay those loans. This resource also helps users understanding unfamiliar language about loans and how to avoid potential pitfalls.
- The Consumer Financial Protection Bureau offers other resources around student loans related to repaying student loans and exploring federal student loan cancellation and forgiveness.
- Student Loan Calculators (Mapping Your Future): This organization provides various calculators related to student loans, including a student loan repayment calculator to estimate student loan payments; a student-loan debt/salary wizard that calculates the salary need to pay a given student loan debt; and an income-based repayment calculator to estimate monthly payments under the income-based repayment plan.
- This organization also offers other resources to help families create a plan for paying for college.
Education Tax Credits and Deductions
Key Issue Overview
The federal government offers several tax benefits to help offset the cost of college or career training, including two tax credits—the American Opportunity Credit and the Lifetime Learning Credit. Prior to 2021, some families could also deduct up to $4,000 in tuition and fees, depending on their income. Families can still deduct up to $2,500 in student loan interest paid each year (IRS, 2025).
Although these tax incentives aim to make college more affordable, several factors may reduce their impact, particularly for low-income students. Tax credits are claimed only after the academic year ends, which limits their ability to address immediate financial barriers to enrollment. Additionally, because eligibility depends on having sufficient tax liability, the benefits disproportionately flow to middle- and upper-income families (Dynarski & Scott-Clayton, 2018).
Summary of Research Evidence
College Enrollment
Although relatively few studies have examined the effect of higher education tax benefits, existing research finds no evidence that tax credits and deductions influence college enrollment. Studies testing the impact of sending families information about tax credits, aimed at increasing awareness, also found no effect on enrollment among current or prospective students (Dynarski et al., 2022; Herbaut & Geven, 2019).
Learn More
Research Evidence:
- College Costs, Financial Aid, and Student Decisions (Dynarski et al., 2022) [pages 24-25]
- What Works to Reduce Inequalities in Higher Education? A Systematic Review of the (Quasi-) Experimental Literature on Outreach and Financial Aid (Herbaut & Geven, 2019). See Appendix Table C.6 (page 69) and C.12 (page 76) for summaries of individual studies on the effects of tax credit interventions. This paper was published as a peer-reviewed journal article in 2020, but we link to the working paper throughout this section since the published article is behind a paywall.
Practitioner Tools and Resources:
- College Tuition Tax Credits Overview (College Board): A quick overview of tax credits for higher education, targeted at students and families.
- Tax Benefits for Higher Education Overview from the IRS and the Department of Education: Accessible summaries of current higher education-related tax benefits.. Includes information on eligibility requirements and steps to utilize the various tax credits and deductions.
State Funding
Key Issue Overview
Direct appropriations from states to public colleges and universities are a key funding source for these institutions. These state investments aim to ensure affordable access to higher education for state residents and support state attainment and workforce goals. In 2024, states contributed an average of $11,683 per full-time equivalent student in educational appropriations to public colleges, although this number varied substantially by state and institution type (SHEEO, 2024). State appropriations for higher education tend to mirror trends in the broader economy, increasing during periods of growth and decreasing (more sharply than many other budget categories) during economic downturns (SHEEO, 2024).
Over time, students and families have taken on an increasing responsibility for covering the cost of public postsecondary education, reflecting a shift in the balance between state support and what students pay. This shift is measured by the “student share,” which captures the proportion of total education revenue at public institutions that comes from net tuition and fees (excluding state and institutional financial aid, but including federal grants and loans). In 1980, the average student share in the U.S. was 20.9%. By 2024 it had nearly doubled to 39.3% (SHEEO, 2024).
When state appropriations to public colleges and universities decline, institutions often respond by raising tuition or cutting spending in areas critical to student success, such as instruction, academic support, and student services (Cummings et al., 2021). These funding-related decisions can negatively affect student access and completion, particularly at less-resourced institutions like broad-access two- and four-year public colleges (Cummings et al., 2021).
