18 Jan When Perception Equals Reality, Low-Income Students Can Miss Out on Opportunities

by Shannon Cross – Student Connections, a USA Funds company

Over the past few months, I’ve been speaking with many colleagues about the nonacademic barriers to student success, and I often reference the 2016 FAFSA completion data. Of particular interest is the fact that the national FAFSA completion rate for high school seniors fell from 40.9 percent to 39.6 percent and that only five states – Oregon, West Virginia, Utah, North Carolina and Texas saw an increase in completion.

Low-income students’ misconceptions about financial aid In October 2016, the National College Access Network (NCAN) released a report that examined the mindset of low-income students about their financial aid eligibility. It identifies some of the reasons that rate may be low, particularly for this population of students. The report begins by noting a 2011-12 National Postsecondary Student Aid Survey. The survey asked students to indicate why they hadn’t applied for aid, and 44.7 percent said it was because they did not believe they were eligible. But what is this belief based on?

The report goes on to explore current attitudes and behaviors toward financial aid among low-income students. It concludes that the belief that they are ineligible for aid often masks a troubling reality: they do not know whether or not they are eligible. These students are less likely to pursue aid opportunities. Because these findings have major implications for students and schools, they should help schools shape outreach strategies.

Getting resources to the students who need them This is confirmed elsewhere in the study, where data show that, despite an abundance of information about student aid, the knowledge is not reaching the students who most need it. For example, 64 percent of the students who did not apply for aid reported they had no information about aid or had mistaken notions about it (for example, believing food stamps were a type of financial aid). Think about that: More than half of those who don’t apply for aid don’t understand what it is. Whether or not they are eligible becomes unfortunately irrelevant until we address that knowledge gap.

Further findings in the report identified a stark contrast in awareness of important issues between students who apply for aid and those who don’t. For example, 55 percent of students who didn’t apply believed that grants must be repaid, while only 12 percent of those who did apply held that belief. 32 percent of students who didn’t apply believed government loans were the same as private loans, whereas only 13 percent of students who applied believed that.

But what I found most telling among these statistics relates to this statement: “There are plenty of people I can ask about financial aid at my school.” 73 percent of students who applied for aid agreed with it, compared to only 34 percent of those who did not pursue aid. This is a staggering split between the two groups, and it underscores the importance of institutions raising awareness about financial literacy and other student engagement resources.

Although the sample size was small, this study does shed some light on why students may feel they are not eligible and do not apply. Particularly with the low national completion rate for all students, we need to focus more on getting the message out to those who need it. Students feel overwhelmed about the process to the point they are not connecting with the information that is out there. Institutions can address this with thoughtful engagement with students throughout the matriculation process and through college completion.