Ongoing Barriers to College Aid

Two new papers find application rates for federal student aid continue to lag for low-income students, and serious barriers remain for those most in need of help paying for college.

October 4, 2017
 

Two tweaks to the federal student aid application process -- an earlier start date and use of family income data from the previous year -- appear to have boosted completion rates of applications for federal student aid. A years-long decline in filings of the Free Application for Federal Student Aid was reversed. Every state saw its application numbers go up. And applications by high school seniors were up 9 percent over the previous year as of June 30, traditionally considered the end of the academic year.

But two papers released Tuesday by the National College Access Network found that those changes didn't fundamentally simplify what's often a painfully complicated process of applying for aid to attend college. And students from the lowest-income school districts -- those most in need of federal aid -- continue to lag peers in wealthier districts in completing the FAFSA.

Those findings suggest the need for additional reforms to streamline the financial aid process and make sure those students are not leaving federal aid on the table. And while the Education Department was able to carry out policy changes last year without congressional authorization, lawmakers will likely need to direct some additional changes called for by proponents of a simpler FAFSA application.

Carrie Warick, director of policy and advocacy at the National College Access Network, said advocates saw tremendous progress over the last year -- evidence that policy change could have a serious impact on student completion rates.

“But we’re not there yet,” she said. “We’re looking to see what the next set of improvements will be to help get us even further.”

The Obama administration for the first time made the FAFSA application available Oct. 1 last year -- three months earlier than the traditional start date of financial aid application season -- to give students more time to complete the application and to consider award packages before picking a college. It paired that change with use of prior-prior year income data in the application, a switch that allows students to use their family's most recent income data on file with the federal government instead of estimating income they would report to the IRS in the spring.

(The interest in the earlier aid cycle appears to have carried over to this fall. The Department of Education reported that 238,000 FAFSA applications were received Sunday, the first day of the 2018-19 federal aid cycle.)

The changes carried out by the Obama administration did have real benefits for students, even beyond the boost in FAFSA applications, NCAN found. With the federal aid application available in the fall, high school counselors and other student advisers can have discussions about the cost of college at the same time as they consult with students on which colleges and universities would best match them academically and socially. The earlier start to the aid process also meant that students received financial aid packages earlier and that they and their families had more time to review those offers when deciding on a college.

The effects of some changes in campus policy made in response to the earlier FAFSA timeline will take longer to unpack. About 10 percent of four-year institutions, for example, and about a fifth of private four-year institutions, moved up aid deadlines to get financial aid packages to students sooner. But it's unclear if those changes could negatively affect lower-income students, who typically take longer to complete financial aid applications.

Other campus policy shifts provided more transparency to applicants. Some colleges, NCAN found, are now setting tuition rates for the following year in the fall, giving applicants a better idea of what it will cost to attend when they apply.

Students who are completing the FAFSA aren't necessarily picking a college earlier. That's possibly because they are taking more time to weigh their options and possibly because state aid deadlines haven't moved up to reflect the new FAFSA timeline. For those federal policy changes to have their full effect, the paper found, state aid policies will have to align more closely with the new federal aid cycle.

Although the earlier timeline provided some relief to students and their parents and advisers, it didn't necessarily make actually completing the FAFSA, which contains more than 100 questions, any easier. And a second NCAN paper found that completion rates for the application tracked closely with a school district's poverty rate. In only six states -- California, Colorado, Illinois, Minnesota, New Mexico and Washington -- did the group find that higher poverty rates in school districts were associated with higher completion of the application. (A separate paper in August examined those successes in four states.) Other states, like Tennessee and Maine, saw districts with high rates of completion, regardless of the poverty rate.

The gap between the wealthiest and poorest districts didn't grow in the 2016-17 aid cycle even as the overall filing rate increased. But the group argues federal policy makers should do more to close the gap even while pushing for higher overall completion rates.

Recommendations to Improve Completion

A number of organizations, including NCAN, have offered suggestions in recent years for further improving the FAFSA to make it less burdensome to students, including continuing to pare down required financial questions for the lowest-income students.

The Bill & Melinda Gates Foundation in 2015 backed the use of tax data already on file as well as more time for students to complete applications. And it recommended sorting student applications based on their financial profile. Applicants whose families do not file tax schedules would have to answer only a handful of questions confirming certain demographic data. The Gates Foundation estimated that two million additional low-income students could get financial support they needed to attend college with those changes. It also argues a simplified application will allow high school counselors and other advisers to spend more time with students who have to answer more questions about their families' finances.

"That in many ways will ultimately reduce the burden on folks helping families throughout that process," said Nick Lee, a senior program officer at the Gates Foundation. "That will allow them to spend time with folks in those districts who do need more resources."

While the department could act on its own to provide more flexibility for verification requirements, members of Congress would have to weigh in on the length of the financial aid application and questions about family income. That could fit the priorities of Senator Lamar Alexander, the Tennessee Republican who chairs the Senate education committee and has said simplifying financial aid is a key goal of his in reauthorization of the Higher Education Act.

Justin Draeger, president and CEO of the National Association of Student Financial Aid Administrators, said the idea behind those recommendations is that low-income people shouldn't have to demonstrate multiple times that they are poor to receive state and federal assistance.

"To the average citizen, it's one federal government," he said. "The idea that these federal agencies can't talk to one another, I think, defies logic for most people."

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