Tuesday, May 08, 2012
A little nudge toward college
One of the current major public policy goals in the US is to increase the number of students going to college. Historically, children from lower to moderate income families have been less likely to enroll, even if they've done well enough in school that college is a possibility. Money is obviously one barrier, but there is at least some financial help out there in the form of Pell grants (and loans) from the government. The problem? Policy makers have long suspected that the Free Application for Federal Student Aid (FAFSA) has inadvertently become a barrier by being too complicated. So over the past few years, some folks who care about this issue have been running a fascinating study. Many low-to-moderate income families get help with tax prep. Why not have tax professionals help these families with high school aged kids fill out FAFSA at the same time? The results, according to publications of this study, have been positive. When families visiting H&R Block got help filling out FAFSA, their children were more likely to enroll in college vs. a control group that got information about financial aid eligibility, but didn't get any help actually filling out the forms. Going to college is a huge decision, and earning a degree can have a massive financial benefit in one's life. So it's disconcerting that something as simple as a complicated form can have such a deterrent effect. It gets at the point of Cass Sunstein and Richard Thaler's book, Nudge -- that choices can be profoundly influenced by small things, like how easy something is, and whether someone you trust behaves in a way that shows a choice is a good idea. Given how simple this is to have tax preparers help with FAFSA, it seems like a good policy to pursue.