Objective: This study examines whether New Jersey’s state-funded merit-aid program, which was designed to benefit community college students, including first-time full-time student enrollment, associate degree completion, and transferring out. We compared STARS to programs in other states by applying a typology that categorizes state-funded merit-aid programs by whether they are designed to be inclusive of community college students. Methods: Using institution-level data between 2001 and 2021, we used propensity score matching to select comparable community colleges to be included in the untreated group, as well as difference-in-differences and event study approaches to test our hypotheses about the relationship between STARS program adoption and community college outcomes. Results: We found that New Jersey’s STARS programs increased White students’ enrollment and associate degree completion in community colleges relative to community colleges in states with merit-aid programs that disproportionately favor 4-year students. However, we did not find the same relationship for non-White students. It was unlikely that the enrollment increase was the result of community colleges siphoning off enrollments from other higher education sectors. Additionally, we did not find any evidence that STARS reduced students transferring out before completing credentials. Conclusions/Contributions: By examining a unique merit-aid program focused on community college students, we discuss implications to adopt and design more equitable financial aid policies to support community college enrollment, completion, and transfer. Our results help advance current scholarship by considering tensions among access, social mobility, and merit, while studying whether merit-aid programs can serve as an equitable mechanism for improving community college outcomes.
Hu et al. (2026) studied this question.