Higher Ed Emergency Aid Boosts Student Success

By Bob Collins, Vice President, Financial Aid, and Patti Kohler, Vice President, Financial Aid

Emergency aid for students is a powerful student support tool. Whether they cover unexpected medical expenses, address sudden job loss or ease family burdens, these just-in-time interventions have proven instrumental in keeping students on track. Anecdotally, we know that financial aid delivered at the right time can keep students from dropping out, but recent research, led by Western Governors University, sheds light on the tangible impact emergency aid has on student success, reinforcing its vital role in higher education.

We conducted the study in partnership with the WGU Advanced Analytics team and WGU Labs, the university’s innovation arm, to analyze the impact of Higher Education Emergency Relief Funds (HEERF II and III) disbursements. The U.S. Department of Education made $77 billion of HEERF funds available to higher education institutions as a part of pandemic-driven legislation, aimed to swiftly aid students and institutions grappling with financial instability. As part of the bill, colleges and universities were required to allocate half or more of the funding to emergency financial assistance for students experiencing significant financial hardship.

As an online university, WGU distributed 100% of its HEERF allocation directly to students. This federal funding provided us the opportunity to support students facing tremendous challenges and observe how direct funds can help students who are struggling financially stay on track to graduation. Between June 2020 and the winter of 2022, we distributed HEERF II and III financial aid awards ranging from $500 to $2,400 per eligible student, for a total of $59M distributed across the university.

Studying the final round of funding allocations revealed encouraging results, including improvements in student success metrics, especially given the relatively small amount provided to students. The findings underscored the potential for emergency aid to foster positive outcomes and drive a shift in financial aid approaches.

Bolstering Graduation Rates

One of the most exciting findings from our research was that, in the third wave of funding (HEERF III), students who received aid experienced graduation rates 11% higher than those who didn’t meet the eligibility requirements. This result fundamentally shows the promise of emergency aid and supporting student financial wellness.

Across all HEERF III recipients, many were experiencing significant financial constraints because of the pandemic, with 30% of recipients reporting a household income of less than $35,000 — the poverty line for a family of five. We surveyed the 3,000+ aid recipients about their financial stress. Around half of students who responded reported having difficulty paying for food (55%), housing (54%), utilities (50%), or credit card bills (48%) during the pandemic. These kinds of financial uncertainties can disrupt student focus and progress.

Considering WGU’s student demographic comprises primarily working adults who are providing for themselves and often responsible for the well-being of others, minimizing financial stress is very important. While we did not see the same uptick in graduation rates during other rounds of HEERF aid, the impact of this third round of funding does highlight emergency aid’s potential to bolster student success.

Streamlined Aid Delivery

Based on existing research, we knew that labeling a cash transfer — for example, “education support” or “winter fuel payment” — could influence how funding is used. But would other aid strategies influence use or outcomes?

During the HEERF distributions, a steering committee led by the Office of Financial Aid solicited input from the university’s colleges and departments regarding different distribution models. From that process, we established 10 distribution models that defined aid eligibility. Each model prioritized students with demonstrated financial need based on household income or expected family contribution as reported on the FAFSA, but also targeted students at specific stages of their academic career (just beginning or nearing graduation), engaged in clinical experiences, or nearing the end of Pell eligibility. In addition, we then explored whether the following things could improve or dampen the aid’s effects: 1) access to a website (the Resource Hub) with curated information suggesting where students could find free resources or purchase supports that could assist them in their learning, such as tutoring support, childcare, or technology resources; or 2) providing aid in three monthly installments rather than a lump sum.

We found no evidence that these different funding models affected students’ outcomes or how students used the aid. This finding demonstrates that expediting aid delivery, removing unnecessary barriers, and empowering students to allocate funds according to their immediate needs may be the most effective strategy.

Modernizing Financial Aid

The study highlights many of the opportunities that exist to modernize higher education’s approach to financial aid and the initial steps to enact change. Today there are many barriers for students to access emergency aid, including having to apply or explicitly demonstrate need, lengthy wait times to receive funding, and federal limits on total financial aid packages.

Adopting innovative approaches can provide much-needed help for students, particularly those who are close to graduation and simply need a little extra support to reach their goals. Some requirements are still necessary, of course, but making changes including better-balancing awards of financial aid and scholarships, reducing barriers to aid, and education about financial wellness resources could drive meaningful progress.

Taking these approaches is necessary for those of us in higher education to avoid being in the business of simply enrolling students and more fully invest in the business of graduating students. If more funding that followed these practices was available to students, it could help more students succeed, reach their goals, and benefit from the promise of education. We certainly hope higher education keeps moving in this direction.

To learn more about our analysis of the impact of HEERF III aid, read the full report.