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More Than One Million Likely Pell-Grant Eligible Students Miss Out on Financial Aid

Total Aid Applications Up, But Low-Income Students Less Likely to Apply

Feb. 8, 2006

An updated analysis by the American Council on Education (ACE) finds that an estimated 1.5 million students who were likely eligible to receive Pell Grants in the 2003-04 academic year missed out on the assistance because they did not apply for financial aid. That figure is up significantly from 850,000 when ACE first examined the number of students who did not complete the aid application for the 1999-2000 academic year.  

Missed Opportunities Revisited: New Information on Students Who Do Not Apply for Financial Aid analyzes data from the National Postsecondary Student Aid Study (NPSAS) produced by the U.S. Department of Education’s National Center for Education Statistics.  ACE’s Center for Policy Analysis produced the issue brief. 

In 1999-2000, the number of students who completed the Free Application for Federal Student Aid (FAFSA) stood at 8.2 million (50 percent of all undergraduates). For the 2003-04 academic year, the number of FAFSA filers grew to 11.1 million (59 percent). Despite an increase in applications among the general student population, the number of low- and moderate-income undergraduates who did not apply, and therefore may have missed out on the opportunity to receive federal, state and institutional aid, increased from 1.7 million to 1.8 million.

The ACE issue brief examines the rates at which undergraduates (graduate and professional students were not considered) did not complete a FAFSA as well as select characteristics of those students in terms of dependency status, income, attendance status, and institution type. 

It also estimates the share of non-filers who may have been eligible for a Pell Grant.  The FAFSA is the standard application used by the federal government, states and most colleges and universities to award financial aid.

“While we are pleased to see more students from the general population apply for aid, it is disappointing that students who could benefit the most from financial aid are not making progress and are actually losing ground,” stated Jacqueline E. King, director of the Center for Policy Analysis and author of the issue brief.    “This is the time of year when financial aid applications are due and we want to encourage students and their families to complete the FAFSA.”  

Additional Findings from the ACE Analysis:

• In 2003-04, 28 percent of the lowest-income independent students did not file a FAFSA compared to 24 percent in 1999-2000.
• The largest increases in aid application rates were among half-time students, community college students and independent students.
• More than one-third of those who did not apply were full-time students.

The likelihood of applying for aid also varied significantly based on the type of institution students attended. ACE’s updated issue brief shows that 55 percent of students at community colleges did not apply for aid, while 37 percent of those attending public four-year institutions did not apply, and 27 percent of those at private not-for-profit four-year colleges and universities did not fill out a FAFSA. Thirteen percent of students at private for-profit institutions did not apply.  

The number of non-applicants who seem likely to be Pell-eligible grew so precipitously between 1999-2000 and 2003-04 for three reasons:

• An $800 increase in the maximum Pell Grant over this period allowed more students to quality for the program.
• Both college enrollments and the share of students filing a FAFSA increased during this time.
• Due to a larger sample size of the 2003-04 NPSAS, ACE used more refined estimation procedures.

Little new information is available on the reasons why students do not apply for aid.

Twenty-nine percent of students who did not file a FAFSA received aid from programs that did not require the application—such as employer assistance (13 percent), institutional non-need-based aid (6 percent), and private grants and loans (5 percent).   For some students, this aid may have eliminated the need for further assistance.  However, ACE’s analysis suggests that many students who received aid outside the FAFSA system could have benefited from additional assistance. 

“No student should miss the opportunity for vital assistance because he or she lacks necessary information,” said ACE President David Ward. “We all must intensify our efforts to educate parents, students, and those who counsel college-bound students that aid is available.”

King says one effort that responds to this need is College Goal Sunday, a national program sponsored by the National Association of Student Financial Aid Administrators and Lumina Foundation for Education. Events taking place in communities across the country this month will bring families together with campus aid administrators who can help them complete the FAFSA.  Further information is available at www.collegegoalsundayusa.org.

Missed Opportunities Revisited: New Information on Students Who Do Not Apply for Financial Aid is available as a PDF document on the ACE web site.