The White House is taking new steps toward simplifying the Free Application for Federal Student Aid, the much-maligned form that provides access to billions of dollars in federal grants and loans for postsecondary education.
Starting in the fall of 2016, applicants will be able to file the form, known as the Fafsa, as early as October and prepopulate it using tax data from two years prior. Until now, only applicants who had filed their taxes for the previous year could do so.
Those changes, which President Obama will announce in Des Moines on Monday, will allow students and their families to receive earlier estimates of their eligibility for aid. It will eliminate the need for students who apply early to update their income data later on, and will reduce the number of applications subject to the paperwork-intensive "verification" process.
Allowing applicants to seek student aid using "prior-prior-year" tax data could also encourage more students to apply in January and February, before the scholarship deadlines set by many states, colleges, and outside groups. Students who now wait to file the Fafsa until after their families file their tax returns often miss out on those additional sources of money.
Advocates for students and colleges have long pushed Congress and the Obama administration to permit the use of prior-prior-year tax information, arguing that students need to know how much aid they’re likely to receive when they’re applying to college, not months later. But the administration and Congress have hesitated, citing the potential cost.
Estimates of that cost vary but are based on fluctuations in applicants’ income and an expected increase in applications. In some cases, students and families’ incomes for two years prior will be lower than their income for the previous year, so their awards will be larger. And making the process easier is likely to increase the number of students applying for aid.
Nationwide, roughly two million undergraduates did not file the Fafsa in 2011-12, according to a recent analysis by Mark Kantrowitz, a student-aid expert with Edvisors.com. If they had, they would have qualified for as much as $9.5 billion in federal Pell Grants, and almost $3 billion in state and institutional aid.
That failure to file occurred even though the Fafsa is much simpler than it used to be. Nearly all applicants now complete the form online, where skip logic and IRS retrieval can allow them to bypass many of the form’s 108 questions and prefill others. Those technologies, which the Obama administration has championed, have cut the average time to complete the Fafsa from over an hour to just over 20 minutes, according to the Education Department. Less than half of 1 percent of applicants still fill out the 10-page paper form.
Still, many advocates, and the White House, would like to go further. In a fact sheet released in conjunction with Monday’s announcement, the president repeated his call for Congress to remove 30 questions from the form.
Correction (9/14/2015, 8:39 a.m.): This article originally misstated when the new Fafsa policy would take effect. It will take effect starting in the fall of 2016, not this fall. The article has been updated to reflect this correction.