Options for Helping Low-Income Students in Higher Education

Jeremiah Thompson

By: Jeremiah Thompson

I recently had the opportunity to listen to a panel of experts discuss potential ideas to aide low-income students attending (or aspiring to attend) higher education institutions.

 Susan Dynarski, a professor with the Ford School of Public Policy and the School of Education, proposed simplifying the FAFSA. She cited studies showing that paperwork, or in this case an online application, can often be a deterrent for low-income families to receiving financial aid or realizing their eligibility for those programs.

Kevin Stange, a professor with the Ford School of Public Policy, talked about “choice architecture” and that sometimes consumers, or students, do not make the best choices when offered many options. He referenced Guttman Community College, part of the CUNY system in New York. Guttman has developed a plan that limits the choices of its students – there are a limited number of majors, the core courses are the same for everyone, students must be fulltime their first year, and there are a number of other designs that limit the ‘choices’ that students get to make. Guttman graduated its inaugural class and tentatively shows a higher graduation and retention rate than the CUNY system as a whole. The differences are not dramatic, but enough to warrant continued attention and study.

Ajita Talwalker Menon, Senior Policy Advisor for Higher Education with the White House, discussed the Obama Administration’s efforts, particularly the recent Gainful Employment Rules. Gainful Employment is targeted at short vocational programs, many that are run by for-profit colleges. Gainful Employment, while meeting much resistance from the for-profit sector, would cut Title IV funding for schools whose students cannot pay back their loans at a certain threshold – i.e., if a student is using more than 12% of her disposable income, then that student has not reached ‘Gainful Employment’ standards. If enough students at one institution fail to meet these standards, then the Title IV funding is cut.

Libby Nelson, an Education Report with Vox Media, talked about the regressive nature of tax credits for higher education. She also argued that tax credits should be far more predictable and refundable. If families had a better idea of how much their credit might be, or if they could receive a refund sooner than in the current system, families could better plan for their educational expenses.

I found particularly interesting the idea of simplifying the FAFSA. I previously worked with many low-income families and can attest, anecdotally, that paperwork often is a barrier for these groups. I worked through the FAFSA with many families who found the form intimidating and were grateful to have someone aid them through that process. These same families often do not realize how much financial aid may potentially be available to them. Many students think that college is too expensive and out of reach – if it were easier to get information to families, they might be able to make more informed decisions and sooner.

That said, for students considering colleges with more selective admissions, many colleges (including the University of Michigan) require the much more onerous CSS Profile. This application asks for significantly more information than the FAFSA, and in my experience, this can also be a barrier, more so than the FAFSA.

Would colleges be willing to forego the CSS Profile or to simplify the form, for low-income families at a certain threshold? Unfortunately, our session did not allow for many questions, but I’m sure Professor Dynarski has some thoughts about the CSS Profile as well.