Inequities fuel Iowa’s drop in filing for higher ed financial aid

IOWA CITY — Even before the pandemic upended education in 2020, fewer Iowans were filing the Free Application for Federal Student Aid — a key indicator of college enrollment and, for many, a “door” to higher education.

That decline is at the center of a new report that digs into the fade, breaks down possible causes, analyzes COVID-19’s accelerating impact and reveals equity gaps are in urgent need of being addressed as demographics shift.

“Policymakers, practitioners, and administrators should develop policies and strategies that directly address these equity gaps,” according to the 2021 “FAFSA Filing in Iowa” report from Iowa College Aid, the state agency charged with making college accessible for Iowans. “Closing these equity gaps to ensure that more under-resourced students file the FAFSA and enroll in postsecondary education is necessary to meet Iowa’s workforce needs.”

The dips in FAFSA filings matter because Iowa projects a pipeline of fewer high school graduates, but with a larger share of minorities, and an expected increase in demand for educated workers.

In Iowa, the FAFSA doubles as the application for the Iowa Tuition Grant and the Future Ready Iowa Last-Dollar Scholarship — two programs accounting for more than three-fourths of state-supplied student financial aid.

“The FAFSA opens the door to postsecondary education because it is required for all federal student aid — including Pell grants and student loans — and most state and institutional aid,” according to the report.

Iowa College Aid notes that college-intending high school students in the state who file a FAFSA are 37 percentage points less likely than those who don’t to “melt” — students who fail to follow through on immediate college plans.

Although COVID-19 didn’t precipitate the FAFSA decline, it accelerated it for most groups of students — like multiracial and Hispanic seniors across Iowa’s public high schools, both of which saw a 6 point drop this cycle from last.

Looking at the number of FAFSAs completed by Iowa’s public high school seniors this cycle, those students filed 18,243 — nearly 800 fewer than last cycle’s 19,039, when numbers were down 100 from the year before that.

Total FAFSAs filed by all students in Iowa for the 2021-22 cycle — when the money will be distributed — dropped to 98,996. That figure, which includes FAFSAs from students already in college, is more than 10,000 or 9 percent below the 109,070 filed for the 2018-19 cycle.

As of May 31, according to the new report, Iowa’s public high school filing rate was 49 percent — below last year’s 51 percent in the same period. As of Wednesday, Iowa College Aid’s online FAFSA tracker showed a 52-percent high school completion rate for this cycle, nearly 4 points below the 56 percent through the same period last year.

Nationally, through July 23, about 55 percent of the 2021 high school class had completed a FAFSA, nearly 5 percent below last year. Iowa’s completion rate ranks it 20th in the nation, according to the federal tracker. Fifteen states have smaller declines from last year than Iowa, and only three states reported more filings this year: Wyoming, Illinois and South Dakota.

Inequities

White and Asian students consistently have the highest FAFSA filing rates in Iowa — with Asian students this cycle tallying the only increases, while all other racial and ethnic divisions dropped.

And, although counterintuitive, the report found far more FAFSA filing among students who don’t qualify for free and reduced-price lunch — used as a proxy for low-income status — at 59 percent, compared with a 31-percent rate among those who do qualify for lunch program.

“As the percentage of white students in a high school increases, the percentage of seniors filing a FAFSA increases,” according to the report. “As the percentage of low-socioeconomic students increases, FAFSA filing rates decline.”

From last cycle to this cycle, the filing rate among students qualifying for the lunch program dropped 4 points, compared with a 2-point drop for those who don’t qualify.

That, according to the report, suggests “COVID-related disruptions in education had a greater effect on FAFSA filing among (the lunch program) students.”

Female students consistently file more than male students, although they, too, have seen declines from 61 percent in the 2018-19 cycle to 57 percent this year. The male decline has moved that percentage from 46 to 41 this cycle.

The only subset that’s seen an increase over that period are female students who identify as Asian — with 69 percent filing this cycle, compared with 61 percent in 2018-19. Black and Hispanic males have the lowest filing rates, at 26 percent and 24 percent respectively.

Cost and competition

Supporting its data on fewer low-income and minority filers, Iowa College Aid also uncovered a decline in the percentage of filing students who are eligible for the federal Pell grant — suggesting those who are completing the aid application aren’t necessarily those with the highest need.

Where 41 percent of public high school filers in Iowa were Pell eligible in 2018-19, about 35 percent were this cycle. Iowa College Aid assigned two possible explanations: Either Iowa households are becoming wealthier or “the composition of students who file a FAFSA is changing.”

Given the impact COVID-19 has had on family finances, state coffers and university pocketbooks, more students might need aid to access higher education. All three of Iowa’s public universities are increasing tuition for all students for the upcoming school year.

Before the increases, all three campuses were second from the bottom in tuition and fees among their peer groups. And experts surmise competition among universities for students will spike as a national enrollment cliff looms in the wake of a recession-fueled drop in the birthrate.

The new FAFSA report includes some data on Iowa’s higher ed competition, reporting high school filers aren’t sending their applications to in-state institutions at the same rate they used to — revealing more out-of-state interest.

“The percentage of students sending their FAFSA to at least one in-state public two-year institution has declined from 54 percent to 51 percent this cycle, while the proportion of students sending their FAFSA to at least one out-of-state public four-year institution has increased from 22 percent in the previous cycle to 24 percent this cycle,” the report said.

‘My brother missed out’

Still, given the hiccup across higher education last year — with some colleges canceling in-person instruction altogether or offering a hybrid approach, like most campuses in Iowa — many students are eager to return to a more traditional college experience.

Iowa Board of Regents President Mike Richards in May mandated that Iowa’s three public universities return to pre-pandemic levels of in-person learning and academic experiences, angling for an enrollment rebound.

Even as cases now rise and the delta variant spreads, the regents and its universities have not changed course.

“With the variants, it keeps feeling like it keeps going,” prospective UI student Sarah Weber, 17, told The Gazette on Friday while on a campus tour with her mom. “I hope it’s not a concern when I get to college. But it might be.”

Weber is going to be a senior in her Minneapolis high school and has visited numerous colleges in her search for a higher education home. She’s toured the universities of Wisconsin-Madison, Indiana and Minnesota; Marquette University; and Drake University.

She’s searching for a quality campus experience in a college town — rather than a bigger city — and wants to pursue a business degree. Financial aid is definitely on her radar, although she hasn’t yet filed the FAFSA.

“I’m also interested in merit scholarships,” Weber said.

High school senior Haleigh Holbert, 17, of Cedar Falls, also on Friday toured the UI campus — calling it among her top choices. Like Weber, she wants a bigger school in a smaller city with solid academics in her field of interest — biology — and plans to seek aid before enrolling.

In discussing how she’ll decide, Holbert noted her older brother is a Hawkeye heading into his sophomore year, and he didn’t much like the ways the pandemic derailed his freshman experience.

“I would like to have more of an in-person experience,” Holbert said. “Because I know my brother missed out on that a little bit last year.”

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