Here Today, Gone Tomorrow? Investigating Rates and Patterns of Financial Aid Renewal Among College Freshmen
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College affordability continues to be a top concern among prospective students, their families, and policy makers. Prior work has demonstrated that a significant share of prospective students forgo financial aid because they did not complete the Free Application for Federal Student Aid (FAFSA); recent federal policy efforts have focused on supporting students and their families to successfully file the FAFSA. Despite the fact that students must refile the FAFSA every year to maintain their aid eligibility, there are many fewer efforts to help college students renew their financial aid each year. While prior research has documented the positive effect of financial aid on persistence, we are not aware of previous studies that have documented the rate at which freshman year financial aid recipients successfully refile the FAFSA, particularly students who are in good academic standing and appear well-poised to succeed in college. The goal of our paper is to address this gap in the literature by documenting the rates and patterns of FAFSA renewal. Using the Beginning Postsecondary Students Longitudinal Study, we find that roughly 16 % of freshmen Pell Grant recipients in good academic standing do not refile a FAFSA for their sophomore year. Even among Pell Grant recipients in good academic standing who return for sophomore year, nearly 10 % do not refile a FAFSA. Consequently, we estimate that these non-refilers are forfeiting $3,550 in federal student aid that they would have received upon successful FAFSA refiling. Failure to refile a FAFSA is strongly associated with students dropping out later in college and not earning a degree within six years. These results suggest that interventions designed to increase FAFSA refiling may be an effective way to improve college persistence for low-income students.