Digging Deeper into Universal FAFSA Impacts in Four States

Bill DeBaun, Senior Director of Data and Strategic Initiatives and Caroline Doglio, Program Associate

Reading time: 10 minutes

Universal FAFSA policies have been gaining steam, with at least 15 states having considered the policy either through legislation or regulation. California’s policy goes into effect for the 2022-23 academic year; New Hampshire will follow the year after that. Some states are dabbling with the concept without jumping all the way in. For example, Colorado established a grant program for local education agencies (LEAs) who adopt a requirement to assist students in FAFSA completion. Maryland does not require students to file the FAFSA, but rather obligates LEAs to encourage and assist as many high school seniors as possible in completing and submitting the FAFSA.

Despite increasing attention to these policies, they are still nascent. Louisiana’s universal FAFSA policy has been around the longest, but dates back only to the 2017-18 academic year. Illinois implemented its policy in the 2020-21 academic year, and Texas and Alabama both came online during 2021-22.

With four states having implemented the policy, let’s examine the effects on high school FAFSA completion during their implementation years.

Louisiana

During the 2017-18 academic year, Louisiana’s class of 2018 saw a big jump in high school FAFSA completions. NCAN previously wrote about the increase, which occurred during an otherwise “sluggish” FAFSA completion cycle for seniors. Compared to the class of 2017, Louisiana’s class of 2018 completed 25.9% more FAFSAs by about June 30, amounting to 7,778 additional completions. That 25.9% increase was more than double the next highest year-over-year increase (Nevada at 10.7%). The national percent change year-over-year for 2018 compared to 2017 was just 1.9%.

Unsurprisingly, the estimated percent of seniors completing also increased, by more than 11 percentage points, from the class of 2017’s 58.8% to the class of 2018’s 69.9%. This caused Louisiana to move from being ranked 12^th by percent of seniors completing in 2017 to 2^nd for 2018.

All in all, Louisiana set a high bar in the first year of its universal FAFSA implementation, and that bar has remained high in subsequent years. Since the class of 2018, Louisiana has ranked first in FAFSA completion among states every year except for the class of 2020, which finished second behind Tennessee.

Illinois

Illinois results with universal FAFSA in the implementation year present a curious case for a few reasons. First, the Covid-19 pandemic severely impacted the 2020-21 academic year, and FAFSA completions dropped precipitously (by about 4.8% around the June 30 milestone). Second, Illinois was already a top 10 FAFSA completion state before implementing universal FAFSA, indicating the policies, practices, and student behaviors were already contributing to good FAFSA completion outcomes. How much further a high-performing state could still rise with the universal FAFSA implementation remained to be seen.

That said, Illinois’ seniors still put in a very strong performance for high school FAFSA completions even in a down year nationally.

The effect of the Covid-19 pandemic on FAFSA completion in the 2020-21 academic year was such that just three states had a positive year-over-year percent change by July 2, 2021. Illinois had the highest year-over-year percent change (+3.1%, 4,664 additional FAFSAs) among all states, compared to national change of -4.8%. Illinois’ strong performance was also enough to move the state from 10^th nationally by estimated percentage of seniors completing in 2020 (~62.2%) to 4^th nationally for the class of 2021 (65.7%). In a year where less than half of seniors nationally were estimated to complete the FAFSA, the Land of Lincoln achieved a completion rate 15 percentage points higher than that.

Although the boosts to FAFSA completion in Illinois in the implementation year are by far the lowest of the other three states in this analysis, those other states also did not experience the class of 2021’s severe headwinds. Even in a state with prior strong performance and in a deeply difficult context, the first-year implementation of universal FAFSA policies still offered boosts to relative and absolute FAFSA completion.

Whether those boosts also moved the needle on postsecondary enrollment for the class of 2021 remains is an area for further research.

Alabama

One of two states to implement universal FAFSA during the 2020-21 academic year, Alabama had the most to gain of any of the four states considered by this post. During the 2019-20 academic year, Alabama’s class of 2020 ranked 34^th nationally by percentage of seniors completing at an estimated 46.7%, well below the national FAFSA completion rate.

The class of 2021, then, was quite a change for the Yellowhammer State.

About 58.9% of Alabama’s class of 2021 completed a FAFSA, which skyrocketed Alabama up the rankings from 34^th to 9^th. The more than 12 percentage point jump represented an increase of 24.9% FAFSA completions, or about 6,300 additional completers. This increase was second only to Texas in the 2021-22 academic year.