Understanding how state funding to colleges and universities varies across institution types—and the role that these funds play in supporting college affordability and student success—can help K-12 educators and school leaders make sense of the broader higher education landscape. Recognizing how shifts in state funding affects the availability of student supports within colleges and shapes college outcomes can also help secondary staff guide students in making informed decisions about their postsecondary pathways.
Summary of Research Evidence
Postsecondary Enrollment
When states cut direct appropriations to their public colleges and universities, in-state undergraduate enrollment decreases, and some students shift from public to for-profit institutions. At public four-year research universities, enrollment of out-of-state students increases (Cummings et al., 2021). Local funding changes can similarly influence enrollment behavior. For example, increases in community college tuition subsidies—funded by local taxes within a community college’s taxing districts—have been shown to positively impact enrollment among in-district residents who qualify for the subsidy (McFarlin et al., 2018).
College Financial Decisions
Public colleges typically respond to changes in state funding in two main ways: (1) raising tuition revenue and (2) reducing educational spending. Increasing tuition revenue is more feasible for larger, better-resourced four-year colleges, especially more selective institutions that can increase their enrollment of out-of-state and international students (who pay higher tuition). Broad-access four-year colleges and community colleges have limited ability to increase their tuition and must offset reductions in state funding by cutting expenditures in key areas that support student success, including spending on instruction, academic support, and student services (Cummings et al., 2021).
Graduation and Credential Completion
Declines in state appropriations to public colleges leads to lower graduation rates and fewer degrees and certificates awarded across both two- and four-year public colleges. These negative effects are strongest at community colleges, in part because these colleges must respond to state funding cuts by decreasing educational spending in areas critical for success. Conversely, increases in state appropriations to public colleges helps shorten the time to degree among four-year enrollees and increases transfer of community college students to four-year colleges (Cummings et al., 2021).
Post-College Outcomes
Changes in direct state funding for public institutions can also have long-term effects on students’ financial well-being well into adulthood. For example, students who attend college during periods of increased state appropriations are less likely to take out student loans. Research finds those starting at community colleges during periods of increased funding may experience other improved personal financial outcomes, such as higher credit scores, greater likelihood of having an auto loan and having a higher credit score (Chakrabarti et al., 2020).
Learn More
Research Evidence:
- Public Investment in Higher Education: Research, Strategies, and Policy Implications (Cummings et al., 2021). See Data Downloads: Database of research literature on the effects of general operating appropriations for individual study summaries of research on changes in state appropriations to public colleges.
- State Disvestment and Tuition at Public Institutions (Webber, 2017)
- State Spending on Higher Education: Testing the Balance Wheel over Time (Delaney & Doyle, 2011)
Practitioner Tools and Resources:
- State Higher Education Finance (SHEF) Report (State Higher Education Executive Officers Association (SHEEO)): This annual report summarizes state and national trends in higher education funding, tuition revenue, and enrollment, showing both data from the most recent year and trends over time. The report discusses how state investment in higher education has changed over time, and what this means for college affordability and access. This resource is interactive, and users can examine graphs and data for specific states.
- This resource includes state profiles that provide an overview of state and local funding in individual states.
- Trends in College Pricing Report (College Board): This annual report summarizes information about current college prices (both sticker price and net price) as well as how college costs have changed over time.
Need-Based Aid
Key Issue Overview
Need-based aid provides grants, which do not need to be repaid, to students from lower-income backgrounds based on a measure of a family’s ability to pay for college. The federal Pell Grant program provides aid to low-income students that can be used at eligible institutions across the country. In addition, many states operate their own need-based aid programs, often with the requirement that students attend an in-state institution. Programs vary in their requirements and generosity, but most require students to complete the FAFSA (a few states have alternative pathways to determine students’ eligibility for need-based aid). While need-based aid can significantly lower the price of college for low-income students and has been shown to positively impact college enrollment and completion, many eligible students miss out on this aid due to lack of awareness and/or barriers in the application process.
