Personal finance

A Positive Sign for College Enrollment — Finally | Personal finance

Anna Helhoski

After a two-year decline in college enrollment, there’s at least one early indicator of a reversal to come: Financial aid application submissions are on the rise.

The latest federal data, tracked by the National College Attainment Network, or NCAN, shows that 4.6% more high school students completed the college financial aid application compared to 2020.

The application, known as the Free Application for Federal Student Aid, or FAFSA, is the key to accessing financial aid that includes Pell Grants, scholarships, and federal student loans. Completion rates among high school seniors generally correlate with first-year college enrollment in the fall.

Before the pandemic, the FAFSA completion rate was 53.8% for the Class of 2019. But that rate started to drop in 2020 and bottomed out at 49.8% among the Class of 2021. Spring 2022’s latest college enrollment data also showed a two-year drop of 7.4% (about 1.3 million students), according to data from the National Student Clearinghouse Research Center.

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But the most recent data analyzed by NCAN shows the rate has risen to 52.1% among the Class of 2022. It’s a welcome sign for those concerned that the pandemic-fueled drop in enrollment may be permanent.

What’s going well

Increases in aid applications are highest among schools with large populations of low-income and minority students. Urban schools also recorded gains. Bill DeBaun, NCAN’s senior director of data and strategic initiatives, says he thinks a more “normal” in-person school experience makes a difference.

“The theory I’m working on is that going back to school has reconnected students with a lot of supports in school,” DeBaun says. By support, he means face-to-face interactions with guidance counselors, teachers, and peers, which can mean the difference between submitting the FAFSA or not.

The five places in the country with the highest completion rates—Louisiana, Tennessee, the District of Columbia, Illinois, and Texas—show the range of successful approaches.

Tennessee has one of the most successful free college programs, the Tennessee Promise, which requires FAFSA to access. But that might not tell the whole story, as other states, like Washington, also have free college programs but continue to lag in FAFSA completion.

Meanwhile, Colorado, Illinois, and Texas have universal FAFSA mandates that require applications to graduate. Texas, the state with the most recent term, saw a 25.9% increase in completion over the past year. A few other states also have mandates, including California, Alabama and Maryland, all of which had higher overall completion rates than other states.

In Washington, DC, a district-wide FAFSA initiative supports and encourages public high schools and community organizations to increase aid-seeking rates. There are even awards for the best performing schools.

Keep Your Optimism Cautious

Despite widespread gains, the FAFSA completion rate in 2022 is still not quite comparable to pre-pandemic rates.

And the latest enrollment data from the National Student Clearinghouse Research Center is not yet available. Nor is the latest data on FAFSA renewals. Federal data previously available through September 15, 2021 shows 1% fewer renewals for 2020-21 compared to 2019-20, according to NCAN. DeBaun says it’s possible to see this previous drop in renewals rebound.

Students have been pulled out of the classroom and into the workforce through many entry-level jobs that don’t require a degree and come with higher-than-usual salaries, DeBaun says. But those jobs and wages might not be sustainable in the long term, and at least some of those workers might eventually return to school.

“Hot economies don’t last forever, and that pendulum will swing back to where we have employees on the fringes going back to school to retool, upskill,” DeBaun says.

Job opportunity isn’t the only thing keeping students from going to class: A 2022 Gallup-Lumina Foundation study found that among those who were enrolled during the pandemic but had no no degree, cost was the biggest factor in why students are not currently attending.

How to complete the FAFSA

Completing the FAFSA is crucial if you’re attending college, even if you don’t think you qualify for need-based aid. You must submit each year you plan to attend. The FAFSA is now open for Fall 2022. FAFSA Form 2023-24 will open on October 1.

  • Follow the instructions on StudentAid.gov to create your Federal Student Aid ID.
  • Gather the necessary documents to complete the form (here is a control List).
  • Use the IRS Data Recovery Tool to transfer your tax information from the previous year.
  • Indicate up to 10 schools to which you wish to apply.