Are Free Lunches the Obama Administration’s Financial Aid Simplification Policy?

Politico’s Morning Education newsletter reported today that First Lady Michelle Obama will announce that all school districts with at least 40 percent of students eligible for free or reduced price lunches (FRL) will be given funds so all students in the district receive free meals. Currently, districts can get federal funds to give all students free meals if a much higher percentage of students is FRL eligible; lowering the threshold has the potential to reduce the stigma of receiving government benefits.

But from a higher education perspective, making more students eligible for FRL could have substantial implications for federal financial aid policy. Under current rules, students who had a family member receive FRL in the last two years would be eligible for a simplified FAFSA (eliminating parent and student/spouse asset questions) for the 2014-15 academic year if family income was below $50,000 in the previous year. That student could be eligible for an automatic zero EFC (and the maximum Pell Grant) if a family member received FRL in the past two years and family income was below $24,000 in the previous year.

This announcement means that some students in high-poverty schools may be able to file a simplified FAFSA as a result of now receiving FRL. FRL eligibility currently goes up to 185% of the federal poverty line, which was about $43,500 per year for a family of four in 2013. Students from families making more than 185% of the federal poverty line but less than $50,000 may now be able to file a much shorter and less intrusive version of the FAFSA. This policy change has the potential to increase access and potentially even financial aid awards for some students, and the resulting natural experiment should be rigorously examined.

The meaning of this change for early commitment programs, in which financial aid is tied to a student’s circumstances well before entering college, are less clear. For example, consider the idea that Sara Goldrick-Rab and I proposed of an early Pell program based on eighth grade means-tested program receipt (forthcoming in The Journal of Higher Education).  Granting universal free lunch eligibility to all students in a district may result in higher-income students becoming Pell-eligible based on their district of attendance. This may not be a bad thing (particularly if it voluntarily encourages more socioeconomically diverse schools), but it would reduce the program’s targeting and increase costs. Perhaps an income limit would need to be considered to gain eligibility in eighth grade.

I’ll be keeping an eye on this policy development and how it could affect financial aid policy going forward.

Author: Robert

I am an a professor at the University of Tennessee, Knoxville who studies higher education finance, accountability policies and practices, and student financial aid. All opinions expressed here are my own.

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