The Observer, March 23, 2007
Volume XXXIX, Issue 21
H&R Block project aims to help low income students with college finances
It is no secret that fewer students from low-income families attend college than those with wealthier upbringings. However, the explanation may not just be simply a lesser ability to pay. Many believe that prospective college students from lower socioeconomic groups are daunted by the task of applying for college and financial aid.
In order to receive financial aid, a prospective student must complete the Free Application for Financial Student Aid, or the FAFSA. At first glance, the FAFSA is a rather intimidating document, containing eight pages and over 100 questions.
Don Chenelle, Director of University Financial Aid, is one of those many people who believe that the complexity of the FAFSA hinders low-income individuals from attending college.
"There are many students statewide and their parents for whom the FAFSA represents a real impediment to postsecondary education," Chenelle said. "They don't understand the form, and they have difficulty gathering the information necessary to complete the form. There are students who have given up in despair and not gone to college simply because the process was overwhelming."
Case economics professor Eric Bettinger emphasized that it may be the overall complexity of applying to college and for financial aid, not just the FAFSA form alone, that holds back low income students. Hoping to determine a way to amend the process, he sat down with fellow researchers Bridget Terry Long of Harvard University and Phil Oreopolous from the University of Toronto to try to understand the barriers of financial aid for low-income individuals. The three researchers devised an experiment that they hope, with the assistance of national tax preparer H&R Block, will do just that.
The experiment works like this: clients of 26 H&R Block offices in the Cleveland area with incomes less than $45,000 will be randomly selected to participate in the experiment. One group of these taxpayers will be offered free help with filling out their FAFSA forms. The other taxpayers, acting as a control group in the experiment, will only receive publicly available information about attending and paying for college.
H&R Block's tax preparers will use specially designed software that will automatically answer many of the over 100 questions on the FAFSA form using data directly from the taxpayer's return. The preparers will then meet with each applicant and provide him or her with a projected financial aid package. The hope is that the project will make the FAFSA and the financial aid application process less intimidating. It will also provide students and their families with better knowledge regarding the cost of a college education.
"Data shows that parents of students in lower income families directly overstate the cost of going to college," Chenelle said. "They think it costs much more than it does."
Bettinger and his research team also hope that the project will help streamline the process. After a student files a FAFSA, it usually takes four to six weeks for the federal government to send a student aid report (SAR) that contains the expected family contribution (EFC) to the student and his or her listed schools. By the time a school receives the report and presents a financial aid package, it might not be until March or April of senior year, which can be months after a student sends applications to schools. With H&R Block providing a projected financial aid package right away, a student can make a more financially conducive college choice at an earlier time.
Having the FAFSA prepared by H&R Block with the tax return should also reduce errors pertaining to both documents. Chenelle said that the university is often required to gather more information to verify entries on the FAFSA for up to 30 percent of its applicants. If there are errors, then the original financial aid package can be decreased.
When asked if he thought the experiment would reduce the chance of errors, Chenelle said "absolutely."
"The information will be much more accurate because the information will come directly from the tax return," he said. "If it's accurate from the beginning, they don't want have to spend more time trying to agree their FAFSA to the tax return."
Once the students selected in the experiment make their college choices, the Ohio Board of Regents will collect, gather, and process their transcript data. By early next year, Bettinger and the research team hope to receive anonymous data from the Board and be able to present preliminary results in summer 2008.
