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Weeks 8 & 9: Financial Aid and Scholarships

May 11, 2021

Welcome back everyone! I’ve been busy with APs, so I haven’t had much of a chance to update you all on my project.

Throughout my research, I have always thought about the best way to improve college social mobility. Would it be best to make college free, significantly reduce the price, expand scholarships, improve financial aid, etc.? I thought financial aid/scholarships would be the easiest ones to tackle, because there is a clear process one has to go through to be eligible.

Let’s start with federal financial aid. This is rather simple; you fill out the FAFSA and wait until you receive your financial aid. But it actually isn’t this simple. I read an article on CNBC, which detailed Bill Gates’ problems with the FAFSA. For starters, why is the FAFSA 180 questions long, which is more than triple the length of a typical federal income tax form? For a busy family, it’s hard to complete this without having any concerns. As a result of this, about two-thirds of low-income high school seniors don’t even apply. According to NerdWallet, 49% of all high school graduates were eligible for a Penn Grant, but only 36% of seniors filled out the FAFSA. So, while the government offers more than $120 billion in student aid, the 2017 high school graduating class missed out on $2.3 billion of it by not applying. An easy solution to this is to make the FAFSA available online, reduce the number of questions, and have data already stored by the IRS implemented into the forms so students don’t have to search around for all the necessary tax forms.

Now let’s talk about scholarships. This is different from federal aid, because scholarships are generally rewarded based on merit and academic standing. Low-income students who receive scholarships are more likely to stay in school because they don’t have to worry about the tuition.  I attached a graph below of the results of a study done in Nebraska, which showed that students granted financial aid are much more likely to enroll in college for all four years.

National Bureau of Economic Research. P.S: Financial Aid here is actually a full-ride scholarship. 

 

The main problem is really with access. I talked about in my previous blogs how important it was for representatives of colleges to visit high schools and talk to the students about the benefits of their college so students get a better understanding of the options they have. A similar approach needs to be done with scholarships and financial aid. Questbridge is one of the best scholarship programs for low-income students, and hopefully more students will start to learn about it. On top of this, there are hundreds of little scholarships that exist out there, but just signing up for a couple can get you a lot of money. It’s important that we educate low-income students about the opportunities they have, and especially that they will be able to attend university without having to worry about payments.

College’s need to do their part as well. According to ScholarshipAmerica.org, The National College Access Network (NCAN) created a model that would track the affordability of four-year public institutions. Unfortunately, the average Pell Grant recipient in their model would be able to afford just 139 of 551 residential four-year public institutions across the United States.

I will continue to work on my deliverable and finish up my research on the finance side of college mobility. See y’all next week!

Sources:

https://www.cnbc.com/2018/05/04/bill-gates-the-american-financial-aid-system-is-failing-students.html

https://scholarshipamerica.org/blog/why-scholarships-are-vital-for-low-income-students-and-families/

https://www.nber.org/digest-202101/effects-college-merit-scholarships-low-income-students

2 Replies to “Weeks 8 & 9: Financial Aid and Scholarships”

  1. Milan M. says:

    I can’t believe 2.3 billion dollars worth of aid didn’t go out to students in need. The government has to make access easier for low-income families. When we subscribe to the college board and different college networking sites, we get tons of emails on many potential scholarships. But, most of us read past them, because they just aren’t clear enough. How can the college board and other sites like Niche become more user-friendly, so that more students who need aid, can get the aid that they deserve.

    1. Neel D. says:

      Many people tend to skip over the scholarships they present because they don’t know how long it will take to apply, if you even have to apply, and possibly because they don’t provide “that much” aid. I actually think Common/Coalition App can work closely with College Board and companies like Niche to incorporate those scholarship opportunities into the actual application. Perhaps this would further incentivize students to apply for aid/scholarships.

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