Traditional Financial Aid Packages May Be Less Helpful for Older, Working Adults

Although college enrollment increased significantly over the last few decades, fewer than half of all adults have earned a postsecondary degree. Financial aid is one of the most widely studied policy tools that has been shown to increase degree completion, but rarely have studies focused on whether aid helps older, “nontraditional” students return to school and improve their job prospects.

Oded Gurantz (University of Missouri) examined a California aid program focused on low-income, working adults in their late 20s to early 30s. Unlike prior studies that typically focused on just one or two colleges, Gurantz’s study tracked hundreds of thousands of individuals interested in a variety of postsecondary options across the state.

The results? The evidence showed that grant receipt has no impact on whether older, “nontraditional” students return to school, earn a degree, or have higher earnings up to eight years later. Gurantz was able to show the grant has no impact by comparing students who were just eligible for the program against those who just missed the cutoff.

The program likely did not change student outcomes for two reasons. First, the program used a complex and opaque eligibility formula that only provides guidance on aid receipt significantly after the application process. This is problematic because a hallmark of successful aid programs is transparency and early outreach. Second, typical aid packages, like those that help recent high school graduates, may simply be insufficiently generous to help adult students. Having significant commitments to work and family might limit their ability to invest the necessary effort in their education.

According to Gurantz, “This paper highlights challenges in effectively helping working adults further their education and improve their economics prospects. As prior research has generally found large, positive impacts when high school and college students receive time-intensive counseling services, we are currently conducting a randomized control trial that provides recent college dropouts—exactly the population studied in this paper—an opportunity to work one-on-one with counselors who are supporting their return to college, and are excited to share those results when they become available.”

Read the study in the Journal of Human Resources: “Impacts of State Aid for Nontraditional Students on Educational and Labor Market Outcomes,” by Oded Gurantz.

Oded Gurantz (@odedgurantz) is at the Truman School of Public Affairs, University of Missouri.

The author acknowledges the Smith-Richardson Foundation and grant #R305B090016 from the U.S. Department of Education, Institute of Education Sciences, for financial support.