As the Department of Education (ED) continues its efforts to roll out a simplified FAFSA application this December for the 2024-25 application cycle, a new paper draws focus to the barriers that students face when applying for federal financial aid.
The paper, released last week by the Brookings Institution, has a particular focus on the barriers that low-income students face in navigating higher education and includes a list of recommended approaches that can help mitigate hurdles that crop up when filling out the FAFSA.
While the Office of Federal Student Aid (FSA) has provided a roadmap for the implementation of FAFSA simplification, there is still complexity in the system for students, stemming from verification, which selects low-income applicants at disproportionate rates, as well as misinformation about aid eligibility.
In terms of misinformation, Brookings analyzed a 2009 national longitudinal study of high schoolers, who were followed through their secondary and postsecondary years, which showed that low-income students were particularly under-informed and under-supported with respect to financial aid and the FAFSA process.
More than 1 in 5 students from the lowest-income quintile who intended on going to college who didn’t fill out the FAFSA said they “did not know [they] could complete one,” Brookings found, compared with just 6.8% of students in the highest-income quintile. Additionally, more than one-third of lower-income students didn’t fill out the FAFSA because they said they did not know how, compared with 10.6% of students in the upper-income quintile.
Lower-income students from this study were also found to be under-informed in terms of eligibility and were disproportionately likely to assume they were ineligible for financial aid.
“About a third of students who didn’t file the FAFSA thought they were ineligible,” Brookings found. “Among those students, 38.5% in the lowest-income quintile thought they were unqualified for FAFSA because their ‘academics [were] too low,’ compared to 9.1% of highest-income students (despite there being no academic performance threshold for incoming students to apply for federal aid).”
In order to combat this long-term trend, Brookings highlighted a number of research-based methods that have demonstrated success in improving financial aid application completion rates for low-income students.
A primary resource to promote FAFSA completion is FAFSA assistance programs like “FAFSA Sundays” and FAFSA drives, where advocates and organizations offer free and accessible counseling to students with one-on-one assistance made available to high school seniors.
Additionally, the implementation of FAFSA mandates, which require high school seniors to complete the form in order to graduate, have shown positive trends in terms of completion rates.
Brookings also highlighted the use of personalized mailings and text messages as an additional way to increase applications and enrollment.
Brookings also urged ED to relax the rate of income verification for financial aid, which is about 35%, to a level that matches the rate at which federal tax returns are selected for audit, about 2%.
According to Brookings, verification deters student enrollment and costs colleges nearly $500 million annually.
Ahead of the implementation of the streamlined FAFSA form for 2024-25, Brookings also urges ED and the higher education community to strive to reduce as many barriers as possible to ensure all can attain a postsecondary credential, which begins with a successful rollout of the new form.
“The FAFSA Simplification Act will make the process of applying for aid easier in the long run, but it will be a difficult transition for students and families,” Brookings warns. “The FSA has coordinated an outreach campaign to provide resources for students, families, schools, states, and college-access professionals regarding the changes. This is helpful, but the changes will require sustained proactive work to communicate with students and families and to avoid confusion.”
Publication Date: 5/8/2023