Report: State Financial Aid Programs Show Varying Levels of Accessibility and Equity

State financial aid programs across the country have varying levels of accessibility for students and plenty of room to improve, according to a recent report from The Education Trust.Dr. Brittani Williams

According to "Who Deserves State Financial Aid?," insufficient state investments in higher education over the past two decades have led to significant increases of tuition rates and fees at public four-year colleges, leading to bigger hurdles for students looking to attend college, particularly for low-income students and those from marginalized communities.

State financial aid programs can help alleviate these burdens, but such programs in the current day are lacking, according to the report. Not only have state financial aid programs not kept up with rising tuition, but they are also falling behind compared to changing demographics and the needs of today’s students, which include returning adults, student parents, and working first-generation students.

“The ways in which requirements have been in previous years and throughout time, they do not account for evolving student populations in the ways in which students come into postsecondary education,” said report author Dr. Brittani Williams, a former financial aid counselor.

For the report – published this April – Ed Trust used state funding data from The National Association of State Student Grant & Aid Programs (NASSGAP) to assess the accessibility and fairness of 26 financial aid programs in 10 states spanning the nation, from California to New York.

The assessments were conducted using 12-point criteria that looked at various characteristics of these 26 programs, such as their program type, required applications, income thresholds, and award amounts.

California’s state aid programs exist on both merit- and need-based levels and are available to students without requiring standardized test scores, such as ACT or SAT scores, the acquiring of which can be difficult for students with limited access to test prep. But these aid programs were found to have low-income requirements, meaning students from middle-income households are excluded.

In Louisiana, the majority of aid programs were found to be merit-based. With one exception, most of them do not require the student in question to be low-income, but they are also not available unless the student has standardized test scores and a certain grade-point average (GPA).

“GPA requirements may create additional barriers for students from marginalized backgrounds, as they may have faced unequal educational opportunities or systemic disadvantages that affect their academic performance,” the report read.

Massachusetts’s programs do not require test scores or certain GPAs. But the two programs – much like almost all others in the other states – require that students complete the Free Application for Federal Student Aid (FAFSA) to be eligible.

“The FAFSA is a complex and time-consuming application, especially for students facing language barriers, limited technology access, or other constraints that would cause a FAFSA to be incomplete and delayed in processing,” the report read.

And unlike some states, such as New York, California, and Texas, Massachusetts’s aid does not accept alternatives to the FAFSA, meaning that undocumented students in the state will not have access because they do not have social security numbers for the federal form. Michigan and Tennessee are two of the states that join Massachusetts in this regard.

The report noted, however, that Massachusetts has taken steps via legislation to make state aid available to undocumented students.

Still, in many states, undocumented students and incarcerated students are left out from being able to receive aid. These kinds of limitations can prevent these populations from improving their life and financial situations. And in the case of students who were previously incarcerated, these hindrances can result in recidivism, according to the report.

Among the 10 states analyzed, California was found to be the one that awards the most financial aid, a sum of more than $2 billion, with Texas behind it with more than $1 billion in awards.

Conversely, Michigan had awarded the least financial aid to its students – approximately $118 million. And on a per capita basis, Louisiana ($350 million) and Washington ($516 million) gave the largest grant aid amounts, according to the report.

Ed Trust researchers provided a series of recommendations to increase equity in the face of these findings, including suggestions to raise award amounts, offer alternatives to the FAFSA, and expand aid access to part-time students. These key recommendations inform what higher ed reform and affordability should look like moving forward, Williams said.

States should prioritize offering need-based aid over merit-based awards, said Dr. Wil Del Pilar, senior vice president for Ed Trust.

“We see states that will prioritize merit over need,” Del Pilar said. “And overwhelmingly, all they're doing is providing dollars to students who would go to college without those dollars instead of [them to] students who would not go to college absent that aid.”

States should also do better to standardize the language of their aid offers to reduce confusion, Del Pilar added.

“If I get three aid offers and they all use different language, it's very confusing to know what the difference is between a grant, a loan, a work-study, or some other type of aid that may have some requirements to it,” he said.

This report comes amid ongoing stumbles regarding the recently overhauled FAFSA form, resulting in delays that will affect deadlines for both schools and prospective students.