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Study Estimates More than $3.7 Billion in Aid for Pell Grant-Eligible Students Went Untapped

By Owen Daugherty, NASFAA Staff Reporter

Graduating students from the high school class of 2021 left nearly $3.75 billion in federal student aid on the table simply by not applying, according to a new analysis by the National College Attainment Network (NCAN).

NCAN estimates the $3.75 billion in unclaimed aid comes solely from roughly 813,000 students who were eligible for Pell Grants but did not complete the FAFSA. 

"The Pell Grant is one of our best, and best targeted, tools to close the equity gap in postsecondary attainment," NCAN CEO Kim Cook said in a statement accompanying the report. "This stunning increase in financial aid dollars ‘left on the table’ comes as we are battling historic declines in college enrollment. As a country, we need to work to address this disconnect systemically."

A previous analysis conducted by NerdWallet for the 2017-18 academic year found students left behind $2.3 billion in Pell Grant funding.

The significant increase in unclaimed Pell Grant aid is likely due to two factors, NCAN suggested. First, a $425 increase in the maximum Pell Grant award between 2017 and 2021 amounts to more than $345 million in combined unclaimed aid for the 813,000 Pell-eligible students who didn't file.

The second factor is more concerning, with NCAN citing the low FAFSA completion rate of the 2021 graduating class. In 2017, 61% of high school graduates completed the FAFSA, according to NCAN’s data. In 2021, an estimated 53% of graduates completed the FAFSA by June 30, 2021.

Experts point to the pandemic as a key reason behind the significant decline in FAFSA completions. Additionally, since the onset of the pandemic, institutions of higher education have recorded a 5.1% decline in enrollment.

States with the largest sums of untapped Pell dollars were those with the highest populations, such as California, New York, Texas, and Florida.

However, states with high FAFSA completion rates for high school graduates in the 2020-21 academic year, and therefore a relatively low sum of unclaimed Pell dollars, were Tennessee, Louisiana, Washington, D.C., Illinois, and Rhode Island.

Notably, both Louisiana and Illinois have policies already in place that require students to complete the FAFSA in order to graduate high school.

NCAN pointed to some states’ efforts to boost FAFSA completion as examples to follow, such as FAFSA completion challenges, universal FAFSA completion policies, and FAFSA data sharing among states.

“NCAN urges policymakers at the federal and state levels to explore strategies like universal FAFSA, FAFSA simplification through verification relief, and building postsecondary advising capacity using ESSER funds, to address college affordability, increase Pell Grant usage, and expand students’ postsecondary options,” Cook added.

It’s important to note the analysis is based on estimates only, with assumptions made that all high school graduates who are eligible for financial aid would submit a FAFSA and subsequently enroll at an institution of higher education directly out of high school. 

 

Publication Date: 1/27/2022


David S | 1/27/2022 2:53:21 PM

Combine a pandemic that caused more economic uncertainty than most people alive today have ever seen, student loan horror story clickbait, and the amplification of the growing "college isn't worth it" sentiment (which mostly comes from people who went to college and sent/will send their kids to college too), and this unfortunately isn't surprising.

Theodore M | 1/27/2022 11:13:28 AM

Are these students who actually went to school, or is this assuming every HS graduate should have gone to school?

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