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FINANCIAL AID

Increasing College Enrollment among Low- and Moderate-Income Families: An Intervention to Improve Information and Access to Financial Aid

Higher education plays an increasingly important role in helping individuals attain social and economic success. Yet, despite decades of financial aid policy, substantial gaps in college access remain by income level and race. One major impediment to increasing college enrollment among low-income students is the lack of information about financial aid. In particular, few families appear to know about the types of aid available, and the federal application process for financial aid is so complex that it may actually impede student access. The Commission on the Future of Higher Education, assembled by Secretary of Education Spellings, recently concluded that some students "don't enter college because of inadequate information and rising costs, combined with a confusing financial aid system." The Commission further emphasized that "our financial aid system is confusing, complex, inefficient, [and] duplicative" (2006). Perhaps due to the complexity of the system and the lack of information about the availability of aid, the American Council on Education found that 850,000 students who would have been eligible for federal financial aid in 2000 did not complete the necessary forms to receive such aid (2004). The FAFSA also serves as the basis to award most state and institutional need-based aid, and so it is a critical gatekeeper to most college financial assistance.

This study, conducted by Stanford University Associate Professor Eric Bettinger, Harvard Graduate School of Education Professor Bridget Terry Long, and University of Toronto Associate Professor Philip Oreopoulos, tracked nearly 17,000 low-income individuals and determined that cumbersome financial aid forms and lack of information about higher education costs and financial aid prevented access to higher education.

At H&R Block offices during the 2008 tax season, the researchers invited individuals aged 17 to 30, who earned less than $45,000 annually in Ohio and North Carolina, to participate and randomly assigned them to one of three groups. For one group of participants, employees helped fill out the 102-question Free Application for Federal Student Aid (FAFSA) that serves as the critical application and gatekeeper for federal aid, as well as most state and institutional aid.

In order to streamline the process, the researchers pre-populated the application with already collected tax information and then helped participants answer remaining questions. This significantly reduced the FAFSA form completion time from 13 hours to less than 10 minutes. Participants were also given personalized information about their financial aid options. Following the application process, the researchers tracked the progress of participants who were given aid information alongside those participants who did not receive help to determine whether streamlining the application process and providing information increased college enrollment.

Making college aid applications almost effortless to complete had an extremely powerful impact on the number of low-income students who made it to college. For high school seniors, just helping their parents fill out the financial aid form and apply increasedcollege enrollment rates by 30 percent.

Other program outcomes included:
  • The program increased college enrollment by 20 percent for young adults already out of high school with particularly large results for those with annual incomes less than $22,000.
  • The program increased the percentage who received a federal grant by 33 percent for high school seniors with positive effects also for older adults.
  • The program increased FAFSA submissions by 39 percent for seniors in high school; 186 percent for independent students who had never been to college; and 58 percent for independent students who had previously attended college.
  • The program also resulted in FAFSA applications being filed significantly earlier than those in the control group: over one month earlier for high school students and almost three months earlier for independent students. This allowed students to maximize their state and institutional financial aid awards in additional to federal aid.
On the other hand, the researchers said that participants who were only given information about aid (without help with the FAFSA) did not have higher aid application submission rates than those who did not receive any help.

Funders:


Bill and Melinda Gates Foundation
National Science Foundation (NSF)
Kauffman Foundation
National Center for Postsecondary Research (NCPR) with support from the Institute of Education Sciences (IES)

Key Personnel:


Eric P. Bettinger, Ph.D., Case Western Reserve University and NBER / bettinger@cwru.edu
Bridget Terry Long, Ph.D., Harvard Graduate School of Education and NBER / longbr@gse.harvard.edu
Philip Oreopoulos, Ph.D., University of Toronto and NBER / oreo@economics.utoronto.ca

More Information (PDF): Detailed Project Description | FAQs & Key Personnel | Study Results Press Release


ASSOCIATED PUBLICATIONS:

The Role of Simplification and Information in College Decisions: Results and Implications from the H&R Block FAFSA Experiment (An NCPR Working Paper) -- By: Eric P. Bettinger, Bridget Terry Long, Philip Oreopoulos, & Lisa Sanbonmatsu (September 2009).
 
Growing concerns about low awareness and take-up rates for government support programs like college financial aid have spurred calls to simplify the application process and enhance visibility. This project examines the effects of two experimental treatments designed to test of the importance of simplification and information using a random assignment research design. H&R Block tax professionals helped low- to moderate-income families complete the FAFSA, the federal application for financial aid. Families were then given an estimate of their eligibility for government aid as well as information about local postsecondary options. A second randomly-chosen group of individuals received only personalized aid eligibility information but did not receive help completing the FAFSA. Comparing the outcomes of participants in the treatment groups to a control group using multiple sources of administrative data, the analysis suggests that individuals who received assistance with the FAFSA and information about aid were substantially more likely to submit the aid application, enroll in college the following fall, and receive more financial aid. These results suggest that simplification and providing information could be effective ways to improve college access. However, only providing aid eligibility information without also giving assistance with the form had no significant effect on FAFSA submission rates. Download the PDF

Note: A revised version of a similar NBER Working Paper was released in June 2010.


What Is Known About the Impact of Financial Aid? Implications for Policy (An NCPR Working Paper) -- By: Bridget Terry Long (April 2008).

Years of research support the notion that financial aid can influence students’ postsecondary decisions, but questions remain about the best ways to design and implement such programs and policies. This paper serves as a discussion of the research literature on the effectiveness of financial aid with special attention to its implications for policy. As such, the goal of this paper is to address issues central to today’s debates about how to improve college access and affordability while encouraging researchers to continue to advance the line of inquiry. Download the PDF


OTHER PUBLICATIONS OF INTEREST:

Breaking the Affordability Barrier: How Much of the College Access Problem is Attributable to Lack of Information About Financial Aid? -- By: Bridget Terry Long (December 2009), National CrossTalk.

According to Bridget Terry Long, the author of this article, if students are unaware of the financial resources available to them or the best way to prepare academically for college, then the aforementioned barriers of cost and academic preparation will be made worse by misperceptions, further limiting students. Read the Article.