Financial support differentially aids retention of students from households with lower incomes: a UK case study

Around the world each year, large sums of money are expended in helping students access higher education institutions (HEIs), but there is remarkably little evidence to show whether this investment is effective or not. Here we use data from a UK university to investigate the relationship between financial support and the continuation of students beyond their first year of study. As a result of changing scholarship policies over the course of three years, a natural experiment was created that allowed us to investigate the effect of financial support on the rates of withdrawal of students from households with different incomes. Controlling for multiple demographic and attainment factors (age, gender, ethnic grouping, disability, nationality, household income, prior educational attainment, and local Higher Education participation rates), the data suggest that scholarships improved student retention, but principally for those students from households with low and intermediate incomes. Interestingly, the value of the scholarships, which varied from £500 to £3,000, did not have a measurable effect on withdrawal. We also found that some students who appeared to be eligible for a scholarship and would likely have benefited from it did not receive one, and we discuss the reasons why this might be so. These results have important implications for scholarship policies in Higher Education internationally; to maximise impact, scholarships should be awarded to those most in financial need.