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Financial aid applications are up: Could it be a positive sign for struggling college enrollment?

This article is reprinted by permission from NerdWallet

After a two-year slump in college enrollment, there’s at least one early indicator of a reversal ahead: Financial aid application submissions are up.

The latest federal data, tracked by the National College Attainment Network, or NCAN, show 4.6% more high school seniors completed the college financial aid application compared with 2020.

The application, known as the Free Application for Federal Student Aid, or FAFSA, is key to accessing financial aid that includes Pell Grants, scholarships and federal student loans. Rates of completion among high school seniors typically correlate with freshman college enrollment in the fall.

Prior to the pandemic, the FAFSA completion rate was at 53.8% for the class of 2019. But that rate started dipping in 2020 and hit a low of 49.8% among the class of 2021. The latest spring 2022 data on college enrollments also showed a two-year decline of 7.4% (about 1.3 million students), according to data from the National Student Clearinghouse Research Center.

But the most recent data NCAN analyzed show the rate has increased to 52.1% among the class of 2022. It’s a welcome sign for those who fear pandemic-fueled enrollment declines will be permanent.

What’s going right Boosts in aid applications are highest among schools with high populations of low-income and minority students. Urban schools saw gains, as well. Bill DeBaun, NCAN’s senior director of data and strategic initiatives, says he thinks a more “normal” in-person school experience is making a difference.

“The theory I’m working on is that being back in school reconnected students with a lot of in-school supports,” says DeBaun. By supports, he means in-person interactions with guidance counselors, teachers and peers, which can make the difference between submitting the FAFSA or not.

College enrollment declined by 6.6% from 2019 to 2021, the largest two-year decrease in 50 years. Take a look at how this impacts community colleges, the labor force, and the economy.

The five places in the country with the highest completion rates — Louisiana, Tennessee, the District of Columbia, Illinois and Texas — showcase the range of successful approaches.

Tennessee has one of the more successful free college programs, the Tennessee Promise, that requires the FAFSA in order to access. But that might not tell the whole story, since other states, like Washington, also have free college programs but continue to lag in FAFSA completion.

Meanwhile, Colorado, Illinois and Texas have Universal FAFSA mandates that require applications in order to graduate. Texas, the state with the newest mandate, saw a 25.9% increase in completion over the last year. A few other states have mandates, too, including California, Alabama and Maryland — all of which have had higher overall completion rates compared with other states.

In Washington, D.C., a districtwide FAFSA initiative supports and encourages public high schools and community organizations to increase aid application rates. There are even awards for the most successful schools.

Also see: As prices rise, here are some ways to lower your food bill

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