Institutional Research and Planning Room 306 1871 Old Main Drive Shippensburg, PA 17257 Phone: (717)-477-1154 Fax: (717)-477-4077 irp@ship.edu

Impact of Scholarships on Retention and Performance This study assessed the effect of scholarship awards on new students' grade performance and retention behavior. Prior research has generally shown that scholarships are more beneficial in recruiting students than in retaining them. The participants for this study were all students who enrolled at Shippensburg University in the 1993, 1994, 1995, and 1996 Fall semesters. Variables in the study included total aid and total merit scholarship packages, financial aid, grade point averages, and enrollment patterns in subsequent years. Demographics included student ability indicators, sex, ethnicity, admission category, and financial aid category. The results showed that students who received financial aid were similar to the total student population but students who received merit scholarships are very different showing higher ability measures, being more likely female and more likely minority. In turn, they showed significantly higher GPAs and significantly higher retention. Retention was mostly affected by the student's ability level and freshman year grade point average. Financial aid and scholarship did not predict retention to any significant degree. It was found that the freshman year is critical to retention in later years; beyond the necessary successful academic performance, the amount of both financial aid and amount of scholarships in the freshman year had some influence on retention into the fourth year. It is evident from this study that considerable selection occurs in the awarding of merit scholarships. Observed increases in retention and GPA were most likely due to this awarding pre-selection and were not likely due the actual scholarship award. While the exact impact of scholarships on academic performance or retention cannot be determined, there is some indication that financial aid can help keep students at Shippensburg University. Scholarship and grant aid can be most useful when given early in the prospective student's decision process and in amounts that compete with the total cost packages at other universities also in the student's consideration. This study suggests that continued aid might be important to students who originally received aid upon enrolling. Four-year packaging of competitive scholarships and grants may be the best strategy in addressing both the quality and retention of new students.