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Impact of Mandatory FAFSA Filing Policies

July 30, 2020
 
 

Mandatory Free Application for Federal Student Aid filing policies aren't a magical salve, but they can greatly increase the number of students who complete the financial aid form and enroll in college, according to a report.

The Century Foundation examined state policies that mandate FAFSA completion for high school students, as well as the outcomes of that policy in Louisiana, the only state so far that has fully enacted its policy.

The push for mandatory FAFSA policies is increasing, as it's a relatively cheap way for states to boost the financial aid their students receive. According to some estimates, low-income college students leave $2 billion or more in federal Pell Grant money on the table each year, the report states.

In Louisiana, public high school seniors are required to submit the FAFSA to graduate, or they can submit an opt-out waiver or receive a waiver from the state for extenuating circumstances. In Illinois, more of the onus is placed on schools. School districts are required to provide assistance to students or parents in completing the FAFSA, and to make a good faith effort with assisting them before providing an exemption to the requirement. In Texas, school counselors can waive students' requirement at their own discretion. But a new performance-based funding policy incentivizes schools to maximize the number of students who complete the form.

Previous research has shown that hands-on support for completing the FAFSA increases completion rates, and that even relatively small increases in financial aid can spur college enrollment.

While students can opt out and there is no requisite support system in place, Louisiana's policy still has been successful. The state's policy closed the gap in completed applications between high- and low-income school districts by 87 percent in one year. Within two years, the gap was completely closed.

The policy also increased FAFSA completion rates over all. Before it was enacted, just one in three public high schools had completion rates of at least 65 percent. After, four in five schools had completion rates of at least 65 percent.

School districts that serve more students of color also saw large gains. Completion in those districts increased by 25 percent, compared to 20 percent gains in the least diverse districts. However, the number of applications with incomplete information was higher in districts that have more low-income students and students of color.

"This new evidence from the country's first mandatory FAFSA policy is an encouraging sign for efforts to raise FAFSA completion among low-income students," Peter Granville, senior policy associate at the Century Foundation and author of the study, said in a news release. "While it is unlikely that this policy will be adopted in more states until after the pandemic subsides, this may be an effective tool -- when implemented well -- to close long-standing gaps in FAFSA completion over the long term."

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