Goal Complexity in Financial Aid and the Contingency of Organizational Sector

Expectations of public institutions of higher education now include a growing number of competing goals. Financial assistance policies are expected to reward student talent, expand access to education, boost retention and graduation rates, and more. Yet research has not generally provided an empirical assessment of whether and how higher levels of goal complexity are linked to institutional processes and outcomes. The present study examines financial assistance goal complexity in two- and four-year public institutions using survey data from the State Higher Education Executive Officers Association (SHEEO). Findings show that both two-year and four-year colleges are affected similarly by goal complexity in terms of state and institutional financial aid awards but quite differently for student outcomes. Complexity has a strong negative effect on graduation and retention rates at two-year institutions, suggesting that state actors need to better differentiate between their demands of two- and four-year institutions.