Improving college attendance

Chris Farrell From chief economics correspondent Chris Farrell

On Wednesday, the 24th, Paul had a thoughtful post on college financial aid. In Leveling with colleges about your financial problems he offers up some sound advice for families that have had a setback during the Great Recession.

It got me to thinking about the Free Application for Federal Student Aid (FAFSA). Parents have to fill it out if they want their student to get financial aid. It’s a complicated form despite recent efforts to streamline it. The financial aid system that developed in the post World War 11 era was initially modeled after the U.S. progressive income tax. Over the years, like the tax code, it has evolved into a messy stew of Byzantine rules.

One of my favorite stories about FAFSA came from Thomas Kane, one of the nation’s leading education economists. He worked at the White House Council of Economic Advisors during the Clinton Administration. The head of the Council at the time was Joseph Stiglitz, a Nobel laureate and brilliant scholar. Kane recalls walking into Stiglitz’s office, finding him surrounded with papers, looking extremely frustrated. What was up? A recession in the making? The details of fiscal policy? No, Stiglitz was struggling to make sense of financial aid forms for a college-bound child. Imagine how bad it is when the process confuses someone like Stiglitz?

Here’s the thing: FAFSA’s complexity plays a role in the long running and highly disturbing gap in college attendance between students from high income families and students from low income families. In The Role of Simplification and Information in College Decisions: Results from the H&R Block FAFSA Experiment (NBER Working Paper No. 15361), scholars Eric Bettinger, Bridget Terry Long, Philip Oreopoulos, and Lisa Sanbonmatsu make the case that simplification and counseling together could boost college attendance and aid, especially among low income students. Better information alone won’t do the job.

The scholars targeted families unlikely to know about much about college and financial aid. The professional tax service H&R Block participated in the experiment. (There’s a fitting symmetry to this considering the evolution of financial aid.) Tax professionals helped low- to moderate- income families complete FAFSA. The families were given estimates of their eligibility for government aid. They were told about schooling options.

A randomly-chosen group only got personalized aid-eligibility information.

The payoff from counseling? The students who worked with the professionals were 40 percent more likely to apply for financial aid than the information-only control group. The submission rate of aid applications almost tripled for independent students with a high school degree but no college education.

There are many reasons why students from low income families don’t attend college anywhere near the rate of their better off peers. A number of the issues are difficult to tackle, like poverty and lousy schools. However, this scholarly paper suggests there are some relatively easy changes to make that could dramatically improve the college attendance and life prospects of many young people from low-to moderate-income backgrounds.

  • Jessica Sundheim

    I’ve always wondered about the gatekeeper affect of the FAFSA. When I was 16 I moved out of my mom and step-dad’s home in Tennessee to live with my grandmother here in Minnesota. I attended Wayzata High School. I will never forget the assembly that I attended with my grandmother at which our guidance counselors explained the process of applying to colleges. They did a great job giving guidance to my peers about applying for Harvard or Princeton and state universities, while at the same time convincing my grandmother that the meeting was not for us. They threw words like FAFSA and Pell Grant around as if everyone had heard of them (probably because most of the parents in the audience had). I had no notions of Harvard or even the U of M. I just wanted to go to Community College. On the way home my grandmother told me how my aunt had wanted to go to college, but “you can’t work enough hours to pay for school and go to school at the same time” (in reality she had no idea what the costs were). Because no one in my family had gone to college, we did not know what a deferred loan or a grant was or how easy it was to qualify for student loans.

    Since I did not have the ability to get a scholarship through sports or good grades, I gave up on the idea of going to school. Then, I saw an ad for the Minnesota Concervation Corps in the paper and applied. I found out I could get an educational grant working for them through the Americorps program. I applied and was hired. I signed up for one night class at Normandale and worked four 12 hour days for MCC. How stupid was that? Had I known anything about the funds available for college I would have known to simply fill out a FAFSA and at our income I would have qualified for a Pell Grant and could have gone to school full-time. Then I could have applied for a work-study position, which would have paid more than MCC.

    One other point. Many low-income kids like me, who are living with other relatives cannot get the parental information they need because of family rifts. This makes it impossible to apply. When I applied to the school they gave me a FAFSA, but I had no way of finding out the income of my mother’s household. She still technically had custody of me because my grandmother did not have power of attorney. She did not work, but my stepfather did and he was not the type of person who believed in college degrees, or who would give out his salary and tax information. He had never gone to college and didn’t believe me when I told him that I needed his information. He also thought that grants were linked to grades and therefore I was wasting my time. I found out that despite the fact that I had not lived with my mother for two years, I still had to use her financial information to fill out the FAFSA.

    I ended up getting married and having kids. My husband comes from a well educated family. He is the one who explained to me how grants and loans work. When a person considers that a low income family’s main source of credit are credit cards or payday lending services, it makes sense that they have no idea about loan deferrments, or that their child can qualify for loans. My parents had never purchased a home or a vehicle through loans. I think that they got some of their information from an episode of “Roseanne”, when Becky found she couldn’t go to school. As a result, many low-income people think that a person needs a lot of money or scholarships to attend college. I’ve heard that in the 1990’s when I was trying to go to school there were years when the government did not exhaust all of the student loan money. If that is true, what a shame and a waste for our country.

  • shari

    I live in Minnesota. My daughter had a 5 yr old, was going to college and no welfare. She got pregnant with twins, laid off and ended up on the system. She now wants to go back and complete her two year degree that she is half done with and can’t. Minnesota says that if you want free healthcare for your kids or food stamps you have to work or be looking for work 35 hours a week . They would rather pay the daycare etc for someone to work a minimum wage job for the rest of their lives and paying out a ton of benefits than have somebody get enough education to be self sufficient. Childcare for infants ranges between 100 and 200 dollars per week per child,. They will pay that and have somebody work a minimum wage job than let them go to school and have a better life for their children. You can only keep you medical if you work 32 hr and go to school and take care of your children. Does this really make any sense. The Pell grant now doesn’t even totally cover the cost of tuition. let alone have anything left over to pay for medical for the kids. If the father was living up to his court ordered medical responsibility she would be ok. But 29 yr old father works for his dad and hides his income. We need to start helping moms get ahead and not stay on the system forever. I can say this because when I got divorced I was on the system for three years. Long enough to get my degree and never go back. Why have the rules changed. If the Minnesota governor only had a brain.