The first time Kathy Peterson saw the Free Application for Federal Student Aid, the six-page form that the government uses to assess student need, she felt overwhelmed.
“I just kept going from one screen to the next, wondering, ‘When is this going to end?’” said Ms. Peterson, an office manager for a telecommunications trade association, whose son will attend Old Dominion University in the fall.
She says she spent at least 20 hours completing the electronic form, 20 times as long as the government estimates it should take.
Ms. Peterson was one of the persistent ones. Each year more than 40 percent of college students, nearly eight million, fail to file a Fafsa, even though most of them would be eligible for aid, according to the U.S. Education Department. The agency doesn’t know how many students start the process and give up, or how many never even begin because they’re intimidated by the form’s length and bureaucratic language.
With those students in mind, the Education Department is studying ways to streamline the form, such as pre-populating income fields with information from families’ tax returns and simplifying the formula used to measure need. The latter change would be subject to Congressional approval.
Though neither approach would fulfill President Obama’s campaign promise to do away with the form altogether, both changes would ease the burden on students, and on parents like Ms. Peterson, researchers say.
But simplification isn’t simple, and both approaches have their drawbacks.
Tightening the formula used to calculate the “expected family contribution” would shorten the form, but it would also redistribute student aid, giving more money to less financially needy students and driving up the costs of the federal programs. Pre-populating the Fafsa with income information would save families time, but it would also cause some students to receive more or less aid than they would otherwise be entitled to, since it would rely on two-year-old income, rather than on an estimate of the prior year’s earnings.
Still, a growing consensus among policy makers and researchers is that the tradeoffs would be worth it, and some changes are expected this year. Education Department statistics show that only 7 percent of students from the lowest socioeconomic quartile obtain bachelor’s degrees, compared with 60 percent of students from the highest quartile. While inadequate preparation among low-income groups is a major factor in this disparity, lack of resources is another. Low-income students who expect to receive financial aid are more likely to attend college than those who don’t, research shows.
“You have to be willing to accept some slop to get simplification,” said Mark Kantrowitz, publisher of FinAid, a Web site about student aid. “If you have more low-income students graduating because of a simpler form, isn’t it worth spending a little extra on people who don’t really deserve” that much aid?
Longer Than the 1040
The complexity of the Fafsa has been well documented and exhaustively discussed: At six pages and 120 questions, it is longer than even the 1040 tax form, with its two pages and 76 questions (not including schedules). The Fafsa’s length and unfamiliar language — terms like “emancipated minor” and “unaccompanied youth” — intimidate and confound families and may discourage some people from applying for aid altogether. And the “expected family contribution,” which the form yields, tells families how much they must contribute to college but nothing about how much aid they are eligible to receive.
Ask almost anyone, and they’ll say something has to be done to simplify the form. Commissions have studied how to do it; Congress has tried to legislate it; presidential candidates have promised it. At his confirmation hearing, Secretary of Education Arne Duncan quipped that “you basically have to have a Ph.D. to figure that thing out.”
Some desperate families have even begun paying professionals for help with the form, much as they do with their taxes. At Student Financial Aid Services Inc., which charges first-time clients $99 and repeat clients $49 dollars for help with the Fafsa, call volume is up more than 20 percent this year, says Craig V. Carroll, its chief executive. He attributes the growth to the rising cost of college and families’ falling incomes. Nationwide, Fafsa applications are up 21 percent this year, according to the Education Department.
That’s not to say that there have not been substantial improvements, particularly for low-income students, since 1992, when Congress created the Fafsa. In 1998, Congress established two simplified formulas for assessing need, permitting low-income students to skip many of the financial questions. In 2007 it raised the income cutoff for using those formulas, making 44 percent of students eligible to use them.
Last year Congress directed the Education Department to create a two-page “EZ Fafsa,” for some families earning less than $50,000 a year.
Meanwhile, the Education Department has incorporated “skip logic” into the online Fafsa, allowing filers to bypass questions that don’t pertain to their situation. That can reduce the total number of questions answered to between 25 and 90. The department has also created a “Fafsa4caster” that lets high-school students predict how much aid they will be eligible to receive by filling out a portion of the questions on the Fafsa.
Sally Skene, a student-aid counselor with College Access Fairfax, a nonprofit organization in Virginia that helps students fill out the form, says the current version of the Fafsa is quite easy to complete once filers overcome their initial anxieties.
“A lot of people are just intimidated by the idea of it,” says Ms. Skene. “They’re always amazed when we sit down and they see how easy it is.”