K-12 educators and school leaders play an important role in helping students access need-based financial aid that they are likely to qualify for. High school staff can identify and encourage likely-eligible students (such as those receiving free- or reduced-price lunch) to complete the FAFSA, either by offering direct assistance or by connecting families with external resources such as financial aid advisors at local colleges (learn more from the Increasing Financial Aid Applications section). In addition to promoting FAFSA completion, high school administrators and staff should be aware that approximately 25% of FAFSA filers, and an even larger share of low-income applicants, are selected for verification (Guzman-Alvarez & Page, 2021)—a process that requires families to submit additional documentation to confirm their eligibility for aid. Although verification involves sensitive financial information that schools cannot handle directly, they can still play a supportive role in ensuring that verification does not prevent students from receiving aid by preparing families for the possibility of additional steps; helping families understand what verification entails; and connecting them with appropriate resources. Because some students may be selected for FAFSA verification during the summer after graduation, schools may want to consider whether they have the capacity to offer outreach or support during this time—or they can proactively provide information about the verification process to college-intending graduates before they leave high school.
Beyond the application process, high school staff can also help students and families who are likely eligible for need-based aid better understand their actual cost of attending college. Many students overestimate what they will be expected to pay (Gallup 2024; Velez, 2019), which can discourage them from applying or considering a broader set of options. In 2019-20, the average tuition and fee sticker price (published price) for a full-time undergraduate student at an in-state public four-year college was $12,490, but the average net price (price actually paid) was $3,270. Many students attending in-state public colleges receive enough grant aid to fully cover their tuition and fees. In 2019-20, 31% of all full-time undergraduate students at in-state public four-year colleges paid zero dollars for their tuition and fees and 64% of those with family incomes below $40,000 had their tuition and fees fully covered. Schools can promote tools such as net price calculators to help students estimate their out-of-pocket costs at different institutions, supporting informed decision-making and greater access to affordable college pathways (Ma & Pender, 2023).
Summary of Research Evidence
Postsecondary Enrollment and Persistence
Overall, need-based aid increases college enrollment and persistence when it reduces the price students have to pay for college (Dynarski et al., 2022). A meta-analysis on the effects of financial aid found that grant aid with a need-based component leads to an increase in student persistence. The studies included in the meta-analysis show that need-based aid increases year-to-year persistence, defined as continuing from one academic year to the next (e.g., freshman to sophomore year, sophomore to junior year), by an average of 2.5 percentage point. Need-based aid also increases within-year persistence, defined as continuing from one term to the next within the same academic year, by an average of 3.7 percentage points (Nguyen et al., 2018). The effectiveness of need-based aid varies based on characteristics of the aid program such as the timing and amount of aid (Herbaut & Geven, 2019).
Evidence looking at the effects of the Pell Grant specifically is mixed, with some studies findings small positive effects on enrollment and persistence and others finding no impact (Dynarski et al., 2022). Research suggests that the program may have limited impact on whether students enroll in college though it may affect where they enroll (Cummings et at., 2021). Generally, studies that examine the effect of receiving a Pell Grant (or the amount received), conditional on FAFSA completion, tend to find positive effects. In contrast, studies that compare Pell-eligible and ineligible students, regardless of FAFSA completion, often find null results. Experts suggest that these inconsistencies may result from confusion around Pell eligibility and complexities with completing the FAFSA, which may limit students’ access to the aid and thereby reduce the observable impact of the program (Dynarski et al., 2022). As discussed in the Increasing Financial Aid Applications section, the FAFSA can be a complex process, particularly for families selected for verification—a process that requires applicants to submit additional documentation and has been shown to decrease college enrollment (Lee et al., 2021).
