| Path analysis was conducted to examine the influence of financial aid, in the context of student background characteristics and college experiences, on freshman-to-sophomore year retention. Specifically, a theoretical model of freshman-to-sophomore year retention was developed and tested that included the following variables: external encouragement, ACT Composite score, financial need, the amount of work study received, the amount of loan money received, the amount of need-based gift aid received, the amount of merit-based gift aid received, students' satisfaction with their financial aid, academic integration, social integration, university GPA, perceived gains, institutional commitment, students' satisfaction with their collegiate experiences, and intent to persist.;Overall, the variables in the hypothesized, theoretical model accounted for 30% of the variance in freshman-to-sophomore year retention. Further support for the hypothesized relationships in the theoretical model was shown by the nonsignificant chi-square goodness-of-fit statistic (X2 = 39.79, df = 32, p = .16). Direct, indirect, and total effects were examined for each structural equation in the model.;Results revealed that the effects of financial aid on freshman-to-sophomore year retention were intricately interwoven into the multifaceted aspects of the university. Merit-based gift aid was the only financial aid variable to have a statistically significant, positive, total effect on retention. Merit-based gift aid also had statistically significant, positive effects on satisfaction with financial aid, academic integration, university GPA, and intent to persist. However, students who received more merit-based gift aid were less likely to be socially integrated and were less satisfied with their collegiate experiences, two strong predictors of college student attrition.;Larger amounts of need-based gift aid were associated with greater satisfaction with financial aid which, in turn, was associated with greater academic integration, perceived gains, and satisfaction with collegiate experiences. In contrast, larger amounts of loan money were associated with lower academic achievement. Thus, the results of this study underscore the interactive process of freshman-to-sophomore year retention in which financial aid variables are but one aspect of a complex social and academic system. |
