In 2022–23, California implemented a universal financial aid application policy in hopes of improving college affordability. The policy requires school districts to ensure that all high school seniors complete a financial aid application or formally opt out. Last week, PPIC researcher Rachel Yang Zhou discussed findings from a new report examining changes in college enrollment and access to financial aid during the first year of implementation.
California faces growing demand for college-educated workers, but high college costs are a major concern for families. Expanding access to financial aid is essential to address these issues, said Zhou. In addition to reducing costs for students, financial aid boosts college enrollment, degree completion, and economic mobility.
Historically, only about half of California’s high school seniors completed a financial aid application—either the Free Application for Federal Student Aid (FAFSA) or the California Dream Act Application (CADAA).
After the first year of the policy, FAFSA completions rose sharply from 52% to 62%, representing nearly 42,000 additional applicants statewide. This translated into greater eligibility for aid among high school seniors (up 7 percentage points for the federal Pell Grant; up 4 points for the Cal Grant).
Overall, the policy contributed to an increase of about 1,500 additional students enrolling in college, or a 0.3 percentage point uptick in the college-going rate. While this is a modest increase, the policy “had a real, positive impact on college enrollment,” said Zhou, who added that this effect may grow over time as the policy becomes more established.
In addition to supporting college enrollment, the policy improved access to aid for those who would have enrolled in college regardless. The share of seniors enrolling in college with a completed FAFSA went up from 42% to 48%, and these gains were broadly distributed across counties. Historically underrepresented student groups, including low-income students, saw greater growth in college enrollment with a completed FAFSA.
Looking at students’ college choices, the researchers found a small but notable increase in the share attending in-state public institutions, which may have been “driven by more favorable aid packages, lower costs, and increased awareness of affordability at these institutions,” said Zhou.
Zhou concluded that California’s financial aid application policy is “a promising way to boost both college enrollment and financial aid uptake.” However, non-financial barriers—such as inadequate academic preparation and uncertainty about the enrollment process—continue to limit students’ choices after high school. She emphasized that addressing these obstacles would help more students enroll and succeed in college.
