- Low-income students are disproportionately asked to verify their family's income during the financial aid application process, and colleges are finding that many never complete the process as a result, Inside Higher Ed reported.
- The phenomenon, known as verification melt, prevents low-income students from receiving grants and scholarships that facilitate access to higher education. According the National College Access Network, 50% of low-income students are selected for the verification process and 22% of that share — about 90,000 students — won't finish applying for aid as a result. Other data show around 30% of students overall are asked to verify.
- Financial aid experts are seeking more transparency in the application process to make the form easier to complete and the results more accurate. The Education Department is implementing a new verification system for the 2019-20 financial aid year that is expected to better pinpoint students.
The National Center for Education Statistics recently released a report examining high school students' responses to a federal survey on their perceptions of college costs. The survey found that students' perception of the cost of tuition and fees at a four-year public institution was closely related to their socioeconomic status. Ninth-graders from families with higher income tended to overestimate the cost of college, while those from families with lower-income tended to underestimate the cost of college, Education Week reported. The findings were similar once those students had moved on to the 11th grade.
Research has found the mystification of college costs and the financial aid process to be associated with lower college enrollment among low-income and minority students. That also has an effect on the type of institutions students apply to. Choosing a two-year or less-selective institution can reduce the likelihood of degree completion.
Policy debates related to revising the federal tax code have renewed discussion on 529 education savings plans that allow families to make post-tax contributions to an account to be used for costs related to obtaining a college education. The funds can be withdrawn tax free as long as they are being used for qualified education expenses. Currently, policy proposals are being made that will allow 529 plans to be used to pay for apprenticeships and student loans.