Student financial aid is falling dangerously short

Education equality starts with affordability

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This January, millions of high school seniors across the country find themselves in the midst of the college application process. While many students grapple with essays, standardized tests, and interviews to receive admissions offers, even more students debate whether they can afford to enroll in college at all.

💸 The Free Application for Federal Student Aid (FAFSA) is the gateway to accessing funding to attend college. Each year, using FAFSA data, the US government and universities across the country direct $141B in grants which do not require repayment, compared with $95B borrowed in student loans. Despite the application being a free, non-binding questionnaire to understand the potential cost of college, nearly half of high school seniors neglect to take the 60 minutes required to complete it. However, the percent of students who explore the possibility of affording college varies greatly across schools.

Every year, students are joyfully surprised by how much aid the FAFSA unlocks. Students, like Karina, who face difficulties like homelessness and addiction, are surprised by how quickly they can complete the FAFSA and learn that school is available to change their circumstances.

Yet despite these opportunities, students continue to not complete their FAFSA, leaving themselves out of consideration for potential funding. 

Jacinda Vertrees missed the deadline for student financial aid. She was a valedictorian supporting her single mother but couldn’t get the scholarship she needed. - Source: Wdrb

Jacinda Vertrees, a class valedictorian who balanced working full-time to support her single mother, found out too late that her FAFSA was missing critical information. Despite her merit and hard work, Jacinda lost access to federal aid options and various scholarships. She’s not alone. Just last year, students missed out on $3.75B of guaranteed Pell Grants, as well as the chance to receive financial aid scholarships from dozens of colleges that would meet their entire demonstrated financial need.

Factors that impact FAFSA completion rates

Data on who completes the FAFSA illuminates some of the reasons why students self-limit their graduation plans before understanding their options.

State Policies

The FAFSA completion rate among high schools varies widely across states.

📍Alaska, Utah, and Colorado are the lowest states for students receiving financial aid. While this may be for cultural reasons in communities that don’t want to take out debt, this is unlikely, suggesting that lack of information may be the bigger drive. One analysis from 2015 found that high school seniors left $45M in Pell Grants on the table because they didn’t apply even when they were eligible. Pell Grants don’t need to be paid back.

📈 Some of the better states for student loan completion include Tennessee, Louisiana, Illinois. These states have at least 20% more students complete the FAFSA than the national average. States are most effective at raising completion rates when they take an active role in fostering student awareness of the process.

Tennessee, for example, publishes the College for Tennessee website which helps students, parents, and schools navigate the entire college application and funding lifecycle. Tennessee also offers state-wide programs like, FAFSA-Frenzy and the TN FAFSA Challenge, to get students to complete the form and the state publishes real-time results for the public.

Another top-performing state, Louisiana, was the first state to enact universal FAFSA requirements to graduate from high school. Louisiana students also have instant access to assistance helplines when filling out their forms if confused.

Type of School

🏫 Private school students are 20% more likely to complete the FAFSA than their public school counterparts. Private schools often claim to put more resources into preparing students for college and guiding them towards higher education. These benefits can be unobtainable for many families as the average cost of a private high school in the US is nearly $16,000 per year, although the number of private school students receiving some financial aid is estimated to be 28%.

Family Income and Title I Funding

🏛️ Schools can qualify for federal funding grants through the Title I program if at least 40% of their students come from low-income families. Generally, these funds can help schools afford more staff like teachers, administrators, and guidance counselors, as well as instructional material and student meals at extracurricular events.

These grants have not closed the FAFSA completion gap, however, as public school students from higher-income schools are still 8% more likely to fill out the forms. The Biden Administration has proposed more than doubling Title I spending in the coming fiscal year to help low-income students have the same access to opportunity as their peers.

School Demographics

💰 Black and Latinx communities may have lower taxable income, thereby leading to under-investment in school programs that could help get students to college. The effects of place, school type, and neighborhood income intersect to create barriers that affect minority students more than their White counterparts. Throughout the United States, minority communities have lower income due to systemic barriers to opportunity. This income gap then translates into fewer resources (teachers, instructional materials, guidance counselors) for the students. 

👮‍♂️ With the resources that schools do have in Black and Latinx communities, they may invest in the wrong infrastructure, like policing the students instead of getting them to college. The majority of mostly-Black-and-Latinx schools have a police presence on campus, for instance, and these students with on-site officers are five times more likely to be arrested. This money spent on policing could instead be spent on hiring college counselors.

In these underfunded, enforcement-oriented environments, minority students are less likely to explore their financial options for college. Even when college is a priority, investigations by the Department of Education reveal that students of different ethnic backgrounds do not have the same access to adequate information to properly file the FAFSA. As schools serve majority White or Asian student bodies, the rate of FAFSA completion increases 📈, while schools see these rates decline when the student body is increasingly comprised of Black, Hispanic, Native American / Alaskan Native, and Native Hawaiian / Pacific Islander backgrounds 📉.

The Path Forward

Education administrators, teachers, and parents can all play a role to expand the financial viability of college. Policies implemented in states with high completion rates, as well as programming playbooks by organizations like the National College Attainment Network and Form Your Future offer a series of recommendations to increase FAFSA completion. 

1. 👨‍👩‍👧‍👦 Rally community support. The classroom is not the only place where students reflect on their futures and find role models. The power of involved parents, volunteers, and nonprofit organizations cannot be overstated. Form Your Future has developed a resource library 📚 to guide schools on recruiting community members to offer services like 1-on-1 guidance counseling for students, assisting paperwork completion, and creating events to spread awareness such as State-wide Completion Challenges.

2. 🚀 Demonstrate the economic value to students. In their playbook for making financial aid interpretable,  the American Talent Initiative (ATI) points out that less than 25% of families view financial aid offers as easy to understand. When students do not understand the true cost of attending college, they are less likely to attend. ATI is an alliance of 130+ prestigious universities committed to increasing the enrollment of low- and moderate-income students by 50,000 in the next three years. These schools frequently offer generous financial aid through scholarships, but they rely on students to engage.

3. 👨‍🎓 Make college consideration a requirement for graduation. The average high school student spends nearly 500 hours per year completing homework assignments to prepare them for graduation.  Only eight states, however, require high school seniors to spend part of this time on the FAFSA. High schoolers must be tasked and held accountable to fill out the college common application and FAFSA because the resulting optionality increases the rate of enrollment in higher education.

Completing the FAFSA does not guarantee that a student will ultimately choose to enroll in higher education. Even with more financial aid options, the potential benefits of college may not outweigh the personal costs and required effort.

Location, school type, or race should not determine whether a student gets the financial aid that they need. Students everywhere should have the resources and information required to make an educated and financially smart decision about college. This can dramatically increase opportunity for them later in life. Without proper access to FAFSA, we risk leaving behind a generation of students.