Simplifying Federal Student Aid: An Overview of Eight Plans

Brief

Simplifying Federal Student Aid: An Overview of Eight Plans

Abstract

There is widespread agreement that the college financial aid system is too complicated and acts as a barrier to higher education. This brief focusses on how eight different simplification proposals for determining Pell grant eligibility and three alternatives for calculating Effective Family Contribution would affect the distribution of aid and the cost of the Pell Grant Program. Using data from the 2011–12 NPSAS we estimate how students would fare under each proposal. All tend to shift Pell grant funding to students with lower reported incomes, either by increasing participation or increasing grant levels. By basing Pell awards on only two or three factors, we can make it easier for students to understand how much money they are eligible for and that college attendance is possible.

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