Making crucial aid easier to access and use

Affordability and Financial Aid in College

According to the US Census Bureau, college graduates earn almost twice as much as those with only a high school diploma over the course of their lifetime and are significantly more likely to be employed. This means they are better able to support themselves and their families. A larger pool of college graduates also helps to strengthen the U.S. economy by increasing tax returns and consumer spending power and building a more educated workforce that can compete on a global stage. 

But the reality is that not everyone finds it easy to make the most out of opportunities in higher education. According to the U.S. Department of Education, less than half of low-income high school seniors who intend to go to college end up enrolling, and just one in 12 graduate with a degree by age 24. Less than 60% of full-time students graduate from four-year colleges within six years, and less than 30% graduate from community colleges within three years. 

This section of our larger portfolio of postsecondary work, detailed in the report Nudging for Success, focuses on applying behavioral science to affordability and the financial aid application process.

Affordability and Financial Aid

In addition to academic options and potential career paths, one of the biggest considerations for many students making the complex decision whether (and where) to attend college is affordability. With tuition and other direct school-related costs (books, fees) to consider, not to mention general living expenses like room, board, and transit, deciding how to pay for college is one of the most significant financial decisions a student can make. To make college more affordable, American students can access federal financial aid and need-based grants. Yet national statistics show that around the country, students leave more than $2.7 billion in free federal grants unused each year, simply because they do not apply for them.

Behavioral science tells us that future deadlines can be easy to forget and hard to accurately plan for. In addition, students can find it daunting to collect all of the detailed financial information they need to apply (or to fill out the long application). And for those who successfully apply for student loans, it can be difficult to know how much to borrow. Some students may borrow more than they need, making repayment more onerous later on. Other students may underborrow, turning to more costly methods of paying for education.

Unfortunately, research has shown that students who don’t tap into financial aid opportunities are more likely to falter before college completion, or fail to begin college at all. But even once students have navigated the hassles involved in securing the funds needed to cover tuition and expenses, they must continue to make smart decisions about how to manage their money throughout the year. These financial challenges consume mental bandwidth, making it very difficult to succeed academically.

Our work applying a behavioral lens to matters of money on the college journey yielded key insights that can help students at multiple points in the process. For example, we found that timely reminders about critical, but often overlooked, deadlines for financial aid filing can lead to significant increases in the amount of aid students receive. Another insight we discovered is that changing the manner in which students are presented with loan offers can both increase borrowing and improve academic outcomes.

Paying for college is a big part of the student journey and a major concern for many students and their families. Using behavioral insights to help students navigate complex financial decisions can make their journeys smoother and free them up to focus on their studies.

Interested in learning more about our work applying behavioral science to the post-secondary education space? Reach out to us at or tweet at @ideas42 to join the conversation.