Increasing postsecondary academic success is a national imperative. While access to college has increased markedly since the passage of the Higher Education Act of 1965, more work must be done to boost rates of college completion. College graduation rates have not improved in the last 40 years despite the ever-growing number of students matriculating, causing the United States to lose ground internationally in the proportion of adults with college degrees. President Obama has focused new attention on this challenge with his recent announcement of the $12-billion American Graduation Initiative and his call for the United States to regain the highest college graduation rate in the world by 2020.

Low-income students are most at risk of not persisting to complete a certificate or degree - often because of financial pressures and inadequate academic preparation for college. One promising solution for improving academic success among low-income students is a performance-based scholarship. Paid contingent on attaining academic benchmarks, a performance-based scholarship can provide both financial assistance and act as an incentive to earn a postsecondary degree.

While studies have examined the relationship between financial aid and college access, few have evaluated the relationship between financial aid and academic success. Factors that are associated with financial need, such as being low income, are also associated with a lack of academic success, making it difficult to isolate the effect of additional financial aid on student achievement.

MDRC’s Opening Doors study of performance-based scholarships in Louisiana is one of a handful of studies that was able to measure the effect of additional aid on academic success. As part of the study, two colleges implemented a performance-based scholarship program for low-income parents, providing students with scholarships of up to $1,000 for each of two semesters (up to $2,000 per student in total), paid in increments based on each student’s success in meeting key benchmarks. An evaluation of the intervention showed that the scholarship had a number of positive effects for students.

Building on the promising findings from the Louisiana study, MDRC launched the Performance-Based Scholarship (PBS) Demonstration in four states in 2008. The goal of the PBS Demonstration is to evaluate whether performance-based scholarships are an effective way to improve persistence among low-income college students in different geographical locations with different amounts of monies over different durations. This brief provides an introduction to the PBS project and describes the program designs of the sites currently participating in the demonstration.