Download Full Report -- http://www.americanprogress.org/issues/2011/08/pdf/lgbt_higher_ed.pdf

Washington, D.C.—As college students pack up to head back to school and high school seniors begin to think about their college prospects, the Center for American Progress released a report today entitled, “Unequal Aid: Discriminatory Treatment of Gay and Transgender Applicants and Families Headed by Same-Sex Couples in the Higher Education Financial Aid Process,” finding that the federal government’s application for financial aid does not fully recognize families headed by same-sex couples and often renders them invisible. What results is the discriminatory misallocation of federal, state, and private dollars for higher education based on sexual orientation or gender identity—characteristics completely divorced from an applicant’s actual need for financial aid.

For some, biases inherent in the financial aid process result in less financial aid and in doing so, the system robs applicants otherwise deserving of financial assistance for higher education simply on the basis of sexual orientation. But for others, these biases actually result in more aid to finance a student's education because they or someone in their family is gay. In either case, the system clearly distributes higher education financial aid in an inefficient and ineffective way that is unfair to students, families, and American taxpayers.

Sixty-six percent of all undergraduate students received some type of financial aid during the 2007-08 school year and the average amount of aid received by those students was approximately $9,100—$6,600 of which came from federal sources. Consisting largely of federal assistance, financial aid packages can mean the difference between a college education and none at all. As higher education is the driving force behind a nation’s competitiveness and ability to innovate in an increasingly technological and global economy, more educated societies tend to result in larger, more successful economies with higher standards of living. With most financial aid providers relying on the Free Application for Federal Student Aid, or FAFSA, this unequal treatment hurts America.

Federal and state lawmakers and officials in the Department of Education should address these issues head on. Lawmakers should repeal federal- and state-level laws that unfairly discriminate against gay and transgender individuals and families headed by same-sex couples. Officials within the Department of Education, as well as financial aid administrators at the more than 6,000 institutions receiving federal aid, should study this issue further and do what they can under existing law to reform the financial aid system to make the application process more uniform, clear, and expedient for gay and transgender applicants and their families.