The primary purpose of this study was to determine the likelihood that the type of financial assistance a student receives is a predictor of retention at a two-year college. The institution utilized in the study is a mid-size, public, two-year college in South Carolina. The effects of five distinct types of financial assistance on retention were investigated. The types of financial assistance include Federal Pell Grant, Legislative Incentive for Future Excellence (LIFE) Scholarship, South Carolina Education Lottery (SCEL) Tuition Assistance, a combination of South Carolina Education Lottery Tuition Assistance and Federal Pell Grant, and a combination of Legislative Incentive for Future Excellence Scholarship and Federal Pell Grant. The secondary purpose of this research study was to explore demographic factors that may also impact retention of the financial aid recipients. Retention was defined as completion of the certificate, diploma, or degree within 150% of the length of time required to complete the program of study, continued enrollment at the institution, or transfer to a four-year institution. Four categorical covariates were age, ethnicity, gender, and program of study.

Two secondary data sources were used in the study for the first-time, full-time freshmen in a Fall 2002 cohort. There were 300 participants in this study. Frequency distributions and percentages are provided on the dependent variable of retention, the independent variables of financial assistance, and the demographic variables. The forward stepwise (likelihood ratio) method of binary logistic regression was used to determine the probability of predicting retention with the independent variables. Once the significant predictors were identified, the backward stepwise (likelihood ratio) method was used to investigate the significance of age, ethnicity, gender, and/or program of study on types of financial assistance and retention. The .05 level of significance was used to test the six hypotheses in the study.

Findings from the study show that the majority, 89.02% (300), of first-time, full-time freshmen attending CCTC in the fall of 2002 received financial assistance. The highest percentage of students received the Federal Pell Grant. Most of the students were female, between the ages of 18 and 25, White/non-Hispanic, and enrolled in an associate degree program of study. Of the 300 participants, 38% (114) were retained.

The analysis of the data indicate four of the research hypotheses relating to financial assistance received through the Federal Pell Grant, South Carolina Education Lottery Tuition Assistance, SCEL Tuition Assistance and Federal Pell Grant, or LIFE Scholarship and Federal Pell Grant were not rejected. In addition, the research hypothesis on the demographic variables of age, ethnicity, gender, and program of study was not rejected. The research hypothesis on the financial variable of LIFE Scholarship as a predictor of retention at a two-year college was rejected. The conclusion is that a significant positive relationship exists between financial assistance through the LIFE Scholarship and retention for students at a two-year college.