Administrators in higher education are working hard to bring their students, faculty, and staff back to campus safely after the devastating toll from the corona virus. But as colleges and universities develop their plans, a critical issue that needs to be examined is how the pandemic will affect the allocation of federal financial aid. After a financially volatile year, how many students will not be able to afford college because their financial aid is based on pre-pandemic income? A short-term financial aid reform is vital to providing students the funds they need to access higher education.
The Free Application for Federal Student Aid (FAFSA) is the gateway to all federal funds for education. Students must complete this application every year to be eligible for grants and loans from the federal government.
In 2016 the FAFSA was updated to use tax information from two years prior the academic year funds were requested. While this change was originally positive, allowing students to have greater access to financial aid without having to wait for tax information, this update potentially sets students up to experience a drastic decrease their financial aid. For the 2021–22 academic year every student completing the FAFSA will be using their tax information from 2019. This means the aid they qualify for will be based on pre-pandemic income which may be dramatically different from their current financial situation. How will students and families afford their education after experiencing a year or more of financial damage?
Out of the available federal resources to support education Pell grants are the funds most helpful to low income and students of color afford higher education. Pell grants do not have to be paid back and usually cover most of the tuition at a two-year community college, which enroll high number of students of color. For the 2021–22 school year the full Pell award is $6,495. Students of color receive Pell grants at a higher percent then their white peers. Table 1 contains a snapshot from the 2015–16 Academic Year. It breaks down the percent of students by race who received a Pell Grant at public 2-year institutions. This chart clearly shows that more students of color rely on Pell Grants than their white peers. Communities of color have been hit hardest by the recent pandemic, both in terms of health and employment. Students from these communities are already underrepresented in higher education both in terms of enrollment and completion. Basing Pell grants on pre-pandemic finances threatens to enlarge the racial educational gap that already exists.
Table 1.
Source: Trends in Pell Grant Receipt and the Characteristics of Pell Grant Recipients Web Tables: Trends in Pell Grant Receipt and the Characteristics of Pell Grant Recipients: Selected Years, 2003–04 to 2015–16 pg. 19
To support students of color who have been disproportionately affected by the pandemic, the federal government should allow a window for the next three-years (academic years 2021–22, 2022–23, and 2023–24) where students can use the tax information from one of the past two years, whichever year provides them with a stronger academic package. This would provide families of dependent students the ability to select the tax information from the year that would provide them the most beneficial financial aid package. Independent students would also benefit from this policy. Independent students, those who do not have to list parental income on the FAFSA, must be 24 years of age or meet a required exception that includes being in the military, legally emancipated, or having a dependent. These students have also been affected by COVID, it would be important that they are included in this policy to allow them to select tax information from the last two years that would provide them with the most financial support. This policy would help students who have been affected by the pandemic, it would support their ability to receive the financial aid package that most accurately reflects their current financial circumstances. By instituting this change for a limited time, it provides students with immediate support to address the economic decline from the pandemic but allows the provision to be removed as the preexisting FAFSA tax rules catch up with the economic impact of COVID.
To recover from the pandemic, we in higher education must be mindful of prioritizing the needs of students who have been hit hardest by this pandemic-induced economic downturn. These students will be national leaders, industry employees, and future the workforce that rebuilds our economy. If the current policies around FAFSA are not adjusted, we will see less students of color able to enroll and graduate from institutions of higher education. By allowing students to submit their 2020 taxes for the 2021–22 FAFSA students whose income was drastically affected by the pandemic will have access to the full federal Pell grant, as well as other financial aid that is based on income. By increasing, not limiting, access to financial support for education we can encourage students to enroll in programs that promote job training, and employment opportunities that will led to economic recovery.
