By enabling students to complete their FAFSA, EITC, and SNAP, we can increase student income on average $8,144 per year.
"In real time, our solution allows you to complete all three applications. Then we help you understand which aid is available to you."
Up$tart does this through developing software that integrates social benefits: the Free Application for Federal Student Aid (FAFSA, for Pell Grants), the Earned Income Tax Credit (EITC, for working students), and the Supplemental Nutrition Assistance Program (SNAP, for low-income individuals and families).
Once these benefits are synchronized, Up$tart plans on adding the Child Tax Credit, Supplemental Security Income, and Veterans Benefits. Eventually, additional benefits, including Medicaid and Temporary Assistance for Needy Families, will be added to the suite.
Up$tart is a new, easily installed, quickly mastered, add-on product to traditional, desktop software used in Financial Aid offices across the nation. Up$tart is modular in design, so as to be easily expanded, but the platform is unique and invaluable for schools. It brings together, without redundancy, the data needed for students to apply for benefits from three disparate, but essential, programs for low income college students.
Offered as an app for smartphones, students will be able to update information without having to visit the financial aid office. Through Up$tart, student individual accounts will be portable, allowing them to transition from community college to four-year institutions as well as graduate school.
We know that navigating Federal Funding is Hard
Federal grants to low-income students are critical for budgeting higher education. Administrators have had to contend with declining state and local support, down 11 percent from 2005-06 to 2015-16. Yet, between the 2011-12 and 2016-17 academic years the number of eligible Pell Grant applicants fell from 61.1 percent to 56.3 percent(from 13.4 million to 10.6 million). In 2016, Pell Grants covered only 60 percent of tuition and fees. The net price of college consumes 84 percent of the income of the bottom quartile of households, which is punishing for struggling families who can't not obtain Pell Grant support. Dwindling average household finances and diminished upward mobility depress aspirations for young adults. 15 percent of Americans who have completed some college say that the American dream is “out of reach,” as do 24 percent with a high school diploma or less.
In 2015-16, the maximum Pell Grant covered only 26 percent of the cost of college, so young adults have borrowed to pay for tuition. Student loans have grown 15 percent from 2013 to 2016, from $29,800 to $34,200. Yet, financial aid for low-income students is unpredictable and fragmented leaving students saddled with increasing educational loan debt.
The time consuming task of applying for aid is hard on families trying to maintain jobs, and home life. At 10 pages,(four times longer than the simplest 1040 form) FAFSA is notoriously complicated. The Internal Revenue Service has constructed a Data Retrieval Tool (DRT), which permits “populating” FAFSA with tax return data from a student’s 1040, but DRT has not always been available. However, DRT will not work with EITC so, working students must apply for the EITC separately.
External sources of income support are not reliable. About one-fourth of eligible households do not receive the EITC. The take-up rate for SNAP varies from 41 percent to 83 percent, depending on subgroup. Because Pell Grants, the EITC, and SNAP are the provenance of “silo” federal agencies, eligibility is established through different applications and rules, leaving low-income students struggling to complete applications, which not only dissuades any from receiving all the social benefits for which they are eligible, but the application paper-chase also detracts from their studies. Bundling applications and providing assistance can increase take-up, thus benefiting low-income students and the institutions they attend.
A reasonable projection is that integrating FAFSA, EITC, and SNAP would increase student income on average $8,144 per student annually.
We’re here to help
First, integrating applications for social benefits for low-income students adds to their income and stabilizes family finances, contributing to an increase of student retention by 5 percent, hypothetically. Beyond benefiting colleges and universities, benefit application integration increases federal revenues to students’ communities and states.
Second, Up$tart software provides training opportunities for students working in financial aid offices who will introduce benefit application integration to Hispanic-serving educational institutions in the Southwest. Versed in Up$tart software, these graduates will be sought after employees at college and university financial aid offices.
Low-income students and colleges face a common dilemma; securing additional funds to support their educational endeavors. While private universities count on endowments to defray rising costs, public institutions have resorted to tuition increases. Although escalating tuition at public universities has slowed, it continues to exceed inflation. Since 2000, the costs of community college increased 28 percent and public universities 54 percent. In the past year, tuition, fees, plus room and board at four-year public institutions nationwide increased 3.1 percent, to $20,770.