FAFSA redesign aims to simplify aid application

The FAFSA is getting an overhaul.

The cumbersome and repetitive Free Application for Federal Student Aid discouraged low-income students from applying for federal aid for higher education, hindering their ability to attend and pay for college.

In 2006, U.S. Secretary of Education Margaret Spellings launched the Commission on the Future of Higher Education, which recommended streamlining and simplifying the application. Now, a group organized by the College Board called Rethinking Student Aid recommended the FAFSA be discarded in favor of using family income tax information.

"Over the past three decades, our federal investment in higher education tripled. Yet college enrollment and attainment is virtually flat," Spellings said in an Oct. 1 speech. "In 1975, America was number one in college completion rates. In 2005, we were number 10."

Spellings said last year she returned more than $500 million in unused academic grants for low-income students. One reason why she thought there was more money than students was because 40 percent of college students - nearly 8 million students - didn't even apply for federal aid through the FAFSA.

"It's six pages long, has more than 120 questions and asks how old you are three different ways," she said. "We should be knocking down barriers, not putting up hurdles. It starts with a new form."

The newly proposed FAFSA form is only two pages long, has only 27 questions and has simplified or eliminated pages of income and tax information.

The length of the form does present challenges for lower and middle income students, said Kristan Venegas, a research associate at the Center for Higher Education Policy Analysis at the University of Southern California.

Venegas said the new FASFA form added nine questions about when the student would become an independent, which was helpful for lower-income students.

"I'm fine with 27 questions as long as those are the right 27 questions," she said.

That's still 27 questions too many, as far as the Rethinking Student Aid study group is concerned. Especially when much of the same information is available on the IRS 1040 income tax forms families are required to file.

After two years of consideration, the group released its recommendations, one of which is to automatically substitute IRS 1040 tax form for the FAFSA, eliminating a set of paperwork for lower-income families.

The group's objective was to increase enrollment and graduation rates for low- and moderate-income families, said Kathleen Little, a senior advisor of student aid policy at the College Board and member of Rethinking Student Aid.

Venegas said the Rethinking Student Aid study group advocates adding an option on the 1040 or 1040-A form which would allow the information to be cross-checked by the Department of Education.

"It sounds good in theory, but it's still a challenge for those who don't complete tax forms," she said.

Another challenge would be institutional verification. Federal aid is distributed through schools, and different schools provide varying amounts to students.

"I talked to financial aid directors who thought they would still ask for additional information proving assets for middle and upper income student and budget forms for lower income students," Little said. "I'm not sure (the change) will happen as cleanly as they anticipate."

The Rethinking Student Aid group outlined seven principles concerning financial aid for higher education and tested different ideas and methods against them. The process took two years, but the group released their recommendation on Sept. 18 and was in Washington, D.C. earlier this month conducting a policy forum.

"Our next step is to (open a) national conversation about student aid policy and to create a more effective student aid system," Little said. "Everyone thinks we need more money, but can the money be used more effectively than it's currently being used?"

Other recommendations from the group included linking Federal Pell Grants to the Consumer Price Index so the two would fluctuate together. A system would be in place so families could see how much grant money they would be eligible for based on their adjusted gross income.

The group recommended discarding the distinctions between subsidized and non-subsidized federal loans and using loan subsidies to assist student repayment.

Right now, dialogue and demand are important to the group to show their ideas are gathering support.

"Our hope is that it will generate a ground swell of support for the new administration," Little said.

She said nothing can happen unless legislation authorizes it. Because of the current economic crisis, she doesn't see anything happening soon.

"Students can (help by being) in contact with their congressmen and senators and tell them why these are good ideas," she said.

kiahhaslett@dailynebraskan.com