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Simplifying Financial-Aid Process Improves College Access, Study Finds

By  Beckie Supiano
September 23, 2009

Helping low- to moderate-income families fill out the Free Application for Federal Student Aid and understand their student-aid eligibility increased the rate at which they filed the form, attended college, and received need-based aid, according to a report released Wednesday.

The report, “The Role of Simplification and Information in College Decisions: Results from the H&R Block Fafsa Experiment,” tries to quantify the effects of simplifying the financial-aid process and providing families with personalized aid information. The report is based on a study conducted by researchers from Harvard Graduate School of Education, Stanford University School of Education, the University of Toronto, and the National Bureau of Economic Research.

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Helping low- to moderate-income families fill out the Free Application for Federal Student Aid and understand their student-aid eligibility increased the rate at which they filed the form, attended college, and received need-based aid, according to a report released Wednesday.

The report, “The Role of Simplification and Information in College Decisions: Results from the H&R Block Fafsa Experiment,” tries to quantify the effects of simplifying the financial-aid process and providing families with personalized aid information. The report is based on a study conducted by researchers from Harvard Graduate School of Education, Stanford University School of Education, the University of Toronto, and the National Bureau of Economic Research.

The researchers conducted a randomized field experiment in partnership with H&R Block, the tax-preparation company, in most of Ohio and the Charlotte, N.C., area during the 2008 tax season. The researchers developed software to screen for families with an income of less than $45,000 and a family member between the ages of 17 and 30 who did not already have a bachelor’s degree. After families completed their tax returns and agreed to participate, they were randomly assigned to one of three experiment groups.

A Bonus at Filing Time

Members of the first group received help completing the Fafsa. The software used information from participants’ tax returns to fill in part of the Fafsa, and then guided the tax professional through a series of questions participants needed to answer to finish it—a process that took less than 10 minutes. Members of the first group also had the option of having the form submitted for them, and were given personalized financial-aid estimates and information on tuition costs at four area public colleges.

Those in the second group were given that personalized information and were encouraged to complete the Fafsa, but were not helped with the form. The third group was a control, and its members were given only a brochure about the importance of higher education and general college and financial-aid information. Nearly 17,000 individuals participated in the experiment.

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The researchers used data from the U.S. Department of Education and the National Student Clearinghouse to track whether participants applied for financial aid, enrolled in college, and received financial aid.

In the study, 55.9 percent of dependent students who received help on the Fafsa submitted the form, compared with 40.2 percent in the control group. Among independent students without prior college experience, 39.5 percent of those who were helped with the FAFSA filed it, compared with only 13.8 percent of those in the control group.

Among independent students who had previously attended college and were helped with the Fafsa, 55.7 percent filed the form, compared with 35.3 percent in the control group. Even with all of this help, many participants did not file a Fafsa.

Some participants may not have had any interest in attending college, said Bridget Terry Long, a professor of education and economics at Harvard Graduate School of Education and one of the authors of the report. Feedback from the tax professionals who administered the experiment also suggests that some families are wary of submitting a federal form they do not completely understand.

Direct Help Made the Difference

Giving participants personalized information, but no help on the form, did not have a significant effect on their rate of filing, a finding that surprised the researchers. Ms. Long had expected that more of those students would apply, thinking that “if you tell someone there’s $4,000 waiting for you, you’d do the paperwork.” She believes this finding highlights that the financial-aid form is complicated, confusing, and time-consuming. Nearly 27 percent of dependent students in the control group enrolled in college during the fall following the experiment, while 34.5 percent of those who were helped with the FAFSA enrolled.

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About 2.9 percent of independent students without prior college experience who were in the control group enrolled that fall, compared with 3.5 percent of those helped on the financial-aid form. The 2.9-percent college-attendance rate for that group probably underestimates its true college-going rate, the researchers said. Information from the Education Department showed 9.6 percent of participants in that group received some form of financial aid—a discrepancy that suggests that some students attended colleges that do not participate in the National Student Clearinghouse. The researchers also found participants in that group were more likely to send Fafsa information to colleges that do not participate in the clearinghouse.

No significant difference in the college-enrollment rate was found between independent students with some college experience who were helped with the Fafsa (24.3 percent) and those in the control group (23.7 percent).

The researchers also found that the dependent students who were helped on the Fafsa were more likely to receive financial aid. About 29.8 percent of dependent students in the control group received a Pell Grant, compared with 39.6 percent of those who were helped with the form. Among independent students without prior college, 9.6 percent in the control group received a Pell Grant, compared with 11.5 percent who were helped with their form. And among independent students with previous college experience, 23.3 percent in the control group received a Pell Grant, compared with 26.4 percent who were helped with the form. Because independent students in the group that received help with their Fafsa received more aid, but were no more likely to attend college, it’s apparent that some members of this group were already attending college without the help of financial aid.

While it is clear that providing information did not have the same effect on Fafsa submission as providing help with the form, the researchers note that they tested providing information to students only at the end of high school or later. So the experiment does not capture the potential impact of providing that information to younger students.

The experiment showed that the most effective intervention combined both simplification and assistance. The researchers conclude that the complexity of the Fafsa and the time required to complete it are substantial barriers, and suggest that shortening the form would probably increase Fafsa submissions. A planned pilot project in which some students will be able to use tax data from the IRS to fill out the Fafsa is a step in the right direction, Ms. Long said. And if tax information can be imported into the Fafsa, she said, “some simplification is easily within our reach.”

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We welcome your thoughts and questions about this article. Please email the editors or submit a letter for publication.
Admissions & Enrollment
Beckie Supiano
Beckie Supiano writes about teaching, learning, and the human interactions that shape them. Follow her on Twitter @becksup, or drop her a line at beckie.supiano@chronicle.com.
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