In an evaluation of the impact of different student success programs, the MDRC found that linking financial aid with students' future academic performance can, in fact, improve student performance.
According to a report summarizing the evaluation of two Louisiana community colleges:
The Louisiana program offered students up to $1,000 for each of two semesters for a total of $2,000. The scholarship was paid in three increments throughout the semester if students enrolled at least half time and maintained a “C” (2.0) or better grade point average (GPA). Program counselors monitored academic performance and disbursed the scholarship checks directly to students. Notably, the scholarships were paid in addition to federal Pell Grants and other financial aid. Because the program was funded with state welfare funds, eligibility was limited to low-income parents (though they did not need to be on welfare). The research sample was mostly African-American single mothers. Students in the study's control (or comparison) group in Louisiana could not receive the Opening Doors scholarship, but they had access to standard financial aid and the colleges' standard counseling.
The evaluation found that tying financial aid to academic performance can generate large positive effects — some of the largest MDRC has found in its higher education studies. The program substantially improved students' academic outcomes, and the positive effects continued through the third and fourth semesters of the study, when most students were no longer eligible for the scholarship. Students in the study's program group were more likely to attend college full time. They also earned better grades and more credits." (pages 2–3)
The report also includes summaries of other evaluations of programs that are designed to improve student success including learning communities and creating target support programs for students who are on academic probation. See http://www.mdrc.org/sites/default/files/policybrief_27.pdf to read the full report.