As recent high school graduates prepare to head to college in the fall, increasing numbers stand to benefit from financial aid. New data suggests that a majority of this year’s graduates—58%—submitted an application for higher education funding, either through the Free Application for Federal Student Aid (FAFSA) or a California Dream Act Application (CADAA). This is an increase of more than 24,000 students (before the April 2 state priority financial aid deadline) compared to last year. Moreover, this number is likely to grow given that the application season for California Community College runs through September 2.

FAFSA and CADAA are the primary ways students access grants for higher education—and unlike loans, these grants do not need to be paid back. California now ranks fifth among all states in FAFSA submission rates, just behind Texas and just ahead of New York, after decades of sitting in the middle of the pack. This year’s improvement is critical in expanding access to higher education—and the benefits that come with it.

California’s implementation of a universal financial aid application policy has played a significant role in improved applicated rates. In 2021 the state passed a law that required all school districts in California to ensure that each of their graduating seniors completed a FAFSA, CADAA, or opt-out form. FAFSA/CADAA completion rates rose from 53% to 69% in the following school year, with increases concentrated among the lowest income students and students from groups historically underrepresented in higher education.

But the path to improvement hasn’t been smooth. In 2023, the US Department of Education introduced a new, simplified FAFSA that automatically populated the form with tax information from the IRS.  The roll out of this process was marred by delays and access challenges. The result: a drop in combined FAFSA and CADAA completions of 8.6 percentage points in California, a decline of more than 30,000 applications.

A key challenge was a new requirement to provide information on all financial contributors—parents, stepparents, or spouses—to a student’s college education. These contributors now have to provide identification information and acquire a related identification number. If any contributors do not have a social security number or have not filed taxes, the form is deemed incomplete or flagged for manual review, which can significantly delay processing.

In addition, while federal laws such as the Privacy Act and Federal Education Rights and Privacy Act (FERPA) are intended to protect personally identifiable information, concerns about sharing family information on FAFSA/CADAA pose additional challenges. This year, the California Student Aid Commission conducted extensive outreach and opened eligibility to the CADAA application for student from mixed-status families—those with at least one parent who is not a US citizen—to help allay concerns.

Going forward, continuing outreach efforts regarding financial aid programs and safeguarding access to them will be critical to ensuring that higher education remains a ladder for economic mobility in our state.