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Performance-based scholarships (for 4-year college students)

Higher Education
Benefit-cost methods last updated December 2024.  Literature review updated December 2016.
Performance-based scholarship programs provide students with financial incentives to remain in college, often targeting low-income young adults. Scholarships are provided when students fulfill certain academic benchmarks such as maintaining a 2.0 GPA or enrolling in college. There are no initial academic requirements for the receipt of performance-based aid. Students usually receive their aid in monthly or quarterly installments over one or more terms.
 
ALL
BENEFIT-COST
META-ANALYSIS
CITATIONS
For an overview of WSIPP's Benefit-Cost Model, please see this guide. The estimates shown are present value, life cycle benefits and costs. All dollars are expressed in the base year chosen for this analysis (2023).  The chance the benefits exceed the costs are derived from a Monte Carlo risk analysis. The details on this, as well as the economic discount rates and other relevant parameters are described in our Technical Documentation.
Benefit-Cost Summary Statistics Per Participant
Benefits to:
Taxpayers $222 Benefits minus costs ($3,563)
Participants $947 Benefit to cost ratio ($0.04)
Others $530 Chance the program will produce
Indirect ($1,823) benefits greater than the costs 12%
Total benefits ($123)
Net program cost ($3,440)
Benefits minus cost ($3,563)

^WSIPP’s benefit-cost model does not monetize this outcome.

Meta-analysis is a statistical method to combine the results from separate studies on a program, policy, or topic to estimate its effect on an outcome. WSIPP systematically evaluates all credible evaluations we can locate on each topic. The outcomes measured are the program impacts measured in the research literature (for example, impacts on crime or educational attainment). Treatment N represents the total number of individuals or units in the treatment group across the included studies.

An effect size (ES) is a standard metric that summarizes the degree to which a program or policy affects a measured outcome. If the effect size is positive, the outcome increases. If the effect size is negative, the outcome decreases. See Estimating Program Effects Using Effect Sizes for additional information on how we estimate effect sizes.

The effect size may be adjusted from the unadjusted effect size estimated in the meta-analysis. Historically, WSIPP adjusted effect sizes to some programs based on the methodological characteristics of the study. For programs reviewed in 2024 or later, we do not make additional adjustments, and we use the unadjusted effect size whenever we run a benefit-cost analysis.

Research shows the magnitude of effects may change over time. For those effect sizes, we estimate outcome-based adjustments, which we apply between the first time ES is estimated and the second time ES is estimated. More details about these adjustments can be found in our Technical Documentation.

Meta-Analysis of Program Effects
Outcomes measured Treatment age No. of effect sizes Treatment N Effect sizes (ES) and standard errors (SE) used in the benefit-cost analysis Unadjusted effect size (random effects model)
First time ES is estimated Second time ES is estimated
ES SE Age ES SE Age ES p-value
Graduate with any degree^
Graduate with a degree from either a 2-year or 4-year higher education institution.
 18 1 536 0.109 0.075 23 n/a n/a n/a 0.109 0.143
Persistence into 2nd year
Completion of the first year and re-enrollment in the second year of higher education in a 2- or 4-year institution.
 18 1 536 -0.008 0.081 19 -0.008 0.081 19 -0.008 0.920
Persistence into 3rd year
Completion of the second year and enrollment into a third year of higher education in a 2- or 4-year institution.
 18 1 536 0.094 0.099 20 0.094 0.099 20 0.094 0.344
Persistence into 4th year
Completion of the third year and enrollment into a fourth year of higher education in a 2- or 4-year institution.
 18 1 536 -0.019 0.089 21 -0.019 0.089 21 -0.019 0.828
1In addition to the outcomes measured in the meta-analysis table, WSIPP measures benefits and costs estimated from other outcomes associated with those reported in the evaluation literature. For example, empirical research demonstrates that high school graduation leads to reduced crime. These associated measures provide a more complete picture of the detailed costs and benefits of the program.

2“Others” includes benefits to people other than taxpayers and participants. Depending on the program, it could include reductions in crime victimization, the economic benefits from a more educated workforce, and the benefits from employer-paid health insurance.

3“Indirect benefits” includes estimates of the net changes in the value of a statistical life and net changes in the deadweight costs of taxation.
Detailed Monetary Benefit Estimates Per Participant
Affected outcome: Resulting benefits:1 Benefits accrue to:
Taxpayers Participants Others2 Indirect3 Total
Persistence into 2nd year Labor market earnings associated with higher education $427 $1,006 $530 $0 $1,964
Costs of higher education ($206) ($59) $0 ($103) ($367)
Program cost Adjustment for deadweight cost of program $0 $0 $0 ($1,720) ($1,720)
Totals $222 $947 $530 ($1,823) ($123)
Click here to see populations selected
Detailed Annual Cost Estimates Per Participant
Annual cost Year dollars Summary
Program costs $1,414 2015 Present value of net program costs (in 2023 dollars) ($3,440)
Comparison costs $0 2015 Cost range (+ or -) 20%
Costs include scholarship payments, administrative costs of providing scholarships, and student support services. Source: Mayer et al. (2015). Evaluation and start-up costs are excluded. Performance-based scholarships are in addition to standard programming received by the comparison group. Performance-based scholarship programs duration varied, but on average, the program lasted one to two years.
The figures shown are estimates of the costs to implement programs in Washington. The comparison group costs reflect either no treatment or treatment as usual, depending on how effect sizes were calculated in the meta-analysis. The cost range reported above reflects potential variation or uncertainty in the cost estimate; more detail can be found in our Technical Documentation.
Benefits Minus Costs
Benefits by Perspective
Taxpayer Benefits by Source of Value
Benefits Minus Costs Over Time (Cumulative Discounted Dollars)
The graph above illustrates the estimated cumulative net benefits per-participant for the first fifty years beyond the initial investment in the program. We present these cash flows in discounted dollars. If the dollars are negative (bars below $0 line), the cumulative benefits do not outweigh the cost of the program up to that point in time. The program breaks even when the dollars reach $0. At this point, the total benefits to participants, taxpayers, and others, are equal to the cost of the program. If the dollars are above $0, the benefits of the program exceed the initial investment.

Citations Used in the Meta-Analysis

Mayer, A.K., Patel, R., Rudd, T., & Ratledge, A. (2015). Designing scholarships to improve college success: Final report on the Performance-Based Scholarship Demonstration. New York, NY: Manpower Demonstration Research Corporation.