What is it? Financial support includes grants, bursaries, scholarships and fee-waivers. When offered to prospective students, financial support is designed to help overcome the perceived or actual cost of applying and/or going to higher education (HE).
Evidence? There is a small but high-quality body of evidence that finds financial support can have a positive, albeit small, impact on HE participation. Some evidence also suggests it can encourage students to apply to courses with higher entry requirements or that are further from home. However, much of the existing research comes from the USA. More evidence is needed on the impact of financial support in a UK context, and particularly on support offered by individual HE providers as opposed to maintenance grants.
Should HE providers offer financial support to widen participation? Overall, the international evidence base suggests that providers should include financial support as part of their approach to boosting participation among students from low-income backgrounds. Most of the evidence relates to grants/bursaries/scholarships rather than fee-waivers. Financial support is likely to be most effective where:
- It is combined with a proactive campaign to help prospective students understand and access what is available to them.
- It is part of a broader programme of engagement with students – for more information, see multi-intervention outreach.
- It is need-based (i.e. based on financial background) rather than merit-based (i.e. based on prior attainment).
What is this intervention?
Financial support offered to prospective students aims to reduce the perceived and actual financial barriers to applying and attending HE. The advice on this page relates to:
- Grants/bursaries/scholarships – non-repayable monetary support.
- Fee-waivers – a reduction in HE course costs.
The aim of this support is to reduce the actual and/or perceived cost of HE.
This page focuses on support which is offered, or promoted to, students before they enter HE. Financial support can also be made available to students after they enter HE – for more information, see financial support (post-entry).
Financial support also sometimes forms part of broader programmes of engagement with students – for more information, see multi-intervention outreach.
What is the target group?
The advice on this page draws on evidence about financial support for prospective HE students from low-income backgrounds.
In the case of scholarships, this kind of financial support is sometimes provided for high-achieving students who meet certain academic eligibility criteria (so called ‘merit-based’ support).
How effective is it?
Financial support seems to have a positive, albeit in some cases small, effect on HE participation. A study of changes to student finance in the UK found that an increase in maintenance grants of £1,000 per year resulted in an increase in participation of around 3.95 percentage points (Dearden et al. 2014) and a similar impact has been observed in other countries including the USA (Bettinger, 2015; Hoxby 2013; Page et al, 2018), France (Fack & Grenet, 2015) and to a lesser extent in Denmark (Nielson et al., 2010). For effects of financial support on outcomes on-course, see financial support (post-entry).
Some evaluations have found grants/bursaries and scholarships encouraged students to apply to courses with higher entry requirements (Hoxby & Turner, 2013; Page et al., 2018) or to universities/colleges that are further from their home (Vergoli & Zanini, 2015), but again this has not been tested in the UK.
What features seem to be important?
It is important to raise awareness of financial support among potential beneficiaries, but several studies have shown that information alone is not likely to influence student behaviour (French & Oreopoulos, 2017). Instead, students need help to proactively navigate the available support (Moore et al., 2013; Scott-Clayton; 2015). Financial support might best be coupled with other forms of engagement from HE providers – for more information, see multi-intervention outreach.
Evidence also suggests the use of solely merit-based support programmes (i.e. support for students who meet certain academic eligibility criteria) can have a negative impact on students from low-income backgrounds. This is possibly because students with high attainment are typically from more advantaged backgrounds (Herbaut & Geven, 2019; Younger et al. 2018). Therefore, this kind of support needs to be targeted at students from low-income backgrounds with requisite levels of attainment to be effective.
What don’t we know
Currently we do not enough evidence to make claims about which forms of financial support (bursaries/grants/fee-waivers/scholarships) are most effective.
Much of the existing research has taken place in the USA. As student finance arrangements differ from country to country, we cannot make conclusive statements about how some forms of financial support might apply in a UK context. We are lacking causal studies on the impact of financial support offered by HE providers in the UK.
