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Though often in more financial need, community college students apply for financial aid in substantially lower numbers than their counterparts at four-year institutions.

A report from the College Board’s new Advocacy and Policy Center finds that 76.8 percent of students eligible to receive Pell Grants at four-year public schools complete the Free Application for Federal Student Aid (FAFSA) while only 57.8 percent of those at community colleges do.  Out of all community college students, only 42.5 percent apply for federal financial aid. 

This discrepancy could make it difficult for schools to meet their and the Obama administration’s goals for college graduation.  Since low income students are often more reluctant to take out loans, many who aren’t aware of financial aid options may simply avoid finishing school.  Others may choose to attend school part time or work a substantial number of hours which makes it much more likely they won’t graduate.

The study recommended that schools take a number of steps to improve financial literacy among their students including debt counseling, involving families more and linking application forms to the FAFSA form. 

While the situation appears bleak, some colleges have been able to see substantial improvements with reforms.  After the Connecticut Community College System streamlined its financial aid process, applications for financial aid jumped by 25 percent. 

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