Continuing the Conversation: Simplifying the Application Process
May 19, 2009 5:37 am SimplificationThe complexity of the student aid programs and the application process make it difficult for students and parents to predict how financial aid they should expect and discourages students from applying for aid. In addition, the complexity creates large administrative burdens for campuses that must direct scarce resources to administer financial aid, when these resources could be more effectively used to benefit students.
“I’ve spent most of my career making poor kids prove they are poor,” a financial aid administrator recently commented to NASFAA, highlighting how the current complexity of the system is causes inefficiency and frustration.
NASFAA’s National Conversation Initiative (NCI) Preliminary Recommendations Report makes eight recommendations to simplify the application process to eliminate the problems caused by the current complexity. The system envisioned by NASFAA would reduce the number of questions on the FAFSA by 70 percent - from 106 questions to roughly 30 questions - and 10 of these questions would be simple demographic questions such as: name, address, date of birth, etc. The nation’s neediest students would auto-qualify for maximum aid – so their application process would be even simpler. NASFAA also recommends that financial data be gathered through data matches from other sources, such as the Internal Revenue Service (IRS).
The result would be a dramatically simplified student aid application process that makes it easy to determine and understand eligibility and more families to apply for the assistance they may qualify to receive. At the same time NASFAA’s model would effectively differentiate truly needy students from those who merely appear needy on paper to ensure integrity in the student aid system.
The following are NASFAA’s simplification recommendations:
1. Streamline the FAFSA application so that it collects only demographic, student eligibility, and dependency status data
2. Students and their families who are not required to file taxes due to low income, or who receive means-tested federal benefits, should automatically qualify for the maximum Federal Pell Grant
3. Give schools the option to waive reapplication every other year for individual students or for groups of students whose circumstances have not changed significantly, as identified by the institution
4. Allow families to initiate the financial aid application process through the federal tax system
5. Provide look-up tables for students and families to show them how much they would qualify for in Federal Pell Grants and loans
6. Eliminate “needs analysis” and use an “eligibility analysis” that relies on Adjusted Gross Income and tax exemptions to determine the amount that financial aid applicants can expect to receive in a Federal Pell Grant
7. Use relevant tax schedules for independent students or parents of dependent students to gain a more accurate picture of their financial aid eligibility
8. Eliminate all non-financial aid related questions from the application process,( e.g., Selective Service Registration, drug convictions)
May 19th, 2009 at 7:51 am
Love the simplification of the application. But again, it looks like a socialism agenda to me. Middle income families do not have a chance.
May 19th, 2009 at 7:59 am
“Eliminate “needs analysis” and use an “eligibility analysis” that relies on Adjusted Gross Income and tax exemptions to determine the amount that financial aid applicants can expect to receive in a Federal Pell Grant” - eliminating needs analysis will not solve the problem of making higher education more affordable. The process is to allocate TAX PAYER funds (Title IV aid) equitably to all those seeking assistance. We need congress to adjust the formula to reflect current situations (for example the income protection allowance or the state and local tax allowance) and not throw the formula out the window. We need to stop helping the wealthy with merit aid and extremely low income families with more federal grants. The student is who is hurting the most are the low- to middle-income families who do not qualify for federal grants because of need or merit aid because they lacked the opportunity to study at a better quality school system. Let us make higher education more affordable and not another entitlement program. Higher education is a privilege not a right!
May 19th, 2009 at 8:06 am
Hello, Like many financial aid directors we admire the idea of reducing the amount of questions on the FAFSA; however will the IRS match verify both parent and student tax information? How will assets be identified? Many state grant programs require the student to have been a resident for more than 2 years how will we verify that in the future? I did not see household size or # in college on the new version will there be new guidance? I realize this form is preliminary however am concerned about the additional burden it could place on financial aid staff with additional verification requirements.
May 19th, 2009 at 8:08 am
As a financial aid professional at a private institution with significant need-based funds, I am concerned about the unspoken details that are mentioned with this draft. What does “Students and families who file tax forms with tax schedules that demonstrate significant assets may need to have their AGI adjusted” mean? How would it be adjusted? Who makes the adjustment? Based on what? Why aren’t those details part of NASFAA’s announcement?
We find that applicants have a difficult time distinguishing between SSI benefits and regular Social Security benefits. Many think that because they receive any type of SS benefits they can answer Yes to the SSI question. There should be a match performed with the SSA administration to verify the type of benefits the family receives. We change the response to SSI for at least ½ of our applicants that answer yes to the item after we receive documentation of the type of benefit.
