Remove Barriers to College

This weekend I read a fascinating new paper about the impact of providing a simplified approach to financial aid for prospective college students.

The results are startling: high school seniors who were provided a modest amount of help in filling out the forms were almost 30 percent more likely to attend college and receive a Pell Grant the next year than a statistically comparable control group.  The paper underscores two key themes we are promoting at OMB: the crucial role of behavioral economics (which often highlights the benefits from making things easy and simple) and the use of rigorous analysis (in this case, the study relies on random assignment).

In particular, during tax season, H&R Block professionals offered help in completing student financial aid applications to a group of low and moderate income clients.  One set of clients was assisted by their tax professional through the process of completing the Free Application for Federal Student Aid (FAFSA).  Data already provided in their tax forms was automatically pulled into the form, and the tax specialist walked clients through a series of questions to complete the rest of the form.  Families were immediately given an estimate of possible federal aid and cost information on four local post-secondary options.  If the clients approved, H&R block then electronically submitted the completed FAFSA on their behalf.  The result was a 40 percent increase in FAFSA submission rates, and a 29 percent increase in college attendance rates the next year (see chart below).   

Increases in FAFSA Submission and College Enrollment Resulting From the H&R BlockFAFSA Experiment

These outcomes are very impressive, and point to the deleterious effects associated with the complexity of the current application process.  The FAFSA is more than four times longer than the 1040 EZ tax form, includes 153 questions, and requires applicants to report detailed information about income and assets, much of which is difficult to understand and pull together, and often has little ultimate bearing on eligibility for aid. As this study demonstrates, small differences in application procedures can make a difference in program participation.

The Administration is already taking several steps to remove barriers from the FAFSA application process. These include the use of a shorter, simplified form as well as enabling online users to automatically transfer data previously supplied electronically in their tax forms directly into their FAFSA application. Congress is considering the Administration’s proposal to simplify aid eligibility requirements.  This research underscores the benefits of these types of reforms -- and how important it is to remove barriers to college entry.

Your Federal Tax Receipt