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For Immediate Release
Kellee Edmonds
American Council on Education
(202) 939-9368
kellee_edmonds@ace.nche.edu

Millions of Undergraduates Miss Out On Financial Aid Because They Fail to Apply, American Council on Education Analysis Finds

(Washington, DC—Oct. 11, 2004) Half of all undergraduates—or approximately 8 million students—in 1999-2000 who attended a college or university that participated in federal student aid programs failed to apply for financial aid. That’s one of several significant findings in a newly released issue brief by the American Council on Education (ACE).

Missed Opportunities: Students Who Do Not Apply for Financial Aid is the work of ACE’s Center for Policy Analysis. Jacqueline E. King, the center’s director, is the author. The brief analyzes data from the National Postsecondary Student Aid Study: 1999-2000, the latest available data on this subject produced by the Department of Education’s National Center for Education Statistics.

The ACE issue brief examines the rates at which undergraduates (graduate and professional students were not considered) failed to complete a Free Application for Federal Student Aid (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 (http://www.fafsa.ed.gov/) is the standard application used by the federal government, states and most colleges and universities to award financial aid.

Additional key findings:

• Large proportions of low-income and full-time students did not complete a FAFSA. As a result, 20 percent of non-filers—or approximately 1.7 million students—came from low- and moderate-income families. One-third of non-applicants were full-time students.
• Approximately 850,000 students—or half of the 1.7 million low- and moderate-income students who did not file a FAFSA—were likely to have been eligible for a Pell Grant.
• The majority (55 percent) who filed a FAFSA for the 1999-2000 academic year did so after important deadlines had passed, decreasing their chances of receiving state and institutional aid.
• Very few of the non-filers received aid from a source that didn’t require the FAFSA application—such as employer assistance, institutional non-need based aid and private grants and loans.

Student behavior varied by institution type, the ACE issue brief shows that two-thirds (67 percent) of the students attending community colleges did not complete a FAFSA in 1999-2000, while 42 percent of those attending four-year public institutions, and 33 percent of those at private not-for profit colleges and universities failed to fill out a FAFSA. By comparison, only 13 percent of students at private for-profit institutions failed to apply for financial aid.

“As someone who has spent his entire life in higher education, I must say I am dismayed by these findings,” said ACE President David Ward. “It is deeply troubling to think that almost two million low- and moderate-income students may have missed the opportunity to receive needed assistance simply because they failed to fill out a federal form that is available on the Internet and in almost any high school or college financial aid office.

“We all share some blame for this problem—colleges, high schools, parents, policy makers, and opinion leaders,” Ward continued. “We must redouble our efforts to educate students and their families about this process and simplify what increasingly seems to be a Byzantine system. If ever there was a time to advertise the availability of student aid, that time is now.”

A survey of students conducted by the Department of Education in 1995-96 found that the reasons why students passed on the opportunity to complete a FAFSA ranged from missing application deadlines (9 percent) to believing they or their families could pay for their college education (41 percent).

“Understanding who does not apply for financial aid and why is essential to the success of any financial aid program,” stated King. “This issue brief clearly illustrates that financial aid remained an untapped resource for millions of students who could have significantly benefited from it.”

“These missed opportunities can have tremendous consequences for students who may be struggling to meet their college expenses,” King added. “Vital assistance is available and no student should pass on the opportunity to receive that aid because he or she is misinformed, lacks the necessary information or is unable to navigate through the financial aid process.”

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

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Founded in 1918, ACE is the nation’s largest higher education association, representing more than 1,600 college and university presidents, and more than 200 related associations, nationwide. It seeks to provide leadership and a unifying voice on key higher education issues and influence public policy through advocacy, research, and program initiatives.