18 Responses

1. feudi pandola Says:
   November 20th, 2008 at 8:08 am

   I believe we should be using some, but not all, income data from the IRS as a way to determine Expected Family Contribution (EFC) for a student. However, the calculation of the EFC should be modified. Currently, we use adjusted gross income (AGI) as the main driver in this calculation. The problem is that the federal tax code has become so complex and arcane that AGI, in many cases, is not a true reflection of worth. Also, there is,literally, no way to determine the validity of the asset figures on the FAFSA. Still, we should start using IRS data as the main source of income information for the FAFSA for all students. At least that way, all students start from the same verifiable data source. This will be a learning process over several years, but as long as we have an IRS, we should use it for data-driven calculations such as the EFC. It is a fairer, more equitable methodology that we presently have. Most importantly, we must end the disparity in dependency status between the IRS and the U.S. Department of Education. This one issue is the source of more confusion and inequity in financial aid than any other element of the process and it is getting worse as student take longer than ever to complete their education.

2. Charlotte Duke Says:
   November 20th, 2008 at 9:19 am

   I don’t think using IRS data only is a wise idea. This would create possibly more special conditions and professional judgements. The IRS data wouldn’t be able to give accurate data to everyone person’s situation. Although it would be easier it would also be disastrous and unfair!!!!

3. Jan Bass Says:
   November 20th, 2008 at 10:01 am

   I am definitely for simplification, but I don’t think AGI and exemptions give an “accurate” picture of a family’s income. Very wealthy people write off all kinds of income to look poor on the tax return. Untaxed income can make a substantial impact on aid eligibility, and the FAFSA is slowly doing away with collecting that. The foreign income exclusion being removed in 09/10 really bothers me as someone who has been in the aid profession for a long time and see the impact this makes on EFC. We have created a system where more and more people are going to qualify for pell who don’t necessarily need it; however, those that work hard, pay taxes, and live a “middle class” lifestyle continue to be eligible for institutional aid or loans only. I honestly don’t know what the answer is, but didn’t think what was explained at the Dallas FSA conference was the answer; it’s definitely simplification, but won’t be the best way to determine eligibility.

4. Robert D. Shorb Says:
   November 20th, 2008 at 10:15 am

   Although I understand the purpose in trying to make it easier to apply for federal student aid through simplification, I don’t agree with this approach. Simplification will not get federal student aid to the students who need it the most; it won’t be need-based aid eligibility!
   The feds are playing politics! We need to acknowledge simplification equates to determining an eligibility index and not need. For those states and institutions who are committed to help those who need aid will be forced to use another system such as CSS PROFILE or develop their own separate systems to give out aid. This is all going the wrong way. We need to get back to a one form system that we once had, really determine need in an equitable system that is inclusive of financial information and of course, provide sufficient aid to those who can’t afford higher education. A copy of a mortgage application and tax return would tell us a lot more to determine need. For those who are in a category of being the most poor (receiving the federal benefit programs) make it really easy to apply for aid. We can all agree those applicants are the ones left out of the current system.

5. Mavis Gilchrist, University of the Virgin Islands Says:
   November 20th, 2008 at 10:37 am

   I strongly support simplification of the FAFSA and the use of some sort of data match for financial information. However, how the U.S. Virgin Islands, Puerto Rico and other U.S. Territories are not part of the IRS tax system. How would be handle students from these areas? Some sort of system would have to be in place to access students’ financial data from these other tax databases. Any ideas?

6. Jolene Myers Says:
   November 20th, 2008 at 10:56 am

   I think an IRS match may work for some but not all students. There are those who are not required to file and depending on how this is publicized it could confuse them. This is the same population that seems to have a difficult time completing the FAFSA now and if they think the only way to complete a FAFSA is to file a tax return the process just became more complicated instead of simpler.
   There are also those who file late due to extensions. Will they be handled in a similar fashion as they are now by filing a FAFSA with estimated info and the school holds that file until a tax match is completed?

7. Gail Says:
   November 20th, 2008 at 11:45 am

   There are so many factors to consider when discussing simplifying the application process.

   1. What information should be collected from the student and parents?
   2. If the EFC formula is retained, it needs to be updated to reflect the current economy. The EFC formula should also be reviewed every 3-5 years and updated if necessary.
   3. If dependency status is still considered, what questions do we ask to determine dependency? Based on the 13 questions in the 2009-10 FAFSA, maybe all students should be considered independent.
   4. Should number in household be used or should exemptions reported on 1040 be used?
   5. Should number in college be used or should the student on the application be the only student in college considered? How will number in college be verified or does the family self-report as is done currently? If only the student on the application is used, would the student not be eligible for grants?
   6. When will IRS data be available to retrieve? Will it delay packaging?

