To attract and retain more academically qualified students to science and mathematics, we developed a merit-based scholarship program for incoming students with STEM interests. Scholarship recipients participate for the first two years in an interdisciplinary learning community and declare a STEM major by the sophomore year. STEM Learning Community (SLC), a year-long course initiated in fall 2009, has become a permanent part of the College curriculum. Content consists of weekly meetings for discussions and presentations on such topics as scientific ethics, relationships between science and technology, the nature and history of science, and the interplay between scientific discovery and societal development. A major component are group research projects conducted during the school year and presented at our annual undergraduate research symposium. In addition, we provide career counseling, visits and presentations by STEM professionals, and internship opportunities. Students report that they are developing such valuable skills as problem solving ability, communication skills, collaboration, and knowledge of the research process. Enrollment and graduation data show that numbers of participants, especially women and minority students, increased following the inception of the SLC. The results suggest that targeted scholarships combined with engagement in collaborative undergraduate research are a useful tool for enhancing STEM recruitment and persistence. [Cover title varies: "Increasing STEM Enrollment Using Targeted Scholarships and an Interdisciplinary Seminar for First- and Second-Year College Students."]