Three Ways to Improve the Financial Aid Process Today

By Allie Bidwell, Communications Staff

While there are many improvements policymakers could enact to streamline and improve the financial aid process, there are three options available right now that can help students make better-informed decisions about which college to attend, according to a new report from the National College Access Network, The Education Trust, the Urban Institute, and NASFAA.

The paper, released today, was supported by a consortium grant from the Bill & Melinda Gates Foundation to produce policy recommendations through its "Reimagining Aid Design and Delivery" (RADD) project. Three strategies policymakers could move forward with now to improve the financial aid process, the paper said, are creating an early awareness system to notify low-income students of their aid eligibility sooner, changing the FAFSA application to be based on prior-prior year (PPY) income data, and putting an emphasis on improving completion rates for Pell Grant recipients.

“All of these solutions are common sense ideas that can ease the number of barriers on the pathway to college success for low-income and first-generation students and students of color,” the paper said.

One of the major barriers to success, the paper said, is that although many students have college aspirations, a good number do not end up enrolling in college after graduating high school.

“Misconceptions about the price of higher education can be one discouraging factor leading students who incorrectly believe they cannot afford college to opt-out of college preparatory courses,” the paper said.

Making students aware of their financial aid options sooner can help, the paper said. The authors suggest using a number of federal means-tested benefits programs, such as the free- and reduced-price lunch program, the Supplemental Nutrition Assistance Program, and Medicaid, to reach out to families. But in order for the outreach to be beneficial, it would have to reach a large number of families at the appropriate time, which is why the authors suggest using several of the programs to notify families of their options.

Some students also likely bypass applying to certain colleges because of the timing of the FAFSA application.

Today, students apply to college before knowing how much federal aid they might receive.

“Applying for aid first, and then submitting college applications makes more sense,” the paper said.

The White House recently announced that it will allow the use of prior-prior year (PPY) income data on the FAFSA beginning with the application for the 2017-18 school year. The move will allow students to file their federal financial aid applications as early as October 1, rather than in January, and see their aid offers sooner. Higher education organizations, including NASFAA, have long advocated for the move to PPY.

The use of PPY income data could also lead to further simplification of the FAFSA application, the paper said.

“The U.S. Department of Education could explore further IRS cooperation to enhance data-sharing and achieve even more simplification,” the paper said.

Finally, the authors suggest using information on Pell Grant recipient graduation rates to improve college choice. The lack of information on Pell recipient graduation rates not only hurts the students making decisions about college, but also policymakers in charge of making choices on program effectiveness, the paper said.

A new report from The Education Trust compared the graduation outcomes of Pell Grant recipients and non-Pell Grant recipients, and found that on average, there is just a 5.7 percent graduation rate gap between the two student groups at the institutional level, compared with 14 percent nationally.

While the authors of the RADD paper said the differences in graduation gaps matter less to students – who would be better off going to a school that serves all students well – the differences are important to policymakers tasked with devising solutions to address the disparities.

Schools with low graduation rate gaps and high overall graduation rates should be incentivized to take in more low-income students, the paper said, while schools with low gaps, but low overall graduation rates should be motivated to improve.

“The path to a successful college experience requires hard work along many steps for all students,” the paper said. “However, low-income students face many additional barriers as they must coordinate how to pay for college. … Taken together, these steps will allow low-income students to know college is an option, pursue financial aid more easily, and matriculate to an institution that will serve them well.”

To learn more about NASFAA’s prior RADD work, funded by the Bill & Melinda Gates Foundation, visit


Publication Date: 9/29/2015

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