Using behavioral science to promote completion of the Free Application for Federal Student Aid
Calvin Johnson, Deputy Assistant Secretary for Research, Evaluation, and Monitoring.
Access to higher education is a way to unlock economic opportunity and break the cycle of intergeneration poverty. Yet high costs can make it very difficult for people—particularly the low-income individuals that HUD serves—to access postsecondary education opportunities. Many students depend on loans and other financial aid in order to make college and other postsecondary programs affordable. Completing the Free Application for Federal Student Aid (FAFSA) is the first step to receiving federal financial aid, and HUD is interested in increasing access to higher education by increasing FAFSA completion rates among HUD-assisted residents. Recent analysis of the 2014-2015 FAFSA cycle (applications filed from January 2014-June 2015) show that HUD assisted 17-20 year-olds submitted a FASFA at a rate of 28%. Of those, 73% enrolled in institutions of higher education and received student aid. Importantly, 99% of aid recipients received Pell Grants, which unlike traditional loans do not need to be repaid and provide up to $5,815 per year for six years. Because of this, access to Pell Grants are a particularly important mechanism for low-income students to afford postsecondary education.
Pell Grants and other types of federal aid are only offered to students who have submitted a FAFSA. The process for completing one, however, is complex and burdensome. Research from the social and behavioral sciences has demonstrated that even seemingly small barriers to accessing programs—such as a lengthy and complicated application—can have profound effects on program engagement. Strategies aimed to reduce barriers and increased FAFSA completion have been tested, including a successful intervention that streamlined the FAFSA process in conjunction with tax preparation.
The Department of Housing and Urban Development (HUD), in partnership with the Social and Behavioral Sciences Team (SBST) and the Department of Education Office of Federal Student Aid (FSA), created its own FAFSA experiment. HUD tested a mail intervention designed to increase FAFSA completion rates among youth and full-time students ages 17-20 in households receiving Housing Choice Vouchers (HCV). In March 2016, HUD sent nine variations of a mailing to a total of 45,000 youth across the country. The mailings differed in messenger, format, and content: Six of the variations were from the First Lady Michelle Obama’s Reach Higher campaign and three were from FSA. Messages varied as to whether they contained straightforward language on the FAFSA or whether they including a personal message from the First Lady. Mailings were either a standard letter or a postcard with an infographic. All mailings incorporated insights from the social and behavioral sciences and included key features shown to be important in messages: All pieces of mail were personalized with the recipient’s first name; included clear action items and easy steps to FAFSA submission; and had helpful hints like a phone number and website to get assistance. Three variations included a copy of the paper FAFSA that could be used as a worksheet or returned using the included stamped envelope in case finding a computer and internet connection was a barrier to completion. Application completion rates were assessed using administrative data provided by FSA. Approximately 150,000 17-20 youth and full-time students in HCV households who were not sent a mailing were included in a control group—we included as many 17-20 years olds as possible in the control group in order to increase statistical power for detecting group differences in FAFSA completion rates.
FAFSA completion rates for each group compared to the control group were assessed August 2016. Although none of the nine mailings were found to significantly increase FAFSA completion rates relative to the control group, the most effective sender was the First Lady using her personal story and the letter including the paper FAFSA was the most effective format. These findings suggest that it’s important for the messenger to have an authentic message, and that the paper FAFSA may have been used as a worksheet to help complete the application or submitted in lieu of an electronic application. Results will be assessed again in December 2016 to determine whether there were differences in rates of completion of the paper FAFSA relative to the electronic version. Federal aid disbursements (e.g., number of Pell Grants) and type of postsecondary education attended will also be determined.
Even though there were no statistically significant results, HUD still considers this experiment a very big success for the department: It was the first in-house research project of its kind, and demonstrated the feasibility of linking HUD and FSA administrative data to support research. It also provided valuable lessons for doing this work in the future, and HUD will be following up with two additional research initiatives to help promote FAFSA completion: HUD is currently partnering with select public housing authorities (PHAs) to test updated mail messages as well as phone and email reminders to encourage FAFSA completion. In 2017 HUD will also be launching the ROSS for Education program that will fund education navigators to assist public housing residents with the FAFSA and other activities around postsecondary education preparedness.
Analysis conducted by the Department of Education Office of Federal Student Age using linked HUD and FSA administrative data.×
Susan Dynarski and Judith E. Scott-Clayton. 2008. “Complexity and Targeting in Federal Student Aid: A Quantitative Analysis,” NBER Working Paper No. 13801.×
Daniel Kahneman. 2003. “Maps of Bounded Rationality: Psychology for Behavioral Economics,” American Economic Review 93: 1449–1475; Richard Thaler and Cass Sunstein. 2008. Nudge (Yale).×
Benjamin L. Castleman and Lindsay C. Page. 2016. “Freshman Year Financial Aid Nudges: An Experiment to Increase FAFSA Renewal and College Persistence,” J. Human Resources 51:389-415.×
Eric P. Bettinger, Bridget Terry Long, Philip Oreopoulos, and Lisa Sanbonmatsu. 2012. “The Role of Application Assistance and Information in College Decisions: Results from the H&R Block FAFSA Experiment,” Quarterly Journal of Economics 127: 1205–1242.×
See SBST 2nd Annual Report for full results: https://sbst.gov/download/2016%20SBST%20Annual%20Report.pdf×