The Money Matters! New Survey Suggests Financial Aid Determines School Selection

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Finding a way to pay for post-secondary education can dictate whether students complete their work toward a degree, but knowing about financial aid options can also play a role not only in applying for schools, but to which schools a student applies.

A recent National Bureau of Economic Research paper surveyed worked on addressing earlier research that showed lower-income students were less likely to apply for highly-selective schools, even though those schools would offer enough financial aid to make the student’s education less expensive than the less-selective school to which the student eventually applied.

In this study, researchers intervened with different means of communication to students, encouraging them to apply and including information about financial aid options. The students were split into four groups that received the following information:

  • A group who received upfront information about the net cost of college (including what would be offset by financial aid)
  • A group who received reminders about college application deadlines
  • A group who received fee waivers for college applications
  • And a control group who received nothing.

The results were clear: Those students in the group who received information about both the net cost of college AND their financial aid options sent out more applications than any of the other three groups. Knowledge of financial aid options is not only useful information, but a powerful tool for students looking to achieve goals in their higher education.

For Iowa students, access to financial aid options abound from state scholarships and grants to the Free Application for Federal Student Aid (FAFSA), which helps connect students with the financial aid offices at their target schools.

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