GLOBAL ISSUES REPORT

Global Issues Report:

Student Persistence and Financial Aid

Johnny Guerrero

University of Texas at El Paso

RWS 1301

Dr. Vierra

April 5, 2019
GLOBAL ISSUES REPORT

Abstract

This report is meant to show how globally students financial aid and their retention rates

are related and some other factors that also influence students in terms of money and how the

University of Texas at El Paso can help fix the problem within their school.
GLOBAL ISSUES REPORT

Global Issues Report:

Student Persistence and Financial Aid

While schools change in different cities, states, countries, etc. they all are different today

then in the past because of advances in knowledge and technology but, students are still facing

problems that students over the years had. Among them are two main ones being financial aid

and its relationship with student’s academic persistence in the short and long term. There is a

relation in financial aid and students’ academic persistence. [What is your thesis? C7]

Discussion

Student persistence is a global issue that is improving with time. OECD (2018) shows a

graph that has twenty-nine countries for the graduation rates and none of them had hundred

percent graduation rate therefore showing that the problem isn’t just in the United States. Also,

in terms of persistence, Chile ranked to lowest with less than ten percent graduation rates with

the US currently is fourteen out of the twenty-nine but still below ten percent in terms of

graduation completion for first year students after a bachelor’s degree (p. 210). With, it is safe to

assume that college student graduation is an international problem. When looking at the graph

from the U.S. Department of Education, National Center for Education Statistics, Integrated

Postsecondary Education Data System (IPEDS), (Figure 3), it is show that in the ten-year span

between the years of 2007 to 2017, the retention levels have gone up gradually from 71.1 to 75.4.

Showing that retention rates are going up gradually over the years. Therefore, students while

faced with the problem of persistence, are slowly improving in the retention rates.

Student persistence and effects of student financial aid depend on length of time. John

(1991) made that claim that a student is negatively impacted by loans more during the first two
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years while when students who use the full four years, are impacted positively (p. 23). Which

helps in showing that students who go for the aid that covers more than one year typical have a

higher retention rate than the ones who only apply for one year. While looking at data from the

OECD in 2018 (see figure 1), in the different countries it shows how the different countries

although different in the rates, they all show that the students who go for the doctorate and

master’s degrees have a high retention rate than the students who just went for the bachelor’s

degree by a significant amount that is clearly shown in the countries with the higher retention

rates while those with lower rates also being able to show the difference. Therefore, the students

who stay in school longer tend too stay in the college and finish the year/ degree.

Students’ views on student loans and financial aid have changed. Financial Aid and

student loans influence student persistence depending on the length of time. John (1991) made

that claim that a student is negatively impacted by loans more during the first two years while

when students who use the full four years, are impacted positively (p. 23). He also noted that

between the years 1970- 1980, students view of loans had changed while in 1970, students had

negative impacts from student loans while in 1980, students were positively impacted, also

something to note, he noticed that low-income students in the 1990’s were more responsive to

financial aid and not to student loans. (p. 24). Therefore, when regarding financial aid and

student loans, it is important to also take into consideration the other exterior factors and length

of time that the student will be receiving student aid to determine the influence that the students

will have regarding persistence.

Financial aid isn’t the top reason for student persistence. Perna (1998) claimed that

financial aid has a positive and negative affect on students’ persistence. The author does note that

from previous research; there are studies that show no correlation between but, there are also
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some other factors that are to be considered such as working status (p. 26). Also, a sub example

was used in 1972 using student with similar backgrounds, pre- college academic factors, etc. to

control the experiment more and it was concluded that financial aid was the third in direct effect

and fifth for total effects (p. 27). After this, there is proof that financial aid and student loans

does influence students regarding persistence. According to authors, Saul Schwartz and Sandy

Baum, there is another factor affecting student’s persistence rate where there are students who

are taking on jobs and school and are trying to balance them both, but it decreases the student’s

academic performance because it takes time away from studying and other activities that would

normally help the student to keep up with classes (p. 67-68). Another example is that the teachers

and teacher assistants can have an incentive to help the students out more by giving the teachers

a pay incentive that would be where the teacher gets paid for the student’s success in the class

(p.70-73). The teacher pay incentive would be very helpful because it would help the students to

be recognized by the teacher paid more attention to. Therefore, incentives would be a good tool

for student success because it would be rewarding either the teacher or the student which in turn

would be an increase in effort which in the end will be a rise in persistence.

