Becoming HOPEless in the 2-Year Sector

Becoming HOPEless in the 2-year sector addresses the question: what happens when a state-wide policy removes merit-based financial aid from low-income students making satisfactory academic progress? To assess the magnitude of this HOPEless effect, we compared credits attempted, attained, and persistence and graduation indicators of HOPEless students against the outcomes of their not targeted/affected peers. Relying on multiple quasi-experimental analytic techniques (difference in differences [DD], DD in differences, Fuzzy regression discontinuity, and multi-treatment propensity score weighting), two mutually exclusive analytic samples (one longitudinal and one cross-sectional), and over one million observations across four academic years (2009–2010 to 2012–2013), we consistently found that HOPEless students realized worse outcomes and even persisted fewer terms/semesters than students on academic probation. The State saved about $150 million in lottery money (largely funded by lower-income households) but did so at the expense of 665,192 credit hours that would have been attained by HOPEless (low-income) students.