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California Sees Steep Decline in Financial Aid Applications

Kevin Cook March 12, 2021
photo - Students walking on UCLA Campus

The deadline to complete financial aid applications for fall 2021 passed last week, and preliminary data suggest that many California high school graduates may miss out on funding that helps provide access to college. Financial aid applications especially important for supporting college enrollment among low-income and other underrepresented students, including African Americans and Latinos. While the COVID-19 pandemic has likely contributed to the recent decline in financial aid applications, policy action at the state and federal levels could help boost applications in the near future.

In the 2020–21 academic year, only 38.6% of California’s high school seniors completed the Free Application for Federal Student Aid (FAFSA), about a 10 percentage point drop from the previous year. This drop is similar to the nationwide decline in FAFSA completion but notably bigger than declines in other populous states. Recent research shows that declines in application rates since last year have occurred largely among first-time freshmen, raising concerns that the pandemic has created additional barriers to accessing the financial aid necessary to make the critical transition from high school to college.

figure - California Saw Larger Declines in FAFSA Applications than Other Large States

Increasing FAFSA completion rates has long been a focus of policymakers, educational institutions, and advocacy organizations. And change is on the horizon. The most recent federal omnibus spending bill will simplify the FAFSA application process for most students beginning in the 2023–24 academic year. It will also expand eligibility and reduce the length of the application, from 108 questions to 36.

Additionally, Governor Newsom’s most recent budget proposes that local education agencies—school districts, county offices of education, and charter schools—ensure that all their high school seniors have either submitted the FAFSA (or the state equivalent for undocumented students) or have opted out of doing so. This proposal stops short, however, of making FAFSA completion a prerequisite for high school graduation, which states like Louisiana, Texas, and Illinois have done over the past two years.

Distance learning during the pandemic has forced student advising and college counseling services online—making it more difficult for students to receive essential guidance when navigating the complex college application process. This is particularly concerning for low-income students who are less likely to have internet access at home. As California emerges from the pandemic, reducing barriers to accessing financial aid will be critical to ensuring that all Californians have the opportunity to earn and benefit from a college degree.

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