Simplify financial-aid form and remove barriers to a college education

The New York TimesJune 19, 2014 

This year more than 20 million college students will complete the dreaded 108-question Free Application for Federal Student Aid, commonly known as the FAFSA. Most do it again every year they’re in school. Some pay someone to help them, and colleges hire thousands of staff members to assist. Too many students are so intimidated by the form that they don’t bother to apply.

The FAFSA has 10 pages of detailed questions, explained by 72 pages of instructions, to complete an application that could be only two questions.

To give millions of hours back to American families, to remove what stands in the way of some students’ going to college and to save dollars that better could be spent on instruction, we are proposing legislation to reduce the federal financial-aid application to a form the size of a postcard.

Today the application is discouraging college attendance. According to the Institute for College Access and Success, during the 2007-2008 school year roughly 2 million eligible students did not complete the application for Pell grants, scholarships of as much as $5,645 that they do not have to pay back. Many of these individuals can’t afford college without the help of Pell grants.

A National Bureau of Economic Research study suggests that helping students and families fill out the application significantly increases college enrollment and success. There is a simple solution then: Eliminate almost all of the 108 questions the federal government currently asks. They are unnecessary.

Professor Susan Dynarski of the University of Michigan in Ann Arbor and Judith Scott-Clayton, an assistant professor at Columbia University in New York, have demonstrated that eliminating 90 percent of the application’s questions would change the average Pell grant by only $54 a year. They maintain that asking only two questions would give the government virtually all of the information it needs to ensure that federal aid is allocated according to need: What is your family size? And what was your household income two years ago?

Our bill would eliminate the complicated FAFSA form and replace it with one that asks only those two questions. While the number of family members in college was important in the FAFSA methodology, according to the new eligibility test, family size alone is sufficient. The measure of household income proposed is “adjusted gross income” – that is, a family’s pretax income – for the tax year before last. Using prior-year numbers means that families can get information a year in advance about what they will receive in federal aid. If a family’s circumstances have changed since that tax year, our plan would still allow financial-aid professionals to use their judgment to increase aid.

Dynarski and Scott-Clayton estimate that eliminating the current application form would save students’ families almost 100 million hours a year, the equivalent of nearly 50,000 full-time jobs. Colleges today must audit a slice of aid applications, which often contain mistakes. Our simplified system would eliminate much of the red tape. For borrowers not filing electronically, there might still be a need for additional verification to prevent fraud. Even so, the cost would be a fraction of the $432 million that Dynarski and Scott-Clayton report that colleges currently spend on administrative expenses.

Our bill would make five other significant changes to the federal financial-aid system.

•  Students would know, during their junior years of high school, how much college aid to expect. Students now don’t have this information until the second semester of their senior year.

• Students could use their federal Pell grant year-round. That means graduating more quickly, saving time and money.

• The federal grant and loan programs would be simplified: one loan program for undergraduates, one loan program for graduates and one loan program for parents who are paying for their kids’ college educations.

• The programs students use to repay their federal loans would be simplified by providing only two options: an income-based plan and the standard 10-year plan.

• The problem of students’ borrowing more than they need would be addressed. For example, a part-time student would be able to take out only a part-time loan.

Of course we want to be certain that the short form sends taxpayer dollars solely to those eligible. Two questions rather than 108 provide a more robust basis to ensure that aim.

At a time when a college degree is more important than ever in getting a job and making a good living, red tape and confusion are the adversary for millions of students. Adopting a two-question postcard for federal student aid is a sure step toward offering millions of Americans a brighter future.

The New York Times

Sen. Lamar Alexander (R.-Tenn.) is a former secretary of education. Sen. Michael Bennet (D.-Colo.) is a former superintendent of Denver’s schools.

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