FAFSA tool suspension could affect low-income student enrollment, researcher says

When the Department of Education suspended a critical tool on the Free Application for Federal Student Aid (FAFSA) in March, many predicted that the added difficulty might cause serious repercussions, especially among first-generation and low-income students.

Now, new research from the Massachusetts Institute of Technology-based economic research center, J-PAL North America, lends further validity to these predictions. J-PAL's research suggests that without the Data Retrieval Tool, low-income student enrollment may substantially decline.

The Data Retrieval Tool was a portion of the FAFSA that enabled applicants to import their prior tax data directly from the Internal Revenue Service (IRS) so that they would not have to compile old tax return papers on their own—this can take several weeks if they need to order copies from the IRS.

At the beginning of March, the Department of Education disabled the tool indefinitely, citing a security breach. The Department of Education has since announced that the tool will remain suspended until fall 2017.

Concerned about the effects this suspension will have on prospective students, J-PAL collaborated with H&R Block to conduct a study in which they offered a software program to low-income, college-eligible families in Ohio and North Carolina.

The software program was meant to simplify the FAFSA by auto-populating it with tax return data—a function similar to that of the suspended Data Retrieval Tool. The applicants using the software could finalize their documents in roughly eight minutes.

Among the financially dependent students whose parents were offered the J-PAL software:

  • College enrollment increased by 24%; and
  • Pell Grant receipts increased by 36%.

    Among the financially independent students who used the software:

  • College enrollment increased by 16%;
  • Pell Grant receipts increased by 27%; and
  • Applicants were 29% more likely to have completed at least two years of college three years later.

According to Quentin Palfrey, executive director of J-PAL, only 7% of low-income young people earn four-year degrees by the time they turn 26, compared with 51% of young people from higher-income families.

Palfrey writes that "removing access to the Data Retrieval Tool could substantially drive down college enrollment among low-income students."

Palfrey argues that simplifying the FAFSA process "can make the difference between whether students go to college or end their formal education." This difference, he argues, could ultimately help close the inequality gap in higher education (Palfrey, Hechinger Report, 5/11).

Nudge incoming students to complete their FAFSA—and everything else they need to do

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