Race, Ethnicity, and the Design of State Grant Aid Programs

Most states use need-based state grant programs to reduce financial barriers to college for students from low-income households. The policy design and eligibility requirements of these grant programs vary from state to state and even across sectors. But some policies may disproportionately exclude Black, Hispanic, and Asian students.In this fact sheet, we analyze data on students who attend college in their state of legal residence and examine how the characteristics of need-based state grant programs affect students from different racial and ethnic groups. We focus on 11 states with significant need-based grant programs and examine both program structure and the distribution of aid among students from different racial and ethnic groups. We find that some of the eligibility restrictions for state grants, including those based on time part-time enrollment, time since high school graduation, and high school academic record, may have differential impacts by race and ethnicity.