Notably, Alabama’s low-income public high schools saw year-over-year increases of 25.8% in completions compared to 19.7% for higher-income high schools; similarly, high-minority high schools, where 40 percent or more of students were Black or Hispanic saw FAFSA completions increase 28.1% compared to 19.5% for low-minority high schools. 

Texas

Last, but surely not least (quite the opposite actually), comes Texas. Looked at a map recently? Texas is huge. As we wrote on this blog about three years ago: “NCAN’s estimate of what an increase to FAFSA completions in Texas could have looked like is 25% more than the gains the entire nation saw in the 2017-18 academic year, and that year included the big jump from Louisiana’s own policy implementation! ‘Texas is big’ is hopefully the theme readers are picking up on.”

Texas’ universal FAFSA implementation caused the state to jump up the FAFSA Tracker rankings. Texas finished first overall by year-over-year percent change (just edging out Alabama); their 25.9% increase (49,072 additional completions).

As with the other three states with universal FAFSA, Texas saw considerable growth in the percentage of seniors completing the financial aid form. Texas’ estimated FAFSA completion rate for seniors grew 12.5 percentage points, rising from 50.1% to 62.6%. This also saw Texas make a very large jump up the rankings, from 23^rd last year all the way up to 5^th.

The chart below, with the percentage of seniors completing on the horizontal axis and the percent change year-over-year shows how substantially Texas and Alabama outpaced other states this cycle in terms of growth while also pressing up into the lofty heights by absolute completion. These two states accounted for about 60% of the FAFSA completion gains for the class of 2022. 

The key figures for each of the four universal FAFSA states appears in Table 1 at the conclusion of this post.

Of course, FAFSA completion isn’t the sole goal for universal FAFSA policies. Given the association between FAFSA completion and enrollment, the states considering these policies are also surely hoping for increases to educational attainment. Unfortunately, the small window of years and number of states where these policies exist means the evidence base around their effects on enrollment, persistence, and completion is still nascent. Three academic papers have examined universal FAFSA policies:

• Dr. Ellie Bruecker’s “An Exploration of Financial Aid Application Patterns and College Access: Three Studies Using High School-Level FAFSA Data” examines high school-level increases in college enrollment based on a school’s pre-implementation level of FAFSA completion. Dr. Bruecker finds in part, “a small, but positive increase in college enrollment among schools that experienced the greatest increase in FAFSA completion after the implementation of a mandatory FAFSA policy. This effect is not significantly distinguishable from changes in college-going among schools in the middle two quartiles of FAFSA completion, but it is significantly different from the reference group, schools that experienced the smallest change in FAFSA completion…[T]he reference group experienced a decrease in the college enrollment rate after the implementation of mandatory FAFSA. Thus, while the effect size for Group 1 is 2.9 percentage points, the average college-going rate for this group actually increased by only 0.8 percentage points. Increasing college enrollment to any degree is a positive outcome and should not be discounted. But it is also important that the effectiveness of the policy not be overstated.”
• Dr. Jenni Putz’s “Making FAFSA Mandatory: An Evaluation of Louisiana’s Financial Aid Submission Policy on College Enrollment and Pell Grant Awards” finds “suggestive evidence that students may have substituted away from public two-year institutions towards four-year institutions. Specifically, I find marginally significant effects on enrollment for Black students at large, public four-year universities.”
• Christa Deneault’s “College Enrollment and Mandatory FAFSA Applications: Evidence from Louisiana” finds in part “Back of the envelope estimates imply approximately a 1-2 percentage point increase in on-time college enrollment across all schools in my sample. Instrumental variables estimation indicates that increasing FAFSA completion rates 10 percentage points increases college enrollment rates by 3 percentage points. There is suggestive evidence the treatment effects were larger and more concentrated among schools with a larger percentage of free and reduced-price lunch students, and that applications for merit-based scholarships also increased. I find no evidence that high school graduation rates suffered from the additional requirement.”

NCAN is hopeful that more researchers will work on unraveling the impacts of universal FAFSA policies in current, future, and prospective states. This research will ideally help to clarify not only whether these policies have an impact on students’ postsecondary outcomes but also how. Implementation also matters, and the more the field can understand about what makes for a successful implementation of these policies, from the perspective of practitioners, students, and families, the better.

Until the evidence base becomes more robust, we do have fairly strong evidence around the impacts of universal FAFSA policies on FAFSA completions themselves. These four states, Louisiana, Illinois, Alabama, and Texas, all saw substantial year-over-year increases in FAFSA completions, and all four states now sit in the top ten by percentage of seniors completing. NCAN is committed to monitoring, and reporting on, additional outcomes from universal FAFSA policies in the future.