Although post-high school education is projected to become even more critical in the years ahead, rising costs puts higher education out of reach for many students. While federal financial aid can provide a strong foundation, states can help bridge the affordability gap for students. As Education Strategy Group’s new report from shows, states have opportunities to enhance access and affordability by developing responsive financial aid policies and programs.
So, which levers have the most potential for impact? Here are seven questions state leaders can consider as they work to make higher education more accessible:
How Can States Prioritize Need-Based Financial Aid?
Need-based aid is consistently shown to improve equitable access and success for historically underserved students. States could consider need-based aid as a cornerstone of their financial aid programs. The Oregon Opportunity Grant — Oregon’s need-based grant — predominately benefits students of color, students from low-income backgrounds, rural students and first-generation college students. Students who receive the grant have higher retention and completion rates and earn their degrees faster compared to students from low-income backgrounds who do not receive the award. Recent program expansions also allow some middle-income students who are beyond Pell Grant-eligibility to receive the award.
How Can Program Requirements Be Simplified?
States can make the application, qualification and maintenance processes simple and aligned across programs. This makes it easier for students to understand and access the aid they need. Until recently, North Carolina had three main financial aid programs — each with different need thresholds, eligible institutions, award amounts and methods for calculating needs. The state consolidated all three programs into the Next NC Scholarship, which ensures North Carolinians from households making $80,000 or less per year have tuition and fees covered at any community college and more than half, if not all, of tuition and fees covered at in-state public universities.
Which Non-Tuition Expenses Could Be Addressed?
Financial aid not only covers tuition but can also address the full cost of attendance, including expenses like housing, food and transportation. With this in mind, California created the Student Success Completion Grant to provide community college students with additional financial aid to cover these expenses.
How Can States Ensure Flexible and Inclusive Aid Programs?
Flexibility in aid programs ensures that all learners — including adult learners, undocumented students, rural students and students impacted by the justice system — can pursue higher education. Recognizing the importance of adult learners in ensuring the state reaches its attainment goal, Tennessee created the Reconnect program, which covers community college tuition costs for adult and working learners. The program provides advisers who help adult students, including those exiting the prison system, access aid.
What Are States’ Greatest Workforce Needs?
States could expand financial aid to include support for short-term training and credentials that align with workforce needs. These programs are particularly important for non-traditional students and those seeking to quickly upskill for in-demand jobs. Louisiana’s M.J. Foster Promise Program provides financial assistance for training in high-demand industries (e.g., construction, healthcare, information technology, manufacturing and transportation). Importantly, the program requires institutions to enhance their data collection processes to help track outcomes of noncredit and short-term training programs.
What Data Is Needed to Continuously Improve Financial Aid Programs?
States can use data to monitor and evaluate the effectiveness of their financial aid programs. A data-driven approach allows for ongoing adjustments and refinements to ensure that programs remain aligned with student needs and state goals. Michigan’s MI Data Sharing Center publishes dashboards on FAFSA completion and aid programs including the number of eligible students who received aid and average awards by institution. Michigan also equips high school counselors with student-level data on aid program eligibility and FAFSA completion.
How Can States Enhance Communication and Transparency?
States can consider investing in outreach and information-sharing to ensure that students are aware of the resources available to them. New York requires institutions to provide a uniform financial aid award information sheet to make it easier for students to understand and compare award offers. The state also offers a financial aid comparison tool so students can compare offers across colleges.
These guiding questions can help state policymakers hone their state financial aid programs to maximize support for students who need it most. Read our latest report for more on how states can open doors to higher education for all students including spotlights on leading states and how different policies impact different types of students.
