Fewer Families Apply for College Aid, Survey Shows

Confused frustrated man reading letter in cafe, receiving bad news.
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Last year only 68% of families applied for federal aid for college, the smallest share in 14 years of data, according to new survey findings showing many students and their families continue to assume they’re not eligible.

Key Takeaways

  • Only 68% of families applied for federal college aid last year—the fewest in at least 14 years—a new survey found.
  • The most common reason respondents cited for not completing the Free Application for Federal Student Aid, or FAFSA, was the perception that they wouldn’t qualify for aid.
  • The Education Department has acknowledged that potential barriers exist in the current application process, announcing last week it would temporarily make changes to encourage more students from low-income families to apply.

Survey results collected this spring and released Tuesday by student lender Sallie Mae and research firm Ipsos show the percentage of parents and students who said they completed the Free Application for Federal Student Aid, known as the FAFSA, for the 2020-21 academic year hasn’t been lower in the 14 years the survey has been done. It’s smaller than the 71% in 2019-20 and the 77% in 2018-19.

Sallie Mae said the reasons behind the downward trend in FAFSA applications need to be explored so that qualified students don’t miss out on aid. For years, the most common reason for not completing the application has been the perception that they wouldn’t qualify for financial aid, Sallie Mae said, and in the latest survey that was cited by 44% of those who didn’t apply.

Potential applicants also found the process too complicated, had a problem completing it, missed the deadline, or didn’t have the information required to complete it, according to the survey. Some people said they didn’t know about FAFSA.

Fewer Audits

Although statistics from the federal government show that the vast majority of undergraduate students receive some financial aid, the Education Department has acknowledged that potential barriers and confusion exist in the current application process. In an effort to encourage more students from low-income families to apply for aid, the department last week announced it would temporarily conduct fewer audits, which involve verifying income information for applicants who qualify for federal Pell Grants available to students with exceptional financial need.

Undergraduate enrollment rates fell 4.9% in the spring as a result of the pandemic, according to data from the National Student Clearinghouse, with steeper declines for students of color and those from low-income households.

The aid application rate was on track to decline again this year, according to an analysis by the National College Attainment Network completed before the Department of Education announced relaxed audit standards. As of July 2, there were 190,000 fewer applications for aid from graduating seniors—students seeking financial aid for the next academic year, 2021-2022—than there were on the same date in 2019. The greatest declines were at high schools with higher concentrations of students of color and students from low-income backgrounds.

The window for completing the 2021-22 FAFSA is still open—the deadline is June 30, 2022, which means that students can apply for federal aid retroactively. But many states and colleges have their own deadlines for aid that are much earlier.

For the Sallie Mae survey, Ipsos conducted online interviews with 985 parents and 1,000 undergraduate students between April 8 and May 4.

Have a question, comment, or story to share? You can reach Rob at ranthes@thebalance.com.