Applications for financial aid lagging among low-income students

FASFA application. Image: Public Domain

FASFA application. Image: Public Domain

Amid pandemic, difficulties in accessing resources needed to navigate the complex financial aid process

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The economic hardship for low-income families caused by the COVID-19 pandemic may have another casualty: high school seniors accessing financial aid to attend college.

Applications for federal and state financial aid for college are a leading indicator of how many students will enroll in and complete a college degree. A University of Michigan study shows that those applications have not increased in tandem with the additional need.

The Free Application for Federal Student Aid and the Tuition Incentive Program, Michigan’s largest state scholarship program for low-income students, can unlock substantial resources available to needy students in the state. Yet the study found "the increased financial need of students due to the pandemic has not resulted in increased financial aid applications.”

"It is worrying that we haven’t seen any aid application expansion, and particularly that the gaps based on race or school income level have widened. FAFSA and TIP completion rates would need to be even higher than normal to keep up with the challenges created by the pandemic,” said Kevin Stange, associate professor at the Ford School of Public Policy, who led the Education Policy Initiative.

The research examined school-level information on FAFSA and TIP completion at 920 schools in Michigan, published by the Michigan Department of Treasury. The brief was also written by EPI postdoctoral scholar Sabrina Solanki, master of public policy intern Orlando Sanchez Zavala, and Catherine Brown from The Institute for College Access and Success.

Title I schools, which receive targeted assistance to help disadvantaged children achieve higher academic standards, have lower FAFSA completion rates than non-Title I schools in Michigan. The study shows TIP completion rates are also lower at Title I schools than non-Title I schools, and the gap has widened by 3 percentage points since 2019. TIP supports 24,000 Michigan college students with approximately $60 million a year in tuition.

It also notes FAFSA and TIP completion rates vary substantially across regions and counties, which potentially illustrates the inequitable distribution of access to resources needed to successfully navigate the complex financial aid process.

The study concludes with recommendations for state policymakers with the aim of closing the identified gaps, including:

The governor and legislature recently extended the TIP application deadline by a year due to COVID-19 but did not eliminate the requirement. Brown had noted earlier the extension of the TIP deadline due to the pandemic had been a good start.

"We hope that this deadline can be extended permanently to ensure that all future TIP eligible students have more time to understand the aid available to them before they lose it,” she said.

From an academic standpoint, the study also urges expanding data sharing on financial aid and postsecondary enrollment in order to enable more rigorous analyses of the effectiveness of state investments in postsecondary education.

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