But researchers and lawmakers say negative perceptions of the Fafsa continue to discourage many families from applying for aid, and they advocate additional improvements.
Talking With Treasury
In Washington, Education Department officials have been meeting with their counterparts in the Treasury Department to discuss how the agencies might share information from families’ tax returns.
At its broadest, the plan would abolish the Fafsa and distribute aid strictly on the basis of adjusted gross income and family size, or another simple set of factors. A more modest approach would use IRS tax data to pre-populate some of the form’s financial questions.
Supporters say pre-populating the forms would save Fafsa filers time and frustration while reducing the transcription errors that can occur when parents and students copy information from their tax forms onto the Fafsa. It would also reduce the need for “verification” — the process by which student-aid offices cross-check Fafsa applications against students’ tax returns — saving colleges $90 per application, or $432-million a year, according to an analysis by the Advisory Committee on Student Financial Assistance, which advises Congress on student-aid policy. The Education Department estimates that the change would free up 1.75 million hours of aid officers’ time.
But that approach has some drawbacks. For one thing, it would rely on tax data that would be two years out of date by the time the applicants enroll in college. That means that students whose incomes, or whose families’ incomes, rose or fell significantly during that time period could receive too much or too little money. In an economic downturn like the current one, millions of laid-off workers could lose out on aid.
Even some supporters of simplification say this is not the time to experiment with pre-population, given the nation’s financial condition.
But advocates of the idea counter that two-year-old tax data are no worse at predicting current income than are the estimates of the prior year’s earnings that the government now uses to gauge need. They say the government could use threeor five-year averages of income to smooth out bumps and dips in income and point out that student-aid offices could use “professional judgment” to adjust award levels once updated tax information became available.
Some student-aid counselors wonder whether families will be comfortable letting the IRS share their tax data with the Education Department. “A lot of people won’t like handing over their tax returns,” says Dale R. Schmidt, who works with Ms. Skene in public schools in Northern Virginia.
There are technical and bureaucratic barriers as well. The IRS and the Education Department define terms like “dependent” differently, and the Treasury Department has historically been reluctant to take on the added workload.
Right now the likeliest compromise is a pre-population pilot program. The Institute for College Access and Success, a nonprofit advocacy group, suggests that the government also add a check box to the tax form so that families can receive early estimates of aid eligibility. Both steps could come in the next few months.
Equity vs. Efficiency
The other option being weighed in Washington is changing the formula used to award aid. The Fafsa now asks 45 questions to determine expected family contribution. Reducing the formula to just two questions — adjusted gross income and number of exemptions claimed on federal tax forms — as former Secretary of Education Margaret Spellings proposed last year, would pare the form to two pages.
That would make the Fafsa much less intimidating, but it would also direct more money to less financially needy students and drive up the cost of federal-aid programs. “You’re trading equity for efficiency” said Donald E. Heller, director of the Center for the Study of Higher Education at Penn State.
Still, there is some evidence that the redistribution of aid would be relatively modest. In 2007, two researchers, Susan M. Dynarski and Judith Scott-Clayton, calculated that if 90 percent of the questions used to determine a family’s expected contribution were thrown out, the average Pell Grant for families receiving them would change by only $54 a year, in part because many assets are already excluded from the formula.
Another concern is that states and institutions might reject the Fafsa if it becomes too simple. Congress created the Fafsa to be a “catch-all form” and allowed states to add questions to it to encourage them to use the Fafsa in awarding state aid.
But not all states do, and more than 550 colleges, universities, graduate and professional schools, and scholarship programs use the College Board’s 20-question “profile” instead of the Fafsa to award institutional aid. Those numbers could increase if the Fafsa formula becomes less discriminating.
“It does little good to simplify the federal form if students still have to fill out a 100-question form for their state,” said Mr. Heller. He suggests that the government offer incentives for states to piggyback on the federal form, such as larger grants through the Leveraging Educational Assistance Partnership Program, in which the federal government matches each dollar that states commit to need-based aid.
But some aid administrators and Education Department officials are beginning to wonder whether it’s really critical to have a single form. They say it may be time to move beyond the “universal form” mantra.
“You might want to ask, ‘Do you really want to stay wedded to a single-form concept if one form has only 20 questions?’” said Daniel T. Madzelan, director of forecasting and policy analysis at the Education Department.
In the meantime, thousands of parents like Ms. Peterson will continue to pull their hair out over the Fafsa.
“I never dreamed in a billion years it would be this complicated,” she said. “I’m just glad I only have one child.”
http://chronicle.com Section: Government & Politics Volume 55, Issue 30, Page A15
