The Link Between Financial Aid and College Access 

 Financial aid is crucial for making higher education accessible to students. As tuition and attendance costs have surged over the past several decades — largely due to declining state spending on public colleges and universities — students and families have shouldered more of the financial burden and increasingly rely on aid to afford higher education. Without it, many students from low-income backgrounds would be unable to pursue and complete a college degree. 

 The Decline of Federal Financial Aid Support 

Unfortunately, federal financial aid hasn’t kept pace with rising college costs. The Pell Grant, the nation’s key need-based financial aid program, has lost substantial purchasing power over the years. In 1975, the Pell Grant covered over 75% of the total cost of attending a public four-year college; today, it covers only about one-third. 

 Making matters worse, the Trump administration’s attacks on scholarships and aid for students from underrepresented racial backgrounds, its attempts to abolish the U.S. Department of Education, and the passage of the “One Big Beautiful Bill Act” (OBBBA) have further undermined federal financial aid and loan repayment systems. The OBBBA makes minor changes to Pell Grants eligibility, restricts Parent PLUS borrowing, and raises the costs of student loan repayment.  

 The Growing Importance of State Financial Aid Programs 

 With federal support shrinking, the role of states in providing financial aid and ensuring postsecondary access and affordability has become more vital than ever, a new EdTrust report finds. The report, An Overview of State Financial Aid in Indiana, Illinois, and Minnesota, notes that state policymakers have a strong interest in ensuring that recent high school graduates can pursue higher education and obtain their degrees or credentials locally. Postsecondary attainment benefits state economies by:  

• Boosting gross domestic product (GDP) 

• Creating jobs and expanding the tax base 

• Increasing home values and investment in infrastructure 

• Reducing lifetime government expenditures — by an estimated $82,000 less for college graduates compared to those with only a high school diploma 

State Financial Aid Programs in Illinois, Indiana, and Minnesota 

The report examines state financial aid systems in Illinois, Indiana, and Minnesota, focusing on how effectively their programs meet students’ needs. Using a student-centered framework, it analyzes how aid is distributed among need-based, merit-based, and combination aid programs.  

 It also highlights state policies that expand college access among high school juniors and seniors, showcasing successful strategies that promote college attendance.  

 Recommendations for Strengthening State Financial Aid Systems 

 The report urges state policymakers to design financial aid programs to be more student centered and need based as federal support declines. To make higher education more affordable and accessible, state policymakers should:  

1. Prioritize need-based funding for students who are least able to pay and ensure that it can be used for costs beyond tuition and fees  
2. Ensure that financial aid eligibility requirements provide access to all students at public colleges — including part-time, returning, and justice-impacted students, adult learners, those who are undocumented, and students in default 
3. Implement and expand college access programs and policies that improve readiness and college attendance, reduce barriers, and ensure those programs and policies are adequately funded 

Download The Report

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Photo from Allison Shelley/Complete College Photo Library