   Consistency is important to award fairly across the nation. Retrieving data from the IRS, SSA, and DHS could provide more accurate data because some families tend to self-report incorrect information. This incorrect data many times makes the student eligible for the Pell Grant when she actually wouldn’t be. At the same time, states and institutions will have more accurate information to award their student aid.
   The simplified application will help meet the goal of paperless processing. Retrieving data directly from the IRS, SSA, and DHS could reduce verification processing, if not eliminate it.

   In my opinion, exemptions on the 1040 should be considered instead of the number in household. The student on the application should be the only one in college considered.

   As for aid awarded, there should be one grant program with a much larger EFC range, say, 0 to 10,000. There should be one loan program with a 3-5% fixed interest rate and more students eligible for the subsidized loan with much larger annual and aggregate limits. For example: $10,000 1st year, $20,000 2nd year, and $30,000 3rd/4th year with an aggregate limit of $90,000 for undergraduates. Loan limits should be reviewed every 3-5 years and increased if necessary. ED should be in the business of awarding need-based grants and not merit grants such as ACG, SMART & TEACH. Instead, ED should encourage private donors to create scholarships for academic excellence and for teacher shortages. Maybe ED could provide a percentage match similar to the employer match for the 401(k) or 403(b) programs as an incentive.

8. Dr. Parisi Says:
   November 20th, 2008 at 12:53 pm

   I strongly support using the IRS to provide information for the FAFSA. For those students who are on TANF/CALWORKS or SSA and may not file taxes a match should also be in place at the state level to verify their income.

   Those students who do not file taxes or show any means of public assistance should be subject to verification at the insitutiional level.

9. Eugene A Padilla Says:
   November 20th, 2008 at 1:21 pm

   As much as utiizing IRS data will be helpful, it will only benefit those who file thier income tax in a timely manner. If we understand our clients, and we know which population is more likely to complete thier tax return in a timely manner we would probably find that it is going to be the upper to middle class, (those less likely to apply for aid). Although I may be a minority DOE has improved the application process quite a bit over the last 25 years that I have been in financial aid. Where students need assistance is in the colleges and universities where much of the resistance comes from. I think revisiting the methodology is worth while. The complaints about the form have come from high school counselors who are in experienced and unfortunetly influential in dealing with students.

10. Patrick Adamson Says:
    November 20th, 2008 at 2:10 pm

    There would be too many questions left unanswered to eliminate the FAFSA and unless the IRS would allow the Dept. of Ed to initiate an audit on a tax return, you cannot assume that the tax information filed is accurate. As a FAA that works mainly with the verification process, we find many of our student’s have errors on their returns.

    I can’t see any simplification of the FAFSA as long as you have many student aid options that have unique requirements to obtain each aid source. And this would lead to simplification for the schools. If you had only one grant and one loan available, and reduced the qualifications of each, this would simplify processes for a school’s processing.
    If using the IRS data to fill the form, it would be best to have an active link on the FAFSA that a student can use to have the information pulled from the IRS database (whether or not they checked a box on their tax return at time of filing.) There would also need to be a set of c codes in place for those who indicate they will file their taxes, but cannot do so because of filing out the FAFSA before taxes for that year can be filed. A particular ‘CPS’check after October would be needed to go through to flag those who had yet to have an tax return in the IRS system.

11. Don Duzik Says:
    November 20th, 2008 at 2:17 pm

    Before any of these simplification efforts can take place, the FA community will need to come to the realization that the outcome will be different than anything we have seen in the past.

    I have been in FA over half of my lifetime and support the simplification wholeheartedly. These initiatives will bring on a whole new philosophy for how we award federal, state and institutional resources. This will be well outside of many peoples comfort zone.

    As we know, the current system is, in reality, a control mechanism that works within the funding available. The real rub will be how we mesh the new outcome with funds available.

    Until we embrace a totally new outcome, a simpler application process for students will never become a reality.

12. Mary K. Sommerhauser Says:
    November 20th, 2008 at 2:29 pm

    It would simplify the process to have IRS tax information populate on the FAFSA. However, I firmly believe that every student applying for financial aid needs to declare assets. I work on the graduate level, so parental income/assets are not factored in, but we have a number of students who do not make much money in medical school, because they do not work, but hold significant assets, such as trusts or other investments. That should always be figured into the needs analysis.

13. Jo Lopez Says:
    November 20th, 2008 at 2:43 pm

    I would like to see an automated match with the IRS based on student and parental SSN’s; this could be two fold as the FASFA information would be downloaded directly from IRS. It would also eliminate the missing and/or incorrect information listed on FAFSA. As a verification reviewer; I question 20-23 year old students who don’t live at home and don’t have any income. And it would give us the correct marital status of parents. Many parents have remarried but don’t indicate such on FAFSA.

