Simplifying Student Aid

Brief

Simplifying Student Aid

October 19, 2020

Abstract

Simplifying the student aid application process and making the system easier for students and families to understand and navigate has long been high on the agenda of policymakers and advocates for college access. Despite progress, the process for completing the Free Application for Federal Student Aid (FAFSA) remains daunting for many students and families, and the formula for computing expected family contribution (EFC) on which eligibility for federal aid, as well as much state and institution aid, is based remains complicated and confusing.

In this brief, we review issues central to simplifying the Pell grant system and discuss strategies for strengthening the system for allocating aid from other sources. Based on the evidence, we recommend:

  • Separating the determination of Pell eligibility from the need analysis formula for other sources of aid
  • Moving away from the “snapshot” approach to the federal methodology by considering multiple years of income and treating families with the same number of children similarly, and
  • Addressing assets more comprehensively

A simple Pell grant allocation system can increase college access for low-income and first-generation students, but some states and institutions will need more information to ensure the effectiveness of their aid dollars. To maintain a financial aid system that makes attendance possible for a wide range of students, and has the ability to equitably evaluate a student’s need for aid, we suggest Congress simplify the formula for Pell eligibility, and separate this eligibility from an improved EFC calculation. An improved financial aid system will make attendance at all types of institutions a reasonable possibility for a wide range of students.

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