Community colleges play an important role in bachelor's degree attainment, especially for the most economically vulnerable students. However, the community college pathway to a bachelor's degree is not as strong as that of students who begin at a four-year institution. Strengthening this pathway is a necessary means to improving America's ability to remain competitive in a global economy. Applying for financial aid is essential to the academic success of low- and moderate-income community college students. Many bypass application and attempt to fund their education through work and, sometimes, loans. Unfortunately, many such students do not realize that taking advantage of available federal grant aid can be of significant financial benefit to them. Understanding both the role of financial aid at community colleges and student failure to apply for aid is key to identifying methods of encouraging more students to apply for and receive aid. Students must apply to succeed, yet when full-time students intending to transfer from a community college to a four-year college were asked why they did not apply for financial assistance, several reasons were given, including: (1) They thought they were not eligible for financial aid (39 percent); (2) They had sufficient funds to pay for college expenses (35 percent); and (3) They found the financial aid application form too complex (6 percent). This report explores those reasons, describes "The College Cost Reduction and Access Act (CCRAA) passed by Congress in 2007 to encourage community college students to apply for aid. and suggests policy implications. Appended to this document are: (A) Community College Financial Aid Administrators Phone Interviews; (B) Income Distribution of Aid Applicants by Dependency Status; (C) Advisory Committee Members and Staff Advisory Committee Members; and (D) Authorizing Legislation. (Contains 8 tables and 21 endnotes.)