Determining Aid Eligibility Based on Prior-Prior Year Tax Information - Year 2

The persistently low college enrollment and completion rates of youth from poor families are partly attributable to their uncertainty about whether college is affordable. In the current system, concrete information about college costs arrives at the end of high school and is only available to those who complete a complex application. Evidence suggests this timing affects students’ motivation and ability to adequately prepare for college.

We evaluate the feasibility of addressing this problem by using a simplified eligibility process to make an early commitment of the full Pell Grant to 8th graders from needy families. Our analyses suggest substantial benefits relative to the predicted costs. Our simulation of the estimated fiscal effects suggests that Pell program costs would grow by approximately $1.5 billion annually and the benefits would exceed the costs by approximately $600 million.