Students are more responsive to financial aid and not student loans. When looking at the

year 2011 for students’ graduation rates for students with and without Financial Aid at UTEP,

(figures 3,4 & 5), the data shows that students who did not receive any Financial aid in grants or

loans, had the highest percent in graduation rates then it was students with grants who had the

second-best rate of graduation then students with loans being the lowest. This is important to

look at because it is the most controlled situation with the university being the same and the year

the same as well. Also it shows how when it comes to persistence for the students, those who are

paying out of pocket are more persistent in school than those with aid more likely because they
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are paying and they are able to see the money being spent whereas those with aid are able to be

in school but aren’t seeing the cost so there isn’t as much pressure to finish or to keep grades up

because they might feel like they are still in high school where school is paid for and they might

bring their bad habits with them which will cause them not to do as well as someone who is

paying out of pocket.

Students will do the minimum to meet requirements. Financial incentives have the

potential to be useful when used correctly to help students persist and stay motivated in school.

According to Schwartz and Baum (2015), they talk about how to use financial incentives to help

the students stay motivated. While there are cases where the incentives work well, studies have

shown that students will do the minimum required to keep the maintain their status with whoever

oversees the incentives (p. 66). Therefore, though it’s not necessary a big form of financial aid,

this information is useful when looking into the types of financial aids because it shows the

potential but also shows the negative ends. Also, this can be combatted by faculty implementing

goals or incentives such as in the book “Decision making for Student success”, the authors, Saul

Schwartz and Sandy Baum, make the claim that students will perform better when set with tasks

that are not too difficult but are still complex enough to require thinking and that the students

also should have a goal and that they must keep up with it through feedback which would build

commitment (p. 21-25). UTEP can use this process when advising students that way the students

are working towards the goal and have that in mind and won’t fall behind and for those at-risk

students they can have meeting with their advisors and can receive feedback and keep track of

their progress. As a result, there will be an increase in grades and the performance of students

because they won’t be doing the bare minimum to pass but rather be reaching for their individual

goals.
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Conclusion

In conclusion, financial aid and how it has a relation student persistence is a global issue

with evidence being shown that it isn’t just one universities problem or even country but that it is

a problem with students across the globe. Although over time students are improving their

retention rates there are ways for UTEP to improve the student’s success by offering the students

more incentives for their grades and seeing to bridge the financial gap for students that need to

work and can’t fully commit to school.

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References

Alon, S. (2011). Who benefits most from financial aid? the heterogeneous effect of need-based

grants on students' college persistence*. Social Science Quarterly, 92(3), 807-829.

doi:10.1111/j.1540-6237.2011.00793.x

Castleman, B. L., Schwartz, S., & Baum, S. (2015). Decision making for student success:

Behavioral insights to improve college access and persistence. New York, NY ; Abingdon,

Oxon: Routledge. Retrieved from http://0-

ebookcentral.proquest.com.lib.utep.edu/lib/utep/detail.action?docID=1987324

National Center for Education Statistics. (2018). Full-time retention rate in postsecondary

institutions. Retrieved from https://nces.ed.gov/ipeds/TrendGenerator/app/answer/7/32

OECD. (2018). Education at a glance 2018 doi:https://doi.org/https://doi.org/10.1787/eag-2018-

en

University of Texas at El Paso. (2018). University of texas at el paso persistence and graduation

rates for first-time, full-time degree-seeking undergraduate students University of Texas at

El Paso.
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Figures

Figure 1. A graph of the first-time international graduates in 2016. Copyright OECD

2018 https://doi.org/https://doi.org/10.1787/eag-2018-en

Figure 2. Full time student retention rates from 2007- 2017. U.S. Department of

Education, National Center for Education Statistics, Integrated Postsecondary Education Data

System (IPEDS), Fall Enrollment component final data (2007 - 2016) and provisional data
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(2017).

Figure 3. UTEP Retention rates for Pell Grant Students from Fall 2007- Fall 2017.

University of Texas at El Paso Persistence and Graduation Rates for First-Time, Full-Time

Degree-Seeking Undergraduate Students. https://www.utep.edu/student-

affairs/financialaid/consumer-information/Retention-Rates.pdf
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Figure 4. UTEP Retention rates for Students without Financial Aid from Fall 2007- Fall

2017. University of Texas at El Paso Persistence and Graduation Rates for First-Time, Full-Time

Degree-Seeking Undergraduate Students. https://www.utep.edu/student-

affairs/financialaid/consumer-information/Retention-Rates.pdf

Figure 5. UTEP Retention rates for Students with Subsidized Loans from Fall 2007- Fall

2017. University of Texas at El Paso Persistence and Graduation Rates for First-Time, Full-Time
GLOBAL ISSUES REPORT

Degree-Seeking Undergraduate Students. https://www.utep.edu/student-

affairs/financialaid/consumer-information/Retention-Rates.pdf