Much research measures the impact on individuals who received the support because their household income was just above the eligibility threshold, versus those who didn’t receive the support because they were just below. There is currently no causal research on the importance of financial support for students from very low-income backgrounds who sit far from this margin. These students are likely to have a greater need for financial support than those who only just meet the threshold and so the impact on these individuals could be bigger than the existing research suggests.
There is only one study that compares the impact of financial support with other approaches. The study finds that the impact of combined outreach and financial support is large compared to either of these approaches in isolation (Herbaut & Greven, 2019). More evidence on the relative scale of the impact of financial support versus other approaches would help HE providers understand how best to structure their overall outreach offering.
Where does the evidence come from?
TASO’s advice on the efficacy of financial support in widening participation is based on evidence from seven causal research studies and five literature reviews. All the studies used experimental or quasi-experimental techniques to assess the impact of various forms of financial support and most of this research took place in the USA.
We have focused on evidence produced in the last 10 years and, in the case of UK-based evidence, since the student finance reforms were introduced in 2012.
The key references are given below.
Causal studies on the impact of financial support:
Bettinger, E. (2015). Need-Based Aid and College Persistence. Educational Evaluation And Policy Analysis, 37(1_suppl), 102S-119S. https://doi.org/10.3102/0162373715576072
Dearden, L., Fitzsimons, E., & Wyness, G. (2014). Money for nothing: Estimating the impact of student aid on participation in higher education. Economics of Education Review, 43, 66-78. https://doi.org/10.1016/j.econedurev.2014.09.005
Fack, G., & Grenet, J. (2015). Improving College Access and Success for Low-Income Students: Evidence from a Large Need-Based Grant Program. American Economic Journal: Applied Economics, 7(2), 1-34. https://doi.org/10.1257/app.20130423
Hoxby, C., & Turner, S. (2013). Expanding college opportunities for high-achieving, low income students. Stanford Institute for Economic Policy Research Discussion Paper, 12, 014.
Nielsen, H., Sørensen, T., & Taber, C. (2010). Estimating the Effect of Student Aid on College Enrollment: Evidence from a Government Grant Policy Reform. American Economic Journal: Economic Policy, 2(2), 185-215. https://doi.org/10.1257/pol.2.2.185
Page, L., Kehoe, S., Castleman, B., & Sahadewo, G. (2017). More than Dollars for Scholars. Journal Of Human Resources, 54(3), 683-725. https://doi.org/10.3368/jhr.54.3.0516.7935r1
Vergolini, L., & Zanini, N. (2015). Away, but not too far from home. The effects of financial aid on university enrolment decisions. Economics Of Education Review, 49, 91-109. https://doi.org/10.1016/j.econedurev.2015.08.003
French, R., & Oreopoulos, P. (2017). Behavioral barriers transitioning to college. Labour Economics, 47, 48-63. https://doi.org/10.1016/j.labeco.2017.05.005
Herbaut, E., & Geven, K. (2020). What works to reduce inequalities in higher education? A systematic review of the (quasi-)experimental literature on outreach and financial aid. Research In Social Stratification And Mobility, 65, 100442. https://doi.org/10.1016/j.rssm.2019.100442
Moore, J., Sanders, J., & Higham, L. (2013). Literature review of research into widening participation to higher education. Report to HEFCE and OFFA. AimHigher Research & Consultancy Network.
Scott-Clayton, J. (2015). The role of financial aid in promoting college access and success: Research evidence and proposals for reform. Journal of Student Financial Aid, 45(3), 3. Retrieved from https://ir.library.louisville.edu/jsfa/vol45/iss3/3
Younger, K., Gascoine, L., Menzies, V., & Torgerson, C. (2018). A systematic review of evidence on the effectiveness of interventions and strategies for widening participation in higher education. Journal Of Further And Higher Education, 43(6), 742-773. https://doi.org/10.1080/0309877x.2017.1404558