How will states collect the information they need to process financial aid? Over simplification will lead to development of other financial aid applications and make the process more confusing.
I definitely support using IRS tax data verification, but couldn’t it go a step further and just pull the income data from the IRS? I understand that entering into an agreement with the IRS to obtain tax information is fraught with IRS concern, but shouldn’t the ultimate goal be to eliminate income reporting on the FAFSA all together if a tax return was filed?
I realize this is a draft and something to continue in conversation, but please be open to all stakeholders concerns.
May 19th, 2009 at 8:33 am
I am concerned that the expectation of providing the neediest students with an early estimate of their eligibility for aid (Pell Grants and Loans) does little to address the problem of informing students about how much aid they can expect for college. In reality, even for the neediest students, knowing the amount of Pell Grant they will receive still leaves them wondering where the rest of the funds will come from. Since most aid received by a student comes from the institution, either in institutional aid and/or state and federal campus based aid, in order to give the student a realistic expectation of aid we must come up with a way to also provide an estimate from the instiutional sources. This will be a much more difficult task to achieve, however, I am confident that the financial aid community has the knowledge and resources to come up with a solution.
May 19th, 2009 at 9:14 am
As a financial aid professional with over 20 years, I applaud “simplification”, but I recognize that simplification at one level is complication at another. We have all experienced those unfunded mandates that added work on the financial aid office. At the higher level, the promulgators of the “simplification” could boast of their accomplishments while we made the changes work to support the student and assist them in getting the aid they need while insuring that auditors had no opportunity to generate “findings”. This simplified FAFSA, without basic changes in the laws and rules surrounding the various programs, will simply force the schools to expand the data collection forms we use to satisfy informational needs. As expressed by others, requirements for verification will have to be revised or eliminated by electronic means of collecting the data from the agencies that have it already. The “prior prior year” concept has been discussed for years and nothing has come of it. In addition, the recently passed HEOA will have to be re-tooled to fit a simplified FAFSA.
While simplifying, why not have one grant, one work-study and one loan program? I know it would reduce the number of programs that a Congressman could put his name on but it would be simplification.
May 20th, 2009 at 9:14 am
Okay, looking at one item at a time:
1. Will work just fine as long as all stakeholders, institutions, states, etc. agree to base eligibility on the same set of data.
2. Not a quantum change from current practice. Could probably be done with relative ease.
3. Bad idea. It is already confusing enough for students transferring, etc. due to differing institutional financial aid practices. Consistency in the annual application process should be maintained.
4. Should work if we can get the IRS and Dept. of Ed to play nice together.
5. Might work for Pell but probably not for loans as varying cost of attendance would impact loan eligibility. This would put schools in the ever unpopular position of saying “I know that is what the chart says but it is wrong.”
6. AGI and exemptions is a poor surrogate for Total Income, # in family, and # in college. In divorced situtation, non-custodial parent often allowed to claim the child but is not expected to contribute. A significant step forward may be devising a system that corrects this inequity and looks for support from non-custodial parent. Individuals divorce their spouse not their children. I know, I know it might be tough but may be worth a look.
7. Sounds like, to a large extent, what we do now.
8. Sounds great and will work fine as long as Congress changes a whole bunch of laws. Since many states have the same or very similar laws pertaining to receipt of state financial aid, states would either have to go along with the changes, (good luck on that one) or institutions will have to collect the information separately.
May 26th, 2009 at 10:34 am
Overall this draft will produce the desired results of determining federal eligibility and should work for state aid also. Issues beyond fedeal and state eligibility are institutional and should be dealt with at that level.
Section 5 should not use ‘you” or “your” as it would create confusion. Adding a check box to declare that the information in this section is either parent or student information and word-smithing the instructions with, in most cases, “was” or “were” will help collect the correct data.
July 7th, 2009 at 9:55 am
We work in California in Silicon Valley where there are many families who live in two continents. Mom and kids may live here (USA) because the family prefers the schools/universities and dad lives in Asia because he can make big money there. Sometimes these families report their parents marital status as “separated” and the mom/kids appear on the US tax return with small incomes. However, dad is really sending lots of $$ to support the family. This is a hard situation to catch and represent properly in the current FAFSA, how would the simplified FAFSA differentiate this family from the “truly needy” family?