    Basically by signing the FAFSA, it would authorize the Department of Ed to obtain needed financial information (specific line items based off tax form filed and SSN).
    This would also reduce the number of rejected ISIRs because incomplete information is received and/or provided. Based on this, I could see matching/downloading with the IRS very beneficial.

    Students/parents would still have to do a basic FAFSA to answer questions regarding type of tax form and means-test benefits. I can also see many ways the FAFSA could be simplified if the IRS would allow access and/or match information.

14. Brian Kurkjian Says:
    November 20th, 2008 at 4:04 pm

    I think that before any type of matching or advancement occurs to simplify the application process in regards to the FAFSA application, there needs to be more regulation and more accountability on the student’s part and on the Department of Education’s part. Regulation should include organizations such as the social security administration, welfare organizations, etc, to be required to report any untaxed income to the IRS or other government source so there is documented monetary values that can be checked. There is little to no regulation whatsoever when it comes to the FAFSA application and I have yet to hear about the Department of Education conducting its own investigations of possible fraud when it comes to the FAFSA application.

    In working for a for profit school in the verification department for the past four years, I have spoke to many different students who do not want to list their social security or other untaxed income for fear that we (as a school) are going to report that income to the government; thus making them ineligible for other government benefits they’re receiving. Instead of having the FAFSA suggest that student’s not lie on their application, there should be a mandatory retrieval of all income they have received, taxed/untaxed for the prior year after they fill out the FAFSA application. America spends billions upon billions of dollars every year on education and having such a loose regulated organization such as the Department of Education can only lead me to believe that too much of America’s tax money is going into the pockets of people who aren’t eligible to receive it.

    I think the AGI (adjusted gross income) is a fair way of determining ones eligibility; for ‘wealthy people who write off a lot of income to make themselves seem poor’ is honestly ridiculous, that is a very small minority of the student population in the United States. If it is to remain simplified then the AGI is currently the best way to determine a fair eligibility. Simplification from some of the other suggestions suggests that theoretically students should be looked at on a case by case basis to determine their eligibility; wouldn’t this make things more complicated?

    I think that the dependency issues should cease; all students should be considered independent. If you are eighteen years old and are able to obtain a credit card and start building credit, you should be able to get federal aid without your parent’s information being required. I also believe that the PELL grant should cease as well. The money used for the federal PELL grant should be spread among nonprofit organizations that award scholarships for students who are able to perform well scholastically (i.e. essays and such) instead of rewarding poverty. I also like the idea of one loan for all students at a manageable interest rate and eventually ridding need based loans.

15. Lauren Asher Says:
    November 20th, 2008 at 4:10 pm

    You can actually use IRS data to simplify the FAFSA without reducing the amount of income data collected or eliminating the FAFSA. Instead of asking applicants to report what they’ve already told the IRS, just collect the data directly from the IRS. That will shorten the form without cutting data elements.

16. Sean McGivney Says:
    November 20th, 2008 at 5:31 pm

    The fewer lines of a 1040 with actual data, or in other words, the closer one’s AGI is to one’s income from work, the simpler the process should be. Those with capital gains or a “net operating loss carryover” should be required to provide more information on an abbreviated (no more than 30 questions) FAFSA.

17. Jeff Jacobs Says:
    November 20th, 2008 at 6:05 pm

    I support the use of an IRS match with the submittal of a FAFSA. The proposed process would virtually eliminate the verification of tax returns by the institution, which would be a huge benefit to the student. Many students apply late in the year to our school and their aid disbursements is considerably delayed due to the verification process. This delay puts the student at risk of succeeding at the college level.
    The process is confusing enough to many first generation and/or low income students that I see the IRS match as a bridge to simplify the application process.
    However, the changes should not be made in isolation. To further simplify the financial aid process, DOE and Congress should combine all grants into one program, all loans into one program (with increasing loan limits) and one work program. The two step change of IRS match with FAFSA application and reducing the number of programs would be a huge benefit to the student and institution. The students who have suffered greatly with the increased cost of attendance at all colleges is the middle income student. I would also like to see an increase in the income levels for qualifying for the one grant program and increased loan limits for that group of students.

18. wpaul Says:
    May 15th, 2009 at 12:50 pm

    The FAFSA basically only asks for information from a family’s tax return already. Why not simplify this and get the data more efficiently? There are basically 6 questions that make up needs analysis: 1. What’s your AGI? 2. How much did you pay in taxes? 3. How many people are in your family? 4. How many of those are in college? 5. How much do you have in savings? 6. How much do you have in non retirement investments?

    All of that information is on their tax return or derived from the information on their tax return. It takes the feds 90 questions to ask 6.

    Please simplify. If the arguement is to change needs analysis, that’s a different question from the one being posed here. Many more families who don’t currently file the FAFSA because it’s “too difficult” would be eligible if they simply could check a box to submit data to FSA. Seems we could serve a larger population and keep them from paying to file the FREE application for federal student aid.

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