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Aid and Innovation: How Federal Financial Aid Policy Impacts Student Success and How States Can Respond

Katrina Reichert

From Washington to Connecticut, Arkansas to Indiana, state policymakers and community college leaders are focused on building completion pathways to ensure that more students succeed in postsecondary education and make smooth transitions to careers. Financial aid is both an effective and a necessary policy lever to promote this goal. Not only do many students need financial aid to walk through the college door, but they also need it to stay enrolled consistently through the completion of a certificate, degree, or successful transfer to a four-year institution. 

This report describes how policy leaders and financial aid experts from a number of states are tackling a vexing problem: how financial aid rules and regulations stymie some of the most promising institutional and statewide innovations for serving low-income students who are underprepared for postsecondary education. These leaders, who represent the Achieving the Dream, Developmental Education Initiative, and Completion by Design state policy networks led by Jobs for the Future, are implementing innovative solutions that accelerate student progress toward postsecondary credentials. In doing so, they are encountering challenges posed by federal financial aid policies at multiple points along the pipeline to and through college, and they are actively seeking and experimenting with strategies to overcome those challenges.