Association for Public Policy Analysis & Management

Recent studies (e.g., Dynarski and Wiederspan, 2013; Bettinger et al., 2012) have demonstrated that the complexity of the U.S. financial aid system for higher education, in particular, the burdens of completing the Free Application for Federal Student Aid (FAFSA), prevents financially-needy students from receiving financial aid. Less attention has been devoted to barriers to financial aid receipt that arise even after a student successfully completes the FAFSA. This study analyzes receipt of financial aid among community students who completed the FAFSA and who, on the basis of financial need and enrolled credits, appear to be financially-eligible for Pell Grants, the federal government's largest need-based college grant program. We do so using detailed financial aid application and award records from the California Community College system. We find that a significant portion of seemingly-eligible students do not receive Pell Grants. While needier students are more likely to receive Pell grants than less-needy (but still eligible) students, we still find that many of the neediest students (those with zero Expected Family Contribution) do not receive Pell grants. We also document large differences in the Pell take-up rate among seemingly-eligible students across community college campuses. We consider various explanations for this phenomenon.