Many eligible students never apply for financial aid, new report finds.

WASHINGTON -- Large numbers of community college students who are eligible for financial aid do not apply for the assistance, according to a new report.

The Advisory Committee on Student Financial Assistance, a panel established in 1986 to advise Congress and the Secretary of Education, said the nation lacks data to determine the precise number of students who fail to apply, or a firm understanding of the reasons why.

Those are among the findings contained in the report Apply to Succeed." Ensuring Community College Students Benefit from Need-Based Financial Aid.

The report concludes a "comprehensive strategy must be designed to identify eligible students and ensure that they apply for aid."

It also reports that potential applicants and others have a poor understanding of provisions of the College Cost Reduction and Access Act passed by Congress last year.

"No coordinated effort has yet been made to inform students or institutions regarding the level or distribution of increased eligibility," the report concludes.

College aid administrators reported to ACSFA that they're too busy to explain the rules to individual applicants, though some say they could e-mail students, informing them about changes in financial aid eligibility. But that won't help everybody, the report said, because some financial aid officials "believe it is also important to reach the general population so as to capture any would-be students previously uncertain they could afford to attend."

Some directors suggested that the federal government launch a nationwide public information and marketing campaign.

Community college students can be more difficult to reach than students at four-year schools. Two-year students have different enrollment patterns; some enroll on the spur of the moment and might not be aware of financial aid eligibility and rules.

The report also identified a potential flaw that undermines efforts to widen the pool of applicants. Specifically, families filling out a 1040A or 1040EZ tax form--rather than the standard 1040 form--can more easily qualify for an automatic zero expected family contribution.

To qualify for auto-zero, applicants must verify their need either by showing a 1040A or 1040EZ tax form, or demonstrate eligibility for a federal means-tested benefits program.

"While the use of federal means-tested benefit programs as a low-income status is usually effective because applicants are aware of their participation, the use of the tax form as a measure is not," the report said. Applicants who choose a 1040 tax form can't qualify for aid through that form alone, the report said.

ACSFA reported that all of the 45 community college financial aid administrators who were interviewed said professional tax preparers steer clients to file the 1040, not telling clients they can file a shorter form.

Financial aid officials, high school counselors, students and prospective students all are struggling to understand new rules, especially since so many were enacted recently. In addition to expanding tax benefits, Congress also enacted new TEACH Grants and Academic Competitiveness Grants. All the programs can benefit community college students, but they make the situation more confusing, the report said.

ACSFA also fears that low-income people struggling to put themselves through college "might believe they can use earnings to pay tuition and related expenses without realizing that aid helps to defray these costs, allowing them to work fewer hours and dedicate more time to studies." Some people also may mistakenly believe that they can't apply for financial aid because they work.

ACSFA said that several states--including California, Nevada and Texas--have undertaken major campaigns to encourage students to apply for aid.

It suggests that the U.S. Department of Education send emails to people who previously submitted a Free Application for Federal Student Aid to tell them that they may qualify now under new rules, even if they were rejected before.

The report also challenges colleges to collect better information--suggesting, for instance, that they match enrollment information with Institutional Student Information Record data to see who didn't apply for aid then inquiring why not.

Find the report at www.ed.gov/about/bdscomm/list/acsfa/applytosucceed.pdf.