The Bill & Melinda Gates Foundation joined the debate over Fafsa simplification on Wednesday, issuing a paper that calls for making the process of applying for student aid simpler, more open, and better timed.
The document, the first postsecondary-policy paper by the megafoundation, adds the nation’s biggest philanthropist to the chorus of voices calling on the U.S. Congress and the Education Department to slim down the Free Application for Federal Student Aid and to let students apply for aid earlier in high school.
Some of the paper’s solutions have been proposed before, including allowing applicants to populate the form with tax data from two years earlier. Others are more novel, including a plan to sort applicants according to the complexity of their financial situations.
The paper builds on the work of a group of Gates grantees who studied simplification as part of the foundation’s Reimagining Aid Design and Delivery project. What sets it apart, said Daniel Greenstein, director of education, postsecondary success, at the foundation, is the level of detail it provides.
“There’s just a huge amount of energy around this issue from all fronts,” he said in an interview on Tuesday. “This really brings a level of detail to the conversation to sharpen the focus and — we hope — facilitate even greater coalescence than we’re seeing.”
Mr. Greenstein said the foundation was still studying the effects of its plan, and will provide details on its cost and influence on the distribution of student aid at a later date.
Growing Consensus
Lawmakers and interest groups have been wrestling with how to streamline the Fafsa form for years, worried that its complexity is scaring some low-income students away from college.
Nationwide, roughly two million undergraduates failed to file the Fafsa in 2011-12, according to a recent analysis by Mark Kantrowitz, a student-aid expert with Edvisors. More than half of them would have qualified for the maximum Pell Grant.
But filling out the Fafsa is in fact much simpler than it used to be. Nearly all applicants now complete the form online, where skip-logic technology and retrieval of IRS data can allow them to bypass many of the form’s 108 questions and automatically fill in others. Those techniques have cut the average time to complete the Fafsa from more than an hour to just over 20 minutes, according to the Education Department.
Still, nearly everyone agrees that more simplification is in order.
The most radical option on the table right now is Sen. Lamar Alexander’s proposal to shrink the Fafsa to the size of a postcard. Somewhat more modest is President Obama’s plan to remove 30 questions about assets and additional income.
But there are drawbacks to dropping questions. Not asking about assets would make more students appear needy and would raise the cost of the federal aid programs. Reducing the form to postcard size could compel colleges and states to create more-complicated forms of their own to award their aid.
One alternative is to shorten the Fafsa without actually shortening it, by making it even easier for students to import their tax information directly from the Internal Revenue Service. That approach, which is popular among policy makers and aid administrators alike, would permit applicants whose households haven’t yet filed their income taxes for the previous year to populate their forms with tax data from two years earlier. Now, only applicants who have filed their previous year’s taxes can use the IRS-data-retrieval tool.
Switching to “prior-prior year data,” as the change is called, would streamline the application process and would most likely raise the Fafsa-completion rate. But it, too, would drive up student-aid programs’ costs.
The Gates Plan
The Gates foundation’s paper embraces the prior-prior-year concept, saying it would give students “more time to apply for aid, compare and decipher aid award letters, and make key decisions.”
The paper also calls for allowing applicants who don’t file tax schedules — roughly three-fourths of filers — to complete a simpler form. (The other quarter of applicants would have to answer some asset questions, but they too would face a shorter form.) That idea comes from the College Board, which suggested “filtering” applicants in its work for the foundation.
Finally, the paper suggests expanding the amount of information that can be automatically imported through the IRS’s data-retrieval tool, including tax schedules. Doing so would reduce the need for colleges to “verify” information submitted by applicants, freeing up aid administrators to spend more time working directly with students, the paper argues.
Taken together, the changes aim to encourage more low-income students to complete the Fafsa and enroll in college. They are steps toward what the paper says is the foundation’s “ultimate goal": eliminating the Fafsa entirely, and basing eligibility for federal aid on income information provided to the IRS.
Kelly Field is a senior reporter covering federal higher-education policy. Contact her at kelly.field@chronicle.com. Or follow her on Twitter @kfieldCHE.
