By Bill DeBaun, NCAN Senior Director of Data and Strategic Initiatives
As of the end of March, FAFSA applications for the 2022-23 cycle were down 8.9% year-over-year. More specifically, FAFSA renewals from currently enrolled college students declined 12.3%, and renewals from Pell Grant-eligible students plummeted by 15.6%.
These figures come from data released to NCAN by Federal Student Aid (FSA), and they portend very bad news in the short term for college student retention, persistence, and completion rates. NCAN’s interactive dashboard displays this new data.
From Oct. 1, 2021, to mid-January 2022, the number of completed FAFSAs (first-time and renewals combined) faced double-digit declines year-over-year and bottomed out at -23.1% through mid-December. Renewals alone were somehow even more dire, hitting a low of -32.8% at the end of November. Pell Grant-eligible renewals saw their steepest decline at -35.8% in mid-November.
Compared to the pre-pandemic 2019-20 FAFSA cycle, 2022-23 Pell-eligible renewals are down 19.2%, which is an almost inconceivably large number seven months into the cycle.
All three categories (overall applicants, renewals, Pell-eligible renewals) saw their trend reverse after mid-January and have steadily climbed since then. But each group was still substantially in the red at the end of March.
Considering applicant income levels, renewals from students with annual incomes less than or equal to $25,000 have declined 16.5% year-over-year, representing about 420,000 fewer students. Students reporting between $25,000 and $50,000 in income are down 10.1% (about 158,000 fewer students), and students reporting more than $50,000 in income have declined 9.9% (about 269,000 fewer students).
No state has a positive year-over-year change in FAFSA renewals. The average decline is 12.5%, while Indiana has the steepest drop at -17.7%.
NCAN previously analyzed renewal declines during the 2020-21 FAFSA cycle two months into the COVID-19 pandemic. The pandemic caused considerable disruptions to FAFSA completion (among, more broadly, every other aspect of the education system and our lives), but the declines observed through March 2022 in the 2022-23 cycle dwarf those from two years ago. The headline of NCAN’s May 2020 analysis, “Nearly 250,000 Fewer Low-Income FAFSA Renewals This Cycle Nationally” is somehow an upgrade relative to the 420,000 fewer students we currently observe.
These steep declines in overall and renewal applications in the 2022-23 cycle occurred despite the encouraging performance of the high school class of 2022. FAFSA completions for current high school seniors were up 3.9% year-over-year through April 8, driven by strong year-over-year increases by students in high schools serving more students from low-income backgrounds, Black students, and Hispanic students. Another boost came from newly implemented universal FAFSA policies in Texas and Alabama; both states are up more than 20% year-over-year.
What is Driving the Decline in FAFSA Renewals?
There are many plausible explanations for these steep declines in FAFSA renewals, but it’s hard to pin this performance on any one of them.
Structurally, college-going faces some headwinds right now. The hot economy may be having an impact, with starting wages up and perhaps luring students on the margin away from academic programs and into the workforce. Beyond that, there are many factors making college a less feasible or appealing option right now (e.g., virtual classes, vaccination and masking requirements, disruptions from having to isolate when positive, weekly COVID testing). Even more broadly, students may be questioning the value of a postsecondary degree.
Also worth noting is that high schools are having to triage supports to students, with learning loss and academics, mental wellness, and basic needs often getting more attention and investment than postsecondary transitions. Students from the high school graduating classes of 2020 and 2021 may have missed out on supports and foundations that would have contributed to postsecondary persistence and resilience.
More narrowly, NCAN members have noted that the performance of the FAFSA website has periodically been a hindrance over the course of this cycle. Students have experienced outages and error messages and been bounced from the system before submitting their information. Additionally, we note that FSA sent out renewal email reminders later than it did in previous years. It is impossible to believe either of these is a primary driver of the massive declines we are observing, but it is plausible they contribute in some ways that are secondary to the structural challenges shifting students’ choices.
How Can We Help More Students Stay Enrolled in College?
Students still have lots of time to renew their FAFSAs, but this data is especially concerning for what it may signal: a broad shift in students’ intent to re-enroll. Students who leave college with loan debt and no degree face perilous prospects with regard to future earnings and loan repayment outcomes.
NCAN will continue to monitor and analyze this data. In the meantime, we strongly recommend that the K-12 and higher education sectors use their federal pandemic relief dollars (ESSER and HEERF funds, respectively) to focus on postsecondary transitions, retention, persistence, and completion supports, as appropriate. That includes preparing summer melt interventions, contracting with external partners to provide additional capacity where needed, and engaging students to understand how and why their plans might be changing and what we can be doing to support them and keep them enrolled.
In the meantime, institutions, states, and the education field need to examine their enrollment expectations for the fall. As currently projected, far fewer students than anticipated may arrive on campus during the 2022-23 academic year, and that will have significant impacts on those students, their communities, states, and the nation overall.