Dollars to Degrees: How Pell Grant Aid Impacts Community College Student Outcomes

Objective: This paper provides evidence on the efficacy and effectiveness of federal and state financial aid programs in supporting community college students. Method: I use a regression discontinuity design that takes advantage of discontinuities in the Pell Grant formula known as Automatic-Zero Estimated Family Contribution to estimate the effects of Pell Grant aid on community college student enrollment and financial and academic outcomes. Results: The study findings show that increases in grant aid boost associate degree completion, but these increases do not translate into significantly higher bachelor’s degree completion rates or lower student debt burdens. These results fall in line with most of the empirical literature on Pell Grant aid effectiveness finding only modest effects of marginal increases in financial aid on degree completion. Contribution: Findings further highlight the potential importance of combining efforts to improve financial aid programs and the transfer experience for degree-seeking, transfer-intending community college students.