College Completion and Post-Collegiate Outcomes
On average, need-based financial aid increases the likelihood of degree completion. Studies focused on on-time completion, defined as earning as associate degree within two years or a bachelor’s degree within four to five years, find an average increase of 2 percentage points. When degree completion is measured over a longer period (i.e., three or more years for an associate degree or six or more years for a bachelor’s degree), the average effect rises slightly to 2.4 percentage points (Nguyen et al., 2018). Several studies have found small positive effects of receiving a Pell Grant on degree completion (Dynarski et al., 2022; Eng & Matsudaira, 2020), while evidence on the grant’s impact on earnings is mixed—one study reports a small positive effect while another finds no effect (Dynarski et al., 2022).
Learn More
Research Evidence:
- Public Investment in Higher Education: Research, Strategies, and Policy Implications (Cummings et al., 2021). See Data Downloads: Database of research literature on the effects of financial aid for individual study summaries of research on state financial aid.
- College Costs, Financial Aid, and Student Decisions (Dynarski et al., 2022) [pages 14-17]
- What Works to Reduce Inequalities in Higher Education? A Systematic Review of the (Quasi-) Experimental Literature on Outreach and Financial Aid (Herbaut & Geven, 2019). See Appendix Table C.2 (pages 62-64) for summaries of individual studies on need-based financial aid. This paper was published as a peer-reviewed journal article in 2020, but we link to the working paper throughout this section since the published article is behind a paywall.
- The Effects of Grant Aid on Student Persistence and Degree Attainment: A Systematic Review and Meta-Analysis of the Causal Evidence (Nguyen, 2018) This paper was published as a peer-reviewed journal article in 2019, but we link to the working paper throughout this section since the published article is behind a paywall.
Practitioner Tools and Resources:
- 50-State Comparison: Need- and Merit-Based Financial Aid (Education Commission or the States): This resource provides information about the need- (and merit-) based aid programs in each state, including details on how financial need is calculated and any additional requirements that students must meet to be eligible for the aid program.
- Pell Dollars Left on the Table Report & Online Dashboard (National College Attainment Network [NCAN]): This resource presents data on the potential Pell Grant dollars left unclaimed by high school graduates in the Class of 2024—funds that eligible students could have accessed by completing the FAFSA. It includes an interactive dashboard that breaks down the data by state.
- Providing Support for Students Facing FAFSA Verification, from UAspire and NCAN: Two blogs with advice about providing support to families selected for FAFSA verification
- Net Price Calculators from CollegeBoard and uAspire: These net price calculators allow families to estimate the actual cost of attending specific colleges, based on their individual financial circumstances.
Merit-Based Aid
Key Issue Overview
Merit-based aid programs provide scholarships to students based on academic achievement indicators, such as high school GPA or college entrance exam scores (e.g., SAT or ACT). Some programs award aid purely based on these performance indicators, while some also incorporate financial need or provide additional funding for eligible low-income students. Merit-based aid may be awarded by states, individual colleges and universities, or private organizations. Most state-based programs are limited to students attending college in-state. In addition to meeting initial eligibility requirements, many merit-aid programs also require students to maintain a minimum GPA once enrolled in college to continue to receive the award.
Although state financial aid was originally awarded entirely based on financial aid—and most state aid today remains need-based—merit-based programs have grown substantially since 2000 and now account for approximately 25% of state aid dollars, with considerable variation between states (Cummings et al, 2021). Many states adopted new merit-aid programs during this time, often funded by state lotteries, with goals including promoting high school academic achievement and encouraging high-achieving high school graduates to remain in the state. (Cummings et al, 2021; Dynarski et al., 2022). While some view merit-based aid as a way to increase college affordability for a broader range of students, including those from middle-income families, critics have noted that these programs disproportionately benefit students from higher-income families, who are more likely to meet eligibility criteria and are already likely to attend college regardless of this additional financial support.
