By Catherine Brown, Senior Director of Policy and Advocacy
Reading time: Four minutes
A new longitudinal study provides striking evidence of the power of need-based financial aid to help students from low-income families
achieve upward mobility. The study, commissioned by National College Attainment Network (NCAN) member the Washington Student Achievement Council, looked at earnings three years after college graduation
for students who received need-based financial aid in Washington state. It found:
Students from the lowest-income families were earning more than their family income, whether they received an associate or bachelor’s degree.
Students from the lowest-income families who received a bachelor’s degree were earning more than twice as much as their family income.
Black, Latino/a, Native American, Asian American, and English language learners all experienced significant increases in intergenerational economic mobility.
Overall, the study found, “strong evidence that a postsecondary education is a great intergenerational economic equalizer.”
The new research examined education and employment records in Washington state from 2008 to 2019, matching student
and family earnings with financial aid records and degree attainment to gain a clear picture of economic impact of attaining an associate or bachelor’s degree. They found that, “a striking pattern emerges across all subgroups.” Black, Latino/a, Native
American, and Asian American students, as well as English language learners, advance substantially up the “intergenerational rank” in the analysis.
The findings illustrate that the impact of need-based financial aid is most powerful for
students with the greatest need. Students from families in the bottom quartile of family income – regardless of whether they received a bachelor’s degree or an associate degree – were earning more than their family income just three years after graduation.
Students who were non-native English speakers earned almost the same amount as students who are native English speakers three years after graduating.
“The striking consistency of upward mobility across the most disadvantaged demographic
groups suggests that completing a postsecondary degree is an essential lever for improving intergenerational economic opportunities. Without financial aid, many of these children may have never enrolled in a postsecondary institution or earned a degree
to achieve these gains,” the study’s authors write.
Those who attained a bachelor’s degree saw the biggest earnings boost. Students from the lowest-income families who received financial aid and attained a bachelor’s degree were earning
an average of $45,176 three years after graduation, two and a half times their combined family income.
Washington State Financial Aid
Washington state’s need-based financial aid programs support a large proportion of students from low-income backgrounds attending public colleges in the state. Nearly 70% of students attending four-year colleges and one-third of students at community
colleges receive aid through the programs.
The largest need-based financial aid program in Washington is the Washington College Grant (WCG). This program has many features that may
make it a model state financial aid program. The program is:
Well-targeted and generous relative to many other state programs, providing up to $11,705 for students from low-income backgrounds attending the University of Washington full-time.
Award levels are determined based on a sliding scale that considers family income, size, and type of institution the student is attending.
Students from families earning up to 60% of the state’s median income receive the maximum award while students from families earning 100% of the state’s median income receive one-tenth of the maximum award.
Available to students who complete the FAFSA, requiring no separate application.
Available to students of any age.
Available to students who are undocumented.
Available to students who are attending college part- or full-time.
Transparent and predictable.
The state provides a simple-to-use early awareness tool called the financial aid estimator, which allows prospective students to find out how much they are likely to receive
from the WCG and the federal Pell grant combined.
The state also publishes simple tables that show average award sizes by income level and family size, allowing students and counselors to see how much students are likely to receive from
the state.
State spending on financial aid is at an all-time high in dollar terms and as a percentage of state appropriations. Since 2001, states have nearly doubled the proportion of higher education spending
that goes to state financial aid programs, from 5.5% to 9.1%, while spending on higher education overall has remained stagnant.
As states grow their financial aid budgets, it’s critical that they design programs that reach the students
with the greatest financial need. Today, only two-thirds of state financial aid is need-based. This new study of Washington state builds on the growing body of evidence demonstrating that well-designed financial aid programs can increase postsecondary attainment, drive upward mobility,
and create a fairer society where every student has a chance to advance up the economic ladder.
Email to a Friend