FAFSA Completions Are on the Rise. Will Enrollment Follow?

New data showing increases in Free Application for Federal Student Aid (FAFSA) completions may provide a positive sign for colleges frustrated by ongoing enrollment declines.

FAFSA is the document any prospective student must complete if they hope to secure federal financial aid, including student loans, while attending college.

Through July 1, the National College Attainment Network’s (NCAN) Form Your Future FAFSA Tracker shows that the percentage of high school seniors who completed the application was up 4.6% from 2021, representing approximately 92,000 additional applications.

The percentage of seniors who completed the FAFSA in 2022 (52.1%) is higher than at this point in 2021 and 2020, NCAN said. However, it still falls short of the pre-pandemic 2019 completion rate (53.8%).

Bill DeBaun, NCAN’s senior director of data and strategic initiatives, told BestColleges that FAFSA completion is the best indicator researchers have in predicting future enrollment.

Considering there was a 4.8% decrease in the FAFSA completion rate in 2021, he said this year’s 4.6% increase may return first-time enrollments to 2020 levels. DeBaun clarified that this is all speculative and that it’s difficult to make sweeping predictions without finalized federal enrollment data for newly graduated high school students for the fall 2021 semester.

“I think it’s fair to expect a rebound,” he said. “Where we see FAFSA [completion] change go up, we tend to see enrollment rates go up from the previous year, too.”

FAFSA completion, historically, is most indicative of enrollment trends for lower-income students, DeBaun said.

He pointed to NCAN data that showed that the lowest-income high school students who completed the FAFSA enrolled in college immediately after high school 85% of the time, compared to 37.4% enrollment among those who did not complete the FAFSA.

Meanwhile, the data shows that students from the top 20% income bracket enrolled in college after high school 97.8% of the time after completing the FAFSA, compared to 83.8% for those who didn’t.

This could be another good sign for future enrollments, as the 2022 increase in FAFSA applications was driven by students from high schools serving largely low-income households.

According to NCAN, students from low-income schools were 9.1% more likely to have submitted the FAFSA than at this point last year. There was a similar increase (9%) in students from schools with a higher percentage of minority students.

DeBaun told BestColleges that there are currently four states with policies in place that require students to submit the FAFSA to graduate:

These policies, referred to as a “universal FAFSA completion policy,” are relatively new. They have, however, already driven large year-to-year increases in completions.

Texas, for example, saw its FAFSA completion rate rise 25.9% in 2022. Alabama’s rate jumped 24.9%. All four states rank in the top 10 among states with the highest percentage of seniors completing the application in 2022.

The newness of these policies makes it difficult to determine how correlated they are with increases in enrollment, DeBaun said. Some research from Ellie Bruecker, Ph.D., of the Seldin Haring-Smith Foundation and Christa Deneault of Cornell University suggests a small positive correlation.

“Back of the envelope estimates imply approximately a 1-2 percentage point increase in on-time college enrollment across all schools in my sample,” Deneault wrote. “Instrumental variables estimation indicates that increasing FAFSA completion rates 10 percentage points increases college enrollment rates by 3 percentage points.”

Large increases in FAFSA completions paired with smaller correlation to enrollment may taint how reliable an indicator FAFSA completions are to future enrollment, DeBaun said. California is slated to be the next state to implement a FAFSA completion policy.