K-12 schools can play a key role in helping students understand and access merit-based aid. This includes ensuring students are aware of eligibility criteria, encouraging them to take college entrance exams that may be used to assess eligibility, and supporting them academically to meet the eligibility requirements. School counselors and teachers can help ensure that eligible students maintain their awards throughout college by helping students and families understand that merit aid often comes with ongoing performance requirements, and connecting students with campus resources, such as academic advising and tutoring, that support continued academic success. Many state aid programs, especially those funded by state lotteries, can experience large fluctuations in allocations across years, which can lead to changes in award amounts or eligibility criteria over time. School staff can support students by staying up to date on current program details and communicating to students current eligibility requirements and any uncertainties. This helps students make more informed decisions and develop backup plans in case the aid amount changes or the scholarship becomes unavailable them.
Summary of Research Evidence
Postsecondary Enrollment
Although early evaluations of state merit aid programs suggested increases in college enrollment among recent high school graduates, more recent evidence shows modest results. Recent evidence suggests that state merit aid affects wherestudents enroll, such as shifting students from two- to four-year colleges, rather than affecting whether they enroll at all (Cummings et al, 2021; Dynarski et al., 2022). In some cases, state merit aid may have unintended impacts, such as inducing students into eligible public colleges rather than non-eligible private institutions that may offer more resources for students (Dynarski et al., 2022). Additionally, merit aid awarded without consideration of need has been shown to have limited effects for underrepresented student groups and may widen existing inequalities in education access and attainment (Herbaut & Geven, 2019).
College Persistence and Completion
Recent meta-analyses and systemic reviews of financial aid studies found that aid granted solely based on merit did not have a statistically significant impact on student persistence or degree completion (Herbaut & Geven, 2019; Nguyen, 2018). As noted earlier, many merit-based aid programs require students to maintain a minimum GPA in college to continue to receive their award, a requirement that leads many recipients to subsequently lose their award. Studies of Tennessee’s merit-based lottery scholarship, Tennessee HOPE, found that over a quarter of scholarship recipients lost their scholarship at the first renewal checkpoint due to not meeting the GPA requirement (Carruthers & Özek, 2016; Cummings et al., 2022). Research shows that losing aid due to falling below the minimum GPA thresholds can negatively affect students’ persistence and completion (Carruthers & Özek, 2016; Cummings et al., 2022; González Canché, 2023).
In contrast, performance-based scholarships—those given to students already enrolled based on academic performance while in college—have shown more promising effects on persistence and completion (Dynarski et al., 2022; Herbaut & Geven, 2019). Researchers suggest that these effects may be driven by changes in how recipients allocate their time while enrolled (Dynarski et al., 2022), which may help students graduate more quickly, even if the awards do not increase overall completion rates (Herbaut & Geven, 2019).
Learn More
Research Evidence:
- Public Investment in Higher Education: Research, Strategies, and Policy Implications (Cummings et al., 2021). See Data Downloads: Database of research literature on the effects of financial aid for individual study summaries of research on state financial aid.
- College Costs, Financial Aid, and Student Decisions (Dynarski et al., 2022) [pages 17-10]
- What Works to Reduce Inequalities in Higher Education? A Systematic Review of the (Quasi-) Experimental Literature on Outreach and Financial Aid (Herbaut & Geven, 2019). See Appendix Table C.3 and C.4 (pages 65-68) for summaries of individual studies on merit-based and performance-based financial aid. This paper was published as a peer-reviewed journal article in 2020, but we link to the working paper throughout this section since the published article is behind a paywall.
- The Effects of Grant Aid on Student Persistence and Degree Attainment: A Systematic Review and Meta-Analysis of the Causal Evidence (Nguyen, 2018) This paper was published as a peer-reviewed journal article in 2019, but we link to the working paper throughout this section since the published article is behind a paywall.
Practitioner Tools and Resources:
- 50-State Comparison: Need- and Merit-Based Financial Aid (Education Commission or the States): This resource provides information about the merit- (and need-) based aid programs in each state, including details on what merit- and other requirements students must meet to be eligible for the aid program.
