School of Business hardship fund supports struggling students during financial crisis
Author: Crista Tappan, The School of Business
Posted: May 6, 2019

In 2015, The School of Business launched the first hardship fund at Portland State University, designed to offer financial aid to traditionally underrepresented student populations. More than $730,000 has been awarded to 290 students since the program started. 88% of student recipients have been retained or graduated. The funds often cover tuition costs, but also can be used to cover textbook costs, childcare, health care and other living expenses.

Underrepresented student populations are often racial or ethnic minorities, have disabilities, those of low socioeconomic status, and LGBTQ+-identifying students. According to the Consortium for Student Retention Data Exchange, there are significantly lower retention rates for traditionally underrepresented students, thus inspiring hardship fund founders Erica Wagner, associate dean of undergraduate programs, and Becky Sanchez, executive director of undergraduate programs, to create this innovative program.

Hardship fund recipient Sharona Shnayder

Studies show that many poor and working-class students pay for college with little-to-no assistance. Research by St. John and Starkley (1995) found that for every $1,000 increase in tuition, the likelihood of poor and working-class students to stay in school decreased by 7.8%. The researchers also found that financial aid was often insufficient in covering the entire cost of tuition and college related expenses. First-generation students made up 63% of the recipients of the hardship fund grants at The School of Business, and most were working multiple jobs.

“The creation of the hardship funding program did more than provide financial relief to students, it had the effect of creating a sense of community and care for these students,” a PSU study by Wagner and Sanchez found. “Students reported a desire to give back to the school, to perform better in their classes, and a feeling that the school cared about them as individuals.”

“Portland State believed in me, believed that I could do it, believed in my future, that’s what helped me work even harder,” said a hardship fund recipient.

The study, Student Perceptions of Institutional Care: Making Sense of Hardship Funding as a Retention Tool, was published in the Journal of College Student Retention. PSU postsecondary education professor Karen Haley co-authored with Wagner and Sanchez. It reviewed the immense success of this program, and established how hardship grant funding programs can both increase persistence and influence student perceptions about their institutions. Wagner and Sanchez have advised other PSU departments through starting their own hardship funds, and hope to inspire other institutions to follow suit.

Wagner discusses the hardship fund’s impact, and the impact it could have for other universities.

As drop-out rates increase and enrollment decreases in higher education, how essential would you say it is for institutions to develop their own hardship funds to retain their students?

There is a need for colleges to create hardship funds, not only because tuition continues to increase and students have to work to support their studies, but also because we have a responsibility to support students beyond the classroom academics.  Helping students in their moments of financial hardship builds trust and shows them that the institution sees their promise and ability to graduate.

There is a popular narrative today that one can get ahead without going to college.  In the short term, this might seem like a good idea because tuition could be redirected to pay for food, housing, utilities, transportation.  Yet, research shows that the lifetime earning potential is great for those with a college degree. Hardship funding helps students pause and not make a decision to leave school based on financial stress. If the student is intellectually capable and motivated to be in college, we believe they should be supported to continue and graduate.

How does this research help set the stage for a more diverse workforce?

We are creating a support system for all those with desire, raw intelligence and work ethic. This means that we are seeing students who are more diverse and whose needs are different from the traditionally Hetero-white male college student of the 1950s.  When we educate diverse individuals, we launch them into the workforce which, in turn, can lead to changes in the businesses that fuel the US economy.

What is your hope for the future of this program and its influence on other universities?

At PSU, and many other urban universities, some students don't have a strong support system, or if they do, they struggle with money. When a student applies for hardship funding and admits their struggles in their application, it is a humbling and vulnerable act of courage. When we are able to respond by hearing them, giving them money, and telling them we believe in them, it changes them.  Hardship applicants tend to “low ball” their request for funds. Perhaps out of embarrassment or shame, and perhaps also out of a sense that they don’t deserve help. But they want to stay in school, and so they ask. It is often the last resort. They don't take it as a given that they will graduate and when we tell them that we believe they can, and are worth investing in, it changes their outlook.