NAICU Washington Update

FAFSA Simplification Efforts Begin This Summer

June 29, 2009

After months of work by the Department of Education, Secretary Arne Duncan announced on June 24, a series of steps to simplify the application process for federal student aid.  The action is part of President Obama's education goal "to once again have the highest percentage of college graduates in the world."

At a White House press corps briefing, Duncan explained that the department is already providing instant Pell Grant and loan eligibility estimates to aid applicants.  This kind of information, which in the past arrived weeks after a student applied, is seen as essential in assuring low-income students that they can afford to attend college.

As early as this summer, some students using the new Web-based FAFSA will be able to ignore many of the 153 questions on the form through improved skip-logic.  This enables applicants to ignore questions that are irrelevant to them.  For example, students who are at least 24 year old, or who are married, will not have to be answer questions about their parents' income and assets.

Duncan said that "Starting in January 2010, students applying for financial aid for the spring semester will be able to seamlessly retrieve their relevant tax information from the Internal Revenue Service" when applying for aid on-line.  This means that students from low-income families will not be asked about assets.  The department and the IRS are working to expand the IRS option to all students in the future.

The administration also intends to propose legislation that would allow the department to eliminate from the FAFSA any information not available from the IRS.  This would permit removal of 26 financial questions from the form that, the department claims, have little impact on award amounts and are difficult for applicants to answer.

The department completed a study late last year comparing eligibility under the current need analysis formula and one taking into account only a family's adjusted gross income and its size.  Their conclusion was that the information from the much abbreviated form was acceptably similar to that from the longer form. 

However, eligibility adjustments that are minor in the national aggregate, could make a large difference to certain students, colleges, or sectors of higher education.  Also, if the FAFSA is made too simple, states and colleges might no longer use the form in awarding their own aid, leading to kinds of multiple aid forms and high application fees that were common before the FAFSA was created in 1992.

NAICU is actively engaged in the conversation to ensure that simplification truly helps students.


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