- Find more information about your state’s merit-based aid programs (and other state-funded financial aid) on your state’s higher education agency website.
“Free College” Programs
Key Issue Overview
Promise programs and “free college” programs aim to make college more affordable by covering some or all of tuition, and sometimes fees, for eligible students. These programs are designed to increase college-going rates and promote economic and workforce development. While many focus on recent high school graduates, some also include or target adult learners. The landscape of promise programs includes both local initiatives that serve specific school districts or regions, or individual colleges, as well as statewide programs. There is considerable variation in program design. Some offer broad eligibility, while others include income- or GPA-based criteria. Local programs often cover two- and four-year colleges, whereas statewide programs tend to focus on in-state community colleges. Programs also vary in the types of credentials and academic pathways they cover, some include a broad range of degrees and certificates, while others are limited to programs aligned with high-demand occupations and local workforce needs. Lastly, programs differ in generosity: many use a last-dollar model, covering remaining tuition costs only after other sources of federal, state, or institutional aid are applied. Others are first-dollar, providing aid regardless of other available funding. Most promise programs are structured to be simple and accessible, guaranteeing tuition support for students who complete a limited number of required steps, such as such as submitting the FAFSA and enrolling in an eligible institution.
While promise programs are typically funded and administered at the state or local level—through a combination of state governments, higher education institutions, and philanthropic and community partners, K-12 schools play a critical role in supporting students in learning about and accessing these opportunities. District leaders and secondary school staff are often on the front lines of helping students and families learn about and navigate program requirements, and consider the benefits and tradeoffs as they plan to enter a postsecondary pathway. Further, secondary schools can help ensure that interested students are on track to meet program eligibility, either based on high school academic performance requirements (e.g., GPA) or in ensuring that students are on track to meet the requirements of eligible institutions (e.g., four-year colleges). Unnderstanding the specific details of the promise programs available to their students, as well as what the evidence says about their potential impacts, can help K-12 staff support students in making informed postsecondary decisions.
Summary of Research Evidence
Postsecondary Outcomes
Overall, existing research finds that both local and statewide promise programs increase college enrollment at eligible institutions (Dynarski et al., 2022; Swanson et al, 2017). While some evidence suggests that these programs may encourage students to attend college who might not have otherwise enrolled (e.g., Carruthers & Fox, 2016; Gurantz, 2020), much of the observed impact appears to be on where students choose to enroll—often shifting them toward institutions where the scholarship can be used. For example, community college-focused programs may redirect students from four-year to two-year colleges (e.g., Bell, 2021; Gurantz, 2020), while programs that cover both types of institutions may shift enrollment towards four-year colleges (e.g., Bifulco et al., 2019; Page et al, 2019). Enrollment effects tend to be the strongest when programs are more generous and have fewer student- and institution- eligibility restrictions (Swanson et al, 2017). In contrast, programs that have extensive eligibility rules or post-enrollment requirements tend to have lower-take-up, which can limit their effectiveness (e.g., Scott-Clayton et al., 2022; Toutkoushian et al., 2015). The evidence of impacts on other college outcomes (i.e., performance, persistence, completion) is mixed. Though there is some evidence of positive effects on these outcomes, most studies suggest these gains are driven primarily from getting more students enrolled in college, rather than an improvement of outcomes once enrolled (Monaghan, 2024). Evidence on longer-term workforce outcomes is limited and mixed. One study of a local promise program in Tennessee found a small positive effect on wages (Carruthers et al., 2023) while another study of a local Michigan promise program found null effects (Hershbein et al., 2021).
