Students who receive the education maintenance allowance (EMA) have better attendance records and are more likely to complete courses than wealthier students not eligible for the support, according to research.
Despite coming from the poorest families and in some cases having low prior qualifications, EMA students miss fewer classes and are more likely to stay in education than even wealthier students, according to data gathered by the 157 Group of large colleges.
The 157 Group, which hopes to use information gathered from its 28 members to prompt a rethink over the abolition of the pound;30-a-week payments for students from low-income families, said that the threat of losing the EMA if their attendance fell acted as a powerful incentive.
City and Islington College in London said that 2,900 students received the EMA in 200910, up 12 per cent from the previous year, and 95 per cent of them completed their courses, compared with only 90 per cent who were not eligible.
Data from Lambeth College in London showed that students receiving the EMA were more likely to stay the course (90 per cent compared with 75 per cent of other students) and more likely to pass (94 per cent compared with 81 per cent).
"Since EMA recipients are by definition drawn from the more disadvantaged part of the community, the fact that they perform better than average, as illustrated in the Lambeth data, is remarkable," the 157 Group report said.
The Manchester College, meanwhile, compared figures before and after the introduction of the EMA. In 2002 almost one in five students who dropped out cited financial reasons, but by 2009 it was just one in 20.
It also found attendance was 4 per cent higher among EMA recipients on A- level equivalent courses, and 8 per cent higher on lower level courses.
Research from York University for the Audit Commission this year estimates that students who spend time out of education and employment cost the taxpayer an extra pound;56,300 over their lifetime.
A 5 per cent increase in the number of dropouts would imply a pound;1.7 billion lifetime cost per academic cohort.