Report Proposes Using Tax Filing, Public Income-support Programs to Increase Early Awareness of Financial Aid
By Charlotte Etier and Mandy Sponholtz, Policy & Federal Relations Staff
In a report released yesterday, the Urban Institute explores new avenues for providing information about the availability of college financial aid to lower-income families with children in middle school. The study reviewed numerous social programs for low-income families, and ultimately focused on communication strategies for families in the Supplemental Nutrition Assistance Program (SNAP) and Medicaid programs, but also looked at the federal income tax filing process. These three avenues emerged as the most promising outreach vehicles due to their large populations, participant characteristics, and administrative structures.
As mentioned in prior reports, early notification or commitment programs can boost enrollment rates of low-income students. However this report proposes multiple methods be used to communicate with this population in order to increase the odds of success. “A concerted effort to promote early awareness of financial aid opportunities should involve multiple strategies,” the report details. Adding, “moving in all these directions is the best way to ensure that a high percentage of low-income families and students will learn in a timely manner about the financial aid available to help them pay for college.”
Each of these three areas demonstrate rich potential for early awareness:
SNAP:
- Potentially reach 10.2 million households with children.
- Communicating at the time of application could expand outreach efforts to additional families who do not ultimately receive SNAP benefits.
- Families receiving SNAP would likely qualify for a Pell Grant, with many families qualifying for the maximum grant amount.
Medicaid and Children’s Health Insurance Program (CHIP):
- Potentially reach half of all low-income children in the United States.
- As with SNAP, communicating at the time of application, could expand outreach efforts to additional families who do not ultimately receive Medicaid or CHIP benefits.
- Families receiving Medicaid or CHIP would likely qualify for a Pell Grant, with many families eligible for the maximum grant amount.
Federal Income Tax Filing Process:
- Potential to reach a large number of low-income families, including those who claim the child tax credit and Earned Income Tax Credit.
- Could target outreach using IRS data.
- Although the IRS does not have direct contact with most filers, roughly 60 percent of filers use tax preparers, so outreach provided through tax preparers could reach a large number of families.
The report points out that providing information personalized or customized to the family's circumstances may yield the most effective results, but notes that making general information about college costs and the availability of Pell Grants would also be beneficial. Also, personal contact – rather than a letter, email or text message – proves to be a successful method.
The report notes, “any route chosen for targeting families will involve its own questions about timing and its own bureaucratic or structural barriers.” To address some of these questions and barriers, the researchers conducted an examination of the level of information provided and approaches to delivering information. Overall, the report proposes three broad approaches to using participation in social service programs or filing of federal income taxes as an avenue to increase awareness of college financial aid:
- Providing information when the family applies for SNAP or Medicaid, or files a tax return;
- Contacting families after they completed the SNAP or Medicaid application, or filed a tax return; and
- Including information about college financial aid as part of communications about benefits and services for low-income families.
Due to the different application processes and qualifications for SNAP and Medicaid programs, the most promising approaches, in the short run, would utilize state-level integrated applications for social social support programs, as well as through organizations providing assistance with filing federal income taxes.
This paper is one part of a greater consortium by the Bill & Melinda Gates Foundation through their Redesigning Aid Design and Delivery (RADD) grant with NASFAA, the National College Access Network (NCAN) and the Education Trust to simplify the financial aid process and increase access and success. NCAN contracted with the Urban Institute to conduct this research study. As part of this consortium NASFAA previously released it’s report "Great Expectations: Implications of Implementing Prior-prior Year Income Data for the FAFSA." If you would like to learn more from these groups on their proposals to simplify the financial aid process please stop by their session, "Improving Student Solutions from Federal Policy Change," Tuesday at the NASFAA National Conference.
Publication Date: 7/17/2015
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