Secondary School Outcomes
Evidence on the impact of promise programs on secondary school outcomes is mixed and limited, with more research needed to better understand the impact of college promise programs on K-12 outcomes. Some studies found small improvements in secondary outcomes including decreased suspensions, increased college aspirations, and improved academic performance (e.g., GPA, standardized test scores), though other studies find null results (Anderson, 2021; Odle, 2022; Swanson et al, 2017). Additionally, several studies have found that local promise programs can increase school district enrollment (e.g., Hershbein et al, 2013; Sohn et al., 2016). The most promising effects tend to occur from local promise programs that cover tuition at four-year colleges (Monaghan, 2024).
Subgroup Outcomes
Evidence on whether promise programs reduce educational disparities by gender, race, and income is also inconclusive: some studies find reduced gaps, others show no change, and some find widening disparities (Gándara, & Li, 2020; Monaghan, 2024). More broadly, while the evidence on promise programs suggests that program design influences outcomes, more research is needed to understand which program elements are most effective in achieving desired impacts.
Potential Mechanisms
There are multiple ways that promise programs may influence student outcomes, and the strongest evidence supports two key mechanisms: the financial support as well as the power of messaging a clear financial guarantee. Evidence from Tennessee and Oregon’s statewide programs provide support of the impact of the money itself. The adoption of Tennessee’s statewide program led to a decrease in the percentage of students taking out student loans and the average loan amount among borrowers (Odle et al., 2021) and both Tennessee and Oregon’s state programs increased the total average grant aid received by students (Odle et al., 2025). Several studies provide direct and in-direct evidence pointing to the key role of messaging effects (Dynarski et al., 2022; Monaghan, 2024). This mechanism suggests that promise programs affect students’ college-going decisions by clearly communicating that their tuition will be covered (or heavily subsidized) at eligible institutions. Studies of last-dollar program programs have shown positive enrollment effects among students receiving little or no additional aid through the program (e.g., Pell-eligible students at community colleges; e.g., Carruthers & Fox, 2016; Anderson et al., 2024), suggesting that the promise of affordability, rather than the actual dollar amount, can be a powerful motivator. This is reinforced by studies at selective public four-year colleges showing that proactive, targeted outreach to low-income students—guaranteeing free tuition at the University of Michigan and free tuition plus housing at the University of Texas at Austin—significantly increased college applications and enrollment among eligible students (Burland et al., 2022; Dynarski et al., 2021; Giani et al., 2025). Together, this body of evidence highlights the importance of how promise programs are framed and communicated, and suggest that clarity and simplicity in messaging are key mechanisms driving their effects.
Learn More
Research Evidence:
- Summary of Findings from Studies of State, Institutional, and Local College Programs (Perna, 2025) [see Table A2 on pages 44-45]. This is part of a larger report titled College Promise Programs in the Midwest: Insights for Higher Education Leaders. The table is not limited to programs in the Midwest.
- How Powerful Are Promises? A Systematic Review of the Causal Mechanisms and Outcomes of "Free College" Programs in the United States (Monaghan, 2024)
- College Costs, Financial Aid, and Student Decisions (Dynarski et al., 2022) [pages 19-23]. This paper was published as a Handbook chapter in 2023, but we link to the working paper throughout this section since the published article is behind a paywall.
- How do Promise Programs Benefit K-12 Schools? (Harris & Miller-Adams, 2022)
- Promises Fulfilled? A Systematic Review of the Impacts of Promise Programs (Swanson et al., 2017). This paper was also published as a book chapter in 2022, but we link to the working paper throughout this section since the chapter is behind a paywall.
- Local-Level, Place-Based Scholarships: A Review of the Literature (Anderson, 2019)
Practitioner Tools and Resources:
- MyPromise Tool (College Promise): A student-focused, searchable national database of College Promise programs. The tool includes an interactive map, advanced search filters, and detailed profiles for each program covering funding levels, eligibility criteria, and available support services. Designed primarily for students and their families, this tool allows users to compare multiple programs to find options that best fit their individual needs.
- 2022 Overview of College Promise Programs (Education Commission of the States): This 2022 response to an information request offers a concise primer on the key design elements of College Promise programs and how these components vary across different models.