Financial Aid Matters: The Relationship Among Financial Aid, Retention, and Graduation Rates in Online Students

A wealth of evidence indicates that financial aid is positively associated with retention and graduation rates among college students attending in-person courses. However, limited research exists on the relation between financial aid, retention and graduation rates among undergraduate students earning online degrees. The purpose of this study was to examine these relationships among five cohorts of students (AY2014-2018; ns = 305 - 495) seeking online degrees. Using multinomial logistic regression models, the results indicated students who received more total financial aid had a higher probability of graduating and a lower probability of stopping out, with some variations by cohort. The enrollment status (part-time vs full-time) was a significant predictor of stopping out and graduating. These results suggest that both full-time and part-time students benefit from higher total financial aid. Further, this study demonstrated that these benefits may be especially important for part-time students.