Students walk on Virginia Commonwealth University’s Monroe Park campus in Richmond. VCU is one of seven universities participating in a pilot program to provide small-dollar grants to help low-income students complete their degrees. (Thomas Kojcsich/VCU Marketing)

Several public universities are taking part in a pilot program to provide small-dollar grants to help low-income students complete their degrees.

The five-year project is a collaboration of Temple University and the Association of Public and Land-grant Universities, which will use a nearly $4 million grant from the Education Department to examine and build out completion aid programs at up to 10 universities.

Schools across the country have experimented with ways to prevent students from dropping out or taking longer to graduate when money dries up. Georgia State University, for instance, has been lauded for its Panther Grants, which award an average of $900 to cash-strapped students. Cleveland State University started a similar program four years ago, offering a $200 tuition discount and $200 book stipend to students willing to take a full course load of 30 credits to graduate on time.

These types of emergency aid programs are considered a win-win for students and institutions. Students who fail to finish their degrees are often left with education loans and dismal prospects of earning enough to repay their debt. Dropouts run a high risk of defaulting on student loans and subsequently damaging their credit. And for schools, every student who leaves means losing tuition revenue that has become critical in the face of dwindling enrollment.

“At a time when the price of college is higher than ever, it’s exciting to see universities seeking new ways to help students,” said Sara Goldrick-Rab, a project coordinator and professor of higher education policy and sociology at Temple. “This is a partnership to support their efforts and figure out if they are effective.”

The pilot program will run in two phases. The first will evaluate existing grants at seven schools, including Virginia Commonwealth University, Arizona State University and Ohio State University. In the second phase, the universities will conduct a controlled trial of completion grants, whereby eligible students are randomly assigned to a group receiving grants and another without the financial assistance.

Phase two will feature four components: financial aid that keeps students enrolled, messaging on the significance of completing a degree, a pledge from students about their commitment to graduate and advising to help them reach the finish line. Three additional schools will be eligible to participate in this phase of the pilot, with eight universities ultimately selected from the 10 for expansion of their programs.

“We have a set of requirements, but schools can go above and beyond, and add to it,” said Shari Garmise, a project coordinator and vice president of the public university association’s office of urban initiatives. “The ultimate goal is to understand and expand not only the completion grants, but the importance of rethinking financial aid as a completion tool as well as an access tool.”

Although small-dollar grants are barely a decade old, they have produced some significant results. The graduation rate for Georgia State students who received Panther Grants was 134 percent higher two terms after the grant than for similar students who received no assistance, according to the school. Students receiving completion aid at Indiana University and Purdue University Indianapolis were 44 percent more likely to obtain their degree within a year, compared with those who didn’t receive the aid.

Want to read more about college graduation programs? Check out:

Colleges are using big data to identify when students are likely to flame out

When students face financial hardships, these colleges step up