The National Association of Student Financial Aid Administrators (NASFAA) recently came out with a series of ten papers on ways to streamline the notoriously complicated FAFSA, the application for student financial aid.
With grant funding from the Bill & Melinda Gates Foundation last summer, the organization created an updated version of its 2015 proposal for simplifying the FAFSA and called on a slew of experts to assess the work and contribute research of their own.
The FAFSA can be an onerous process for low-income students under ordinary circumstances, said Karen McCarthy, NASFAA’s director of policy analysis, but the release of these papers feels “particularly timely” during the coronavirus pandemic. COVID-19 has swiftly changed people’s enrollment plans as some choose to go back to school or switch institutions.
For students making those last-minute decisions, “we really need this FASA application process to work well for them, because it can’t be a burdensome, time-consuming process … That really does affect people’s plans. The things that they had decided they wanted to do may not theoretically be possible if the FAFSA process takes too long.”
The goal of the paper series is to offer relevant data and tangible recommendations to policymakers – when the time comes for the Higher Education Act’s long overdue reauthorization. The legislation that governs federal higher education programs is supposed to be renewed every five years but hasn’t been reauthorized in over a decade.
A bipartisan push, simplifying the FAFSA “has been supported on both sides of the political aisle for years now,” McCarthy said. “And we expect it to be a hot reauthorization topic, if and when we get there.”
Since NASFAA’s 2015 proposal, some key factors have changed, mainly the tax return system. With updated tax information, the 2020 recommendations reconfigured the original proposal’s core idea – that tax information can be used to steer families into three different pathways for applying for financial aid, simplifying the process. It also takes into account The Future Act, passed in December 2019, which allows the Internal Revenue Service (IRS) to directly share tax information with the education department. This means that students don’t need to self-report if they didn’t file a tax return, which could at least mean a simpler process for non-filers.
If the IRS can verify their filing status, “that helps people feel more comfortable with asking fewer questions of those applicants, who are by definition our neediest applicants,” McCarthy said. “Whenever you’re talking about simplifying the FAFSA, there’s this balance between simplification and program integrity and accurate targeting.”
In addition to calls for more data sharing and a three-level pathway model, NASFAA’s set of four recommendations includes not taking into account losses claimed for tax purposes and replacing the term “expected family contribution” with a less confusing term for students.
Based on all ten papers in the series, the organization also put out a list of 13 suggestions for simplifying the form.
Other papers explored a range of related issues, including how free college programs could impact the FAFSA, the potential merits of a one-time application and how information about families’ public benefits could maximize students’ financial aid.
For example, Meghan Oster, a statistical research analyst at Iowa College Aid, focused her research for the series on how the verification process impacts enrollment. The Department of Education seeks verification – which requires extra steps from students – for 22% of FAFSA applications, and in her study with students in Iowa, over half of Pell-eligible students were selected.
Her team found that having to undergo a verification process had a small negative effect on enrollment for Iowa students. For students planning to enroll in two-year colleges who underwent a verification process, the difference in enrollment rates was more pronounced.
“Low-income individuals interested in a two-year college are typically people on the margin of enrolling in college at all,” Oster said. For many of these students, community colleges are “their initial point of access into higher education,” so burdening them with extra paperwork that could deter their enrollment is an extra risk.
Meanwhile, she found that these verification processes had little impact on Pell grant amounts or expected family contribution, making it an enrollment barrier that doesn’t save money, at least in Iowa.
“To me, it doesn’t necessarily seem worth it,” she said. “If we – like the other papers in the series – advocate for simplifying the FAFSA, it may also lead to simplifying verification and hopefully a decrease in verification over time as we cut down on the information students need to provide in the FAFSA.”
And like many of the papers, the research left room for hope. The study also found that students who used the Data Retrieval Tool, which connects the Department of Education to IRS data, in the verification process were more likely to enroll.
That success shows technology can “do a lot of the legwork for students” by sharing data, and that has “important policy implications,” Oster said. “As policy advocates and as individuals looking to find ways to simplify and to reduce the burden on students, institutions and the federal government, that connection between the IRS and the education department is an important one, and it’s one that should continue to be strengthened.”
Sara Weissman can be reached at firstname.lastname@example.org