Dive Brief:

• Federal policymakers should strengthen need-based aid — such as by permanently indexing the Pell Grant program to inflation rates — to help low-income students pay for college, contends a new report from the Institute for Higher Education Policy (IHEP).
• Colleges and policymakers also should do more to target financial aid to the neediest students, IHEP says, suggesting increasing Pell money and giving colleges with more low-income students a larger share of Federal Work-Study funding.
• A standard template for financial aid offers could help students better gauge college costs, the report says. Policymakers should also improve public program-level data around expected debt and earnings. 

Dive Insight:

IHEP interviewed 17 "low-income and working-class" students to understand the challenges these groups face during college. Most of those interviewed said their aid was critical to helping them stay in college. However, it often wasn't enough to cover their full cost of attendance, forcing them to make ends meet by leaning on friends and family, taking out loans, working more and cutting back elsewhere, including skipping meals to lower food costs. 

Their experiences reflect those of many other students. In 2016, the average student had nearly $9,000 in unmet financial need. Meanwhile, black and Latino students tend to shoulder greater amounts of unmet need than white students, and student-parents more than students without children, according to data cited by IHEP. 

IHEP contends increasing funding for need-based aid is the best way to make college more affordable. In the meantime, however, it says colleges can fill in the gaps by providing stipends for course materials; helping students apply for the Supplemental Nutrition Assistance Program; and offering emergency grants for those who experience unexpected costs. 

Colleges can also do more to help students navigate the process to obtain financial aid. Prospective students can be confused by the options, while current students may be unable to estimate expenses accurately because their aid package differs from year to year, IHEP explains.  

In 2018, 661,000 low-income high school graduates left $2.6 billion of financial aid on the table because they didn't fill out the Free Application for Federal Student Aid (FAFSA).

A separate study found that around one-third (32%) of students who didn't fill out the form said they didn't think they were eligible for aid, while about one-fourth (23%) said they didn't know how to complete the paperwork. As such, some colleges are providing high school students with information about the FAFSA to encourage them to apply. 

Meanwhile, some colleges are bringing more stability to college costs. Trinity College, in Connecticut, announced last year that it will soon provide low-income students with a four-year aid package that will keep their net price consistent regardless of changes in government support.