Evidence-based Practice: Financial incentives for students

Definition

Performance-based incentives are monetary awards disbursed to students based on meeting specific academic benchmarks, and are intended to supplement (not replace) students’ financial aid packages. By identifying and incentivizing short-term goals (such as maintaining a minimum level of enrollment, successfully completing coursework, or participating in advising programs), these initiatives support students’ progression through college.1 Incentive programs can vary in the amount of the incentive, the requirements for receiving it, and the number of semesters for which students are eligible for it. In the studies reviewed, incentive amounts ranged from about $600 to $1,500 per semester, and students typically were eligible for two or three semesters. For example, in the Louisiana Opening Doors program, students who were parents with low incomes received $1,000 per semester for two semesters for maintaining at least half-time enrollment and a 2.0 GPA.2 The ASAP program  offers financial assistance with textbooks, a tuition waiver that covers the difference between a student’s tuition and fees and the financial aid package, and a monthly transportation pass.3 To be eligible for these supports, students have to enroll in at least 12 credits per term; a 3.0 GPA or higher is required to be eligible for funds covering winter or summer coursework. Although performance-based awards may reduce the amount of student loans or grants awarded in some instances, they usually result in a net financial gain for students.4