The voices of Urban Institute's researchers and staff
July 16, 2015

College financial aid: Revealing the secret

July 15, 2015

College affordability is high on the political agenda these days, with new proposals for “free” or “debt-free” college emerging almost every day. But even if we find a way to dramatically decrease tuition prices, low-income families will need help paying the other expenses involved in going to college. Too many of them do not know that significant financial aid is available to them. Getting that information out in a way that allows families to access, understand, and process it will not be simple, but it is critical to helping low-income students make college a reality.

The federal government provided $34 billion in Pell Grants to 9.2 million low- and moderate-income students in 2013-14. These grants average about $3,700 per student and will be as high as $5,775 next year for full-time students with the lowest incomes. Since community college prices average under $4,000 for full-time students, this aid goes a long way for many who would otherwise face real uphill battles in financing education.

Unfortunately, too many of the students who need this assistance don’t know about it. Their parents, many of whom have no college experience, don’t know about it either. If students don’t view college as a realistic possibility, they have little incentive to prepare academically—take the right courses, study hard, plan ahead.

Possibilities for making families aware of financial aid opportunities early on

Advocates for increased college access have long suggested that aid programs would be more effective if they were simpler and if potential students and their parents knew about these programs well in advance of the actual college decision. But to date, these statements have not been grounded in analysis of what it would take to implement workable strategies.

A new Urban Institute report, released today, delves into the practical questions of how an early awareness program for middle school students might be designed. The study was sponsored by the National College Access Network and funded by the Bill & Melinda Gates Foundation through their Reimagining Aid Design and Delivery project.

Tax preparers and tax software producers are open to the idea of incorporating information about Pell eligibility into their work with low-income families. Most of these families now file federal income taxes to benefit from the earned income tax credit, which has eligibility criteria quite similar to those for Pell Grants. The IRS already exports some data from tax forms to financial aid applications, so this process might be expanded to facilitate early awareness of financial aid.

Another option is reaching low-income families through public benefit programs. Some states have developed systems for coordinating public benefits from different agencies. It should not be difficult to add federal financial aid to the list of benefits about which low-income families need information. The Centers for Medicare and Medicaid Services might be able to provide information to their eligible population. The SNAP program now certifies students for automatic free and reduced-price lunch eligibility and could provide information about Pell Grants to those students.

Barriers we should work to overcome

There are real challenges to all of these possibilities. Families struggling to make ends meet may not be able to process information about a benefit so far in the future. Because of restrictions on how information provided for taxes or specific program eligibility may be used, families may have to request information about financial aid before tailored information can be delivered. Caseworkers in income support programs have limited time, resources, and knowledge to participate in this process. And there are no national lists of participants in these state-based programs. These are just some of the hurdles to implementing a practice that seems like a no-brainer.

But it is worth making a concerted effort to overcome these barriers.   

Moving in multiple directions to develop early awareness systems is the best way to ensure that a high percentage of low-income families and students will learn about available financial aid in a timely manner. We should acknowledge the difficulties, investigate further how to make this approach feasible, and do what it takes to spread the word to young children and their parents about the college aid that can transform their lives.

Photo by Mark Humphrey/AP

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