Campaigning for the presidency last year, Barack Obama promised to do away with the Free Application for Federal Student Aid, the six-page form that critics say discourages some low-income students from applying to college.
The plan that the White House unveiled on Wednesday for simplifying the form, known as the Fafsa, wouldn’t go that far, and its most significant changes would require Congressional approval. Still, financial-aid experts say the president’s proposal will greatly simplify the process of applying for student aid, while creating momentum for broader change going forward.
The plan, which Education Secretary Arne Duncan described at his first White House press briefing, would expand the use of “skip logic” in the online Fafsa, allowing applicants to bypass more questions than they can now. It would also ask Congress to strike from the form dozens of questions about family income and assets and allow some applicants to retrieve tax data to answer many of the remaining questions.
That final change has been a long time coming. For years, student-aid experts have advocated allowing Fafsa filers to import information from their income-tax returns electronically, saying it would save applicants time and frustration while reducing the transcription errors that can occur when parents and students copy information from their tax forms onto the Fafsa. But the proposal had some drawbacks, and the IRS had been reluctant to take on the additional workload.
IRS on Board
Recently, however, officials from the Education and Treasury Departments have been meeting to discuss how they might share tax information. The result is a pilot program that will allow students and families applying for aid for the 2010 spring semester to retrieve tax information from the IRS to automatically fill in, or “prepopulate,” answers to 18 of the Fafsa’s questions.
At the White House briefing on Wednesday, Mr. Duncan praised the Treasury Department’s fast work.
“A lot of people said IRS will never participate, IRS will never do anything,” he said. “But these guys moved with lightning speed.”
By limiting the pilot program to spring-semester filers, the administration sidestepped another major obstacle to Fafsa prepopulation: the timing. Students who apply for aid for a term starting soon after the start of a calendar year should have completed their prior year’s tax returns, and can therefore submit the most-up-to-date income information. But students who apply for aid for the fall semester often have not done so, and would have to submit tax information from the “prior prior-year.” If their income, or their families’ income, had changed significantly during that two-year window, they could wind up receiving too much or too little aid.
Asked if the department planned to expand the prepopulation pilot to fall-semester filers, Robert M. Shireman, deputy under secretary of education, told reporters that no decisions have been made.
While the pilot program would cover only about half of Fafsa filers, student-aid experts called it an important, and pragmatic, first step.
“For a long time, people have said, ‘That would be great, but it will never happen,” said Lauren Asher, president of the Institute for College Access & Success, a policy group that Mr. Shireman led before he was appointed to the federal agency. “Now it’s happened, and it couldn’t come at a better time.”
The change will also benefit colleges, which spend some $432-million a year cross-checking aid applications against tax returns. Reducing the need for such verification would free up student-aid administrators to spend more time counseling borrowers, said Haley Chitty, a spokesman for the National Association of Student Financial Aid Administrators.
“It will alleviate the administrative burden,” he said.
More Simplification Wanted
But prepopulating some of the form would still leave student-aid applicants with dozens of questions to answer and multiple screens to navigate online. Critics say much more streamlining is needed to have a meaningful impact on applications by low-income students.
“You really need to fit it on the back of a postcard,” said Mark Kantrowitz, publisher of FinAid, a Web site about student aid. Real simplification, he said, will come through changes to the formula used to determine financial need, not through changes to the form.
For that, the Education Department will have to rely on Congress. Officials say they plan to ask Congress to eliminate the more than 20 financial questions that cannot be answered with information from income-tax returns. The chairman of the U.S. House of Representatives education committee, Rep. George Miller, Democrat of California, says lawmakers will consider the proposal as part of a coming overhaul of the student-loan programs.
“Secretary Duncan has put forth common-sense proposals for streamlining the Fafsa, and Congress will examine how we can build on these steps,” he said in a written statement.
Supporters of the president’s plan say it’s now up to administration officials to persuade other members of Congress to back the bill.
“They’ve done much of what they could have done, and it’s now going to be very important for them to put effective pressure on Congress,” said Sandy Baum, a senior analyst with the College Board and professor of economics at Skidmore College. “They have to make it very clear why this is important.”
