Traditional Federal College Aid Needs Overhaul, Education Group Says

The rapid growth of the Hispanic population, among minorities needing better access to higher education, leads an advocacy group to suggest that the federal financial-aid structure is outdated and needs an overhaul.

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The existing structure for aid has long suited traditional students: those who are predominantly white and college-ready, able to secure their degree in four years. Today 25 percent of K-12 students are Latino, and babies of color now outnumber their white cohort, meaning it’s high time to redefine “traditional.”

Changing structures is the basis of policy suggestions released this week by Excelencia in Education in support of redesigning the federal-aid system. The organization is one of 16 that has released white papers as part of the Reimagining Aid Design and Delivery project, a $3.3 million grant program funded by the Bill and Melinda Gates Foundation.

Students today may not be college-ready and may opt to delay higher education rather than entering right out of high school. They may live off-campus and balance work with classes, often taking longer than four years to finish. These “post-traditional” students are a better representation of the growing cohort looking to enroll in higher education, but the current federal financial-aid system is not set up to meet their needs, the paper argues.

“It often feels like students have to adapt their approach to education … to accommodate a traditional system,” said Deborah Santiago, the organization’s vice president for policy and research and the paper’s author, in a conference call.

Santiago argues that the foundation of a revised federal financial-aid system should be based on these “post-traditional” students. The paper uses four principles to build on its policy considerations:

- To focus on serving traditional students discounts the reality that many enrolling students simply are not traditional; shoehorning them into that system does not work.
- Federal aid should be prioritized to reach low-income students, accompanied by incentives to complete their education.
- Financial aid should align with student support programs to ensure low-income students have resources they need to complete their education.
- Information about the federal financial-aid process needs an overhaul to clarify the options to prospective low-income collegians.

The policy considerations were made after considering survey data and interviews with students and leaders in the community, Santiago said. Researchers found that while black and Hispanic students are more likely to apply for federal aid, they are as likely to receive aid as other students. In addition, the amount of federal aid that black and Hispanic students accept is often much lower than other students: $8,991 and $7,925 respectively, compared with $9,400 for white students, and $9,563 for Asian students.

In addition to receiving lower aid awards, black and Hispanic students often have lower expected family contributions—a calculation based on a student’s family income that refers to how much a family is expected to pay toward a student’s total costs.

The average national EFC for all students is $13,524, based on a median family income of $50,000. For black and Hispanic families, that number drops to $8,697 and $9,966, respectively.

Santiago said that black and Hispanic students are more likely to seek more affordable education, at community colleges for instance, thus lowering tuition costs (and aid packages). They also are likely to work while in school. All these factors contribute to their receiving lower aid amounts.

The differences between the two types of college students become even more stark considering recent reports that by 2019—just six years from now—no race or ethnicity is expected to be the majority among those who are 18 or younger. Non-Hispanic whites are expected to become a plurality by 2043 and become the minority among people of color by 2060.

“These post-traditional students have strengths and needs not sufficiently addressed in federal financial-aid policy today,” the report states. “Now is the time to prepare the policy infrastructure to support their individual success and their collective potential for contributing to our society.”