October 27, 2021

Less Than Half of MN Students Completed the FAFSA. It’s Time for State Action.

By Krista Kaput

For the Minnesota class of 2021, only 48% of seniors filed a Free Application for Federal Student Aid (FAFSA)—a form that determines current and prospective college students’ financial aid eligibility. This puts Minnesota at 38th in the nation. And, we’re doing even worse for some student groups: just 22% of Indigenous, 27% of Latino, 38% of Black, and 41% of multiracial Minnesota students completed the FAFSA. 

In response to these low filing rates and gaps, earlier this month, the Minnesota Office of Higher Education (OHE) announced a new state goal to increase FAFSA filing rates by five percentage points every year for the next five years, with a focus on closing FAFSA filing gaps for students of color. 

Why FAFSA Completion Matters

Low FAFSA filing rates don’t just reflect gaps in other areas. Instead, they can contribute to exacerbating them as students move on from high school. FAFSA completion rates are positively correlated with college enrollment and can be important early indicators of postsecondary access and success by opening up student aid opportunities and helping to remove financial barriers. 

Ultimately, FAFSA completion ensures that students who are eligible for federal aid—Pell Grants, subsidized student loans, work-study, and state aid programs—receive the money that they are entitled to pay for college. However, it’s estimated that at least $2.3 billion annually is left on the table because students did not realize they would’ve been eligible for aid. In some cases, students may be eligible for significant support, and completing the FAFSA can help map out a path they may have otherwise assumed was unaffordable.

States Take Action to Increase FAFSA Completion 

The issue of low FAFSA completion rates is not unique to Minnesota. In fact, seven states have taken legislative action to address the issue. In 2015, Louisiana became the first state to pass a law requiring students to complete the FAFSA as a prerequisite for high school graduation, starting with the class of 2018. And the policy has been highly successful. Louisiana is now first in the country for FAFSA completion, with high schools increasing FAFSA completion rates amongst graduating seniors by 19 percentage points. More notably, college admissions have increased as well. 

And, how is the policy working from an equity lens? The effects were more concentrated amongst schools that had larger populations of low-income students, and researchers didn’t find any evidence that the policy created a barrier to high school graduation. On the contrary, they found that high school graduation rates increased. 

In 2019, Texas and Illinois also passed FAFSA completion policies and, in 2021, AlabamaColoradoCalifornia, and New Hampshire followed. 

Next Steps for Minnesota 

During the 2021 legislative session, a bill was introduced in the House that would have required FAFSA completion for high school graduation. It would have also required the Department of Education and Office of Higher Education to convene a working group to make recommendations on supporting schools and students to fulfill the FAFSA completion requirement. While no action was taken on the bill, given the low Minnesota FAFSA completion rates and gaps, this policy is worth considering in 2022. While local work can continue to happen in the meantime, it’s clear that setting the bar at the state level can positively impact and ensure action across every district so that no students are left behind.

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