College Attainment and Future Success Begins with Improved Financial Aid
For individuals from all walks of life, higher education is the key to a future of opportunity and success. It is increasingly rare to find well-paying jobs that do not require some sort of education or training beyond high school. Degrees and professional certificates are key drivers of economic opportunity and mobility. Why, then, do only 45 percent of working-age Americans have a postsecondary degree or certificate?
For many students and families, the simple answer is cost. The price of higher education can be prohibitive and the process of applying for financial aid is often daunting. The president’s proposed budget has turned the spotlight on reforming financial aid; as the public conversation continues, we must ensure that any reform efforts are designed with equity in mind. First and foremost, let’s help more families from all backgrounds and zip codes access the vital financial aid that can make higher education a reality and increase attainment nationwide.
In particular, the cost of higher education is a major barrier for low-income and first-generation students, who participate in higher education in lower numbers than their more affluent peers or individuals from college-going families.
To help more young people overcome this barrier, we must improve financial aid programs and policies, both at the federal and state levels. This includes finding ways to make existing programs work better for students by making it easier for young people and their families to access—and, importantly, understand—the financial aid that is critical to this effort. It also involves renewed investment in need-based grant aid (particularly as opposed to loan-based aid) designed to help low-income and first-generation students access—and persist in—college.
At the federal level, there are three ways we can improve access to financial aid: 1) simplifying and increasing resources available to students and families about the Free Application for Federal Student Aid, or FAFSA; 2) implementing policy solutions to improve federal financial aid programs, including Pell Grants; and 3) developing more student-centered student loan processes.
FAFSA is the gateway to financial aid that can make higher education a distinct—and affordable—possibility for more young people, and it is essential to make it easier for students to complete the form. Reducing the number of questions low-income students need to complete to simply re-prove that they have high financial need and simplifying the process overall—particularly for those who may not have experience with higher education—is paramount. We must also educate students and families better and earlier—as early as middle school—about all available financial aid options.
Importantly, the need-based Pell Grant program should be continually adjusted to keep up with inflation, and students should have year-round access to Pell Grant funds to help them graduate faster and with less debt.
Additionally, with 70 percent of college graduates incurring student loans—including 27 percent of students at two-year colleges—we must put students at the center of loan repayment options. This includes streamlining and modernizing loan services, developing progressive financing options, and clarifying the details of how student loans work—and how they differ from other forms of financial aid. Is it reasonable that some federal student loan servicers still unnecessarily require student borrowers to print and mail paperwork that facilitates a change in their repayment schedules, when every major bank can do this electronically?
States also play a critical role in making higher education financially feasible; however, not all states have robust financial aid programs that support goals of increasing postsecondary attainment. In my home state of Arizona, for example, the average need-based grant aid per full-time undergraduate student was less than $50—compared to the national average of $500. In addition, our largest community colleges receive no funding from the state. State policymakers in Arizona need to develop and sustain a substantial need-based grant aid program that provides funding opportunities for low-income students that align with state needs. This represents an investment in the future of Arizona and the success of its residents and economy.
Increased college attainment leads to greater economic opportunity and makes the American dream a reality for more Americans. Relatively small improvements to financial aid programs and processes can make a big difference for the next generation. Without such improvements, individual states, and the U.S. as a whole, can—and will—be outpaced economically by others that prioritize higher education funding.
Rich Nickel is the President and CEO of College Success Arizona, where he leads the organization toward its goal of assisting all Arizonans in gaining access to and successfully attaining a postsecondary credential.