Three Approaches for Improving College Access and Affordability
President Biden recently announced that the federal government will forgive $10,000 in undergraduate student loans for borrowers earning less than $125,000; students who received a Pell grant in college can receive an additional $10,000 of debt forgiveness. The Biden Administration also announced both a final three-month pause on student loan payments and a more permanent solution for borrowers: a new repayment plan that would allow certain undergraduate borrowers to pay half as much as they currently pay per month while covering their unpaid interest.
This debt forgiveness plan will undoubtedly help the 45.4 million recipients of federal student loans,i and it will disproportionately help borrowers who are Black, Hispanic, and first-generation college students, who typically must borrow more than their peers to pay for college.ii, iii However, moving forward, Biden’s plan doesn’t address the challenges that college affordability present to degree attainment for current and future students. Low-income students are much less likely to earn a bachelor’s degree compared to their peers, and this disparity is linked, in part, to affordability. Differences in bachelor’s degree attainment rates, by income,iv are drivers of wealth and income gaps.
Long-term solutions for making college more affordable would likely require a large restructuring of how higher education is funded, both at the federal and state levels. These changes are important but are politically difficult. In the interim, we suggest other ways that researchers and policymakers can support students while working within the existing funding structure for postsecondary education.
An increase in research, evaluation, and other policy tests of financial and non-financial support for students could help policymakers learn which mechanisms best support students as they enroll in and complete college. Abt researchers have explored some of these topics, but a better understanding of the range of policies and programs that work could improve college enrollment and completion. Here are three approaches that might help improve college affordability moving forward:
1. Connect students and families with resources early, so they can craft a plan to pay for college and apply for financial aid. Ensuring that resources to help students and families plan for college costs are more universally accessed as early as eighth or ninth grade could allow families the chance to make more informed choices about college and help them take advantage of existing sources of financial aid. Abt researchers helped the Consumer Financial Protection Bureau (CFPB) identify content and features for digital tools that can help families plan for college financing. The tools will be part of CFPB’s existing suite of tools that address paying for college (such as understanding financial aid and student loans).
2. Develop financial aid policies that encourage student participation. Abt has been working with the Department of Education to evaluate how changes in financial aid policy can support college-going and persistence. For example, Abt is working with the Department to evaluate some of the policy changes being tested as part of the Experimental Sites Initiative (ESI). The initiative allows colleges to try out changes in policies to expand the number of students receiving federal aid, including Pell grants, and, in some experiments, the amount of aid received by each student going to college. In recent years, different college-going policies—such as providing more extensive loan counseling to borrowers and expanding Pell grants to incarcerated students—have been part of several policy changes tested in the ESI. The results of these studies could highlight 1) how changes in federal financial aid policies could help more students and their families afford college and 2) the kinds of information students and their families need to ensure they access aid. On a larger scale, evaluating these changes offers a critical opportunity to determine how financial aid regulations could better help students afford college and obtain a degree.
3. Understand how to help students overcome other, non-financial barriers. Financial support is important, but it’s not the only reason students don’t enroll in or complete college. Supports for college-going students differ in how they are delivered, and the extent to which they impact students’ college success. Abt research has shown that real-time, consistent support and counselling delivered in-person and through text messages can help students complete necessary steps to enroll in college, and plan for college costs, but these supports are likely insufficient to encourage students on the cusp of enrolling to do so. Customized supports to meet students where they are may be necessary to help a wider set of students overcome barriers to college enrollment. Evaluating which supports benefit students continues an important research area in postsecondary research.
Postsecondary education research and evaluation helps policy makers, practitioners, administrators, and other stakeholders learn how best to help students succeed. Policy experiments on a larger scale, such as the ESI, can help the Department of Education better serve students through federal financial aid policy. More targeted evaluations—focusing on a specific intervention for a specific population—also help stakeholders develop tactics to promote equity in postsecondary education. The next few years will likely bring new challenges in college affordability, as many students may return to college after time away linked to the COVID-19 pandemic. The debt forgiveness has bought students time; let’s use it to develop longer-term solutions for all.
iMa, J. (2021). Trends in college pricing and student aid 2021. College Board. Retrieved from: https://research.collegeboard.org/media/pdf/trends-college-pricing-student-aid-2021.pdf
iiBetween 2009 and 2019, median student debt increased 31 percent for Black borrowers, 23 percent for Hispanic borrowers, and 19 percent for white borrowers. These figures have not kept up with income growth over the same period. Source: Perry, A. M., Steinbaum, M., & Romer, C. (2021). Student loans, the racial wealth divide, and why we need full student debt cancellation. The Brookings Institution, June, 23. Retrieved from: https://www.brookings.edu/research/student-loans-the-racial-wealth-divide-and-why-we-need-full-student-debt-cancellation/
iiiGrinstein-Weiss, M., Perantie, D. C., Taylor, S. H., Guo, S., & Raghavan, R. (2016). Racial disparities in education debt burden among low-and moderate-income households. Children and youth services review, 65, 166-174.
ivCahalan, M. W., Addison, M., Brunt, N., Patel, P. R., Vaughan III, T., Genao, A., & Perna, L. W. (2022). Indicators of Higher Education Equity in the United States: 2022 Historical Trend Report. Pell institute for the study of opportunity in higher education. Retrieved from: https://files.eric.ed.gov/fulltext/ED620557.pdf
