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Congress Weighs Simplifying Student-Aid Process

Congress Weighs Simplifying Student-Aid Process
By M.H. Miller

Nora Diaz almost didn’t make it to college because her student-aid application form was too long and complicated. Diaz told a congressional panel that she couldn’t have filled out the form without help from counselors. And without student aid, college wouldn’t have been an option for Diaz, whose father is a migrant worker who earns minimum wage.
According to the Congressional Advisory Committee for Student Financial Assistance, Congress should simplify both the standard student-aid application form and the formula by which student eligibility for federal aid is calculated to make the process “easier, more responsive and fairer to students and families.”
Last January, Congress directed the advisory committee to explore methods of simplifying the federal student-aid process. The committee was charged with issuing a report based on its studies, “Special Study of Simplification of Need Analysis and Application for Title IV Aid,” in two phases: the “preliminary” report on July 23 offered recommendations for statutory changes, and the second phase of the report, due Jan. 23, 2005, is to suggest administrative and regulatory actions.
“Our goal is to create equity, so that not so many students are advantaged or disadvantaged,” Dr. Brian Fitzgerald, staff director of the committee, told committee members during a teleconference.
“I have been very impressed by the bipartisan effort” to address the complexity of the student-aid process, said David Baime, vice president for government relations at the American Association of Community Colleges.
“Simplifying financial aid is a popular idea,” noted advisory committee member Robert Shireman, director of The Institute for College Access and Success in Berkeley, Calif. While acknowledging the challenges inherent in such a major undertaking, he added, “I think these (preliminary) recommendations are pretty reasonable.”
Such changes would significantly affect community college applicants, as most are low- to moderate-income. In the 2000-2001 academic year, 56.5 percent of full-time students entering public two-year colleges received financial aid of any kind; of these, 62.3 percent received federal grants, 27.1 percent received federal student loans, and 51 percent received state and local grants, according to the U.S. Department of Education.
The advisory committee’s preliminary conclusions recommend to the Senate Health, Education, Labor, and Pensions Committee that Congress:
• Increase the maximum annual income threshold for automatic eligibility for the maximum Pell Grant amount from $15,000 to $25,000;
• Basing annual adjustments to this income threshold into alignment with other federal means-tested programs on the Consumer Price Index instead of the Earned Income Tax Credit;
• Streamline the “Simplified Needs Test” (SNT) — which determines eligibility for financial aid — by aligning SNT eligibility criteria with those of other federal programs, so that students or families eligible for programs such as the Free and Reduced Price Lunch Programs don’t slip through the cracks when SNT eligibility is determined;
• Make available to students at the Pell Grant maximum income threshold a paper version of the online “FAFSA-EZ” application form, so that application for federal and state aid is easier for applicants with limited access to the Internet;
• Simplify the Web version of the federal student-aid application form — FAFSA — even more by tailoring the form to each student’s state of residence, thereby reducing the number of questions;
• Increase access to technologies — including electronic and telephone-based application systems — to facilitate the application process for low-income students, about 700,000 of whom currently use a paper form to apply;
• Give students age-appropriate information about financial aid as early as junior high school, so that low-income students and their families may better prepare for college and the student-aid system;
• Allow students to apply for financial aid before Jan. 1 of the school year so that students and their families can receive their “expected family contribution” earlier, giving them more time to meet deadlines for state grant aid;
• Simplify the FAFSA by eliminating questions related to non-taxable income information, Selective Service registration status and drug convictions;
• Reduce the “work penalty” to lessen the disincentive for students to work to meet unmet need; and
• Phase out the allowance for state and local taxes over three years, while phasing in a $1,000 increase to the Income Protection Allowance.
The advisory committee also reiterated a proposal that a federal-state partnership be established to ensure gains in access to grant aid.
The advisory committee, in its current work for phase two of the study, has designed a prototype for a reconfigured FAFSA, having “determine[d] that it’s possible to get (FAFSA) to two pages. It doesn’t have to be, but the consensus is it has to be shorter than four pages,” Fitzgerald said.
During the teleconference, Fitzgerald went over the issues the committee’s exploring for the phase two study:
• What information is necessary to obtain from the FAFSA;
• How to speed up asset verification to make sure applicants don’t miss deadlines for state aid;
• How to use technology to speed up the process and lower the burden on applicants; and
• Which of the following three approaches would work best for early application: letting applications be made in the school year before Jan. 1; allowing high school juniors — or any applicants — to apply in the prior school year as well; or to go ahead and conduct pilot programs under which high school juniors submit applications, and federal, state and institutional-aid awards are made early, with adjustments made when later student/family financial data are available. The chance that statutory changes might be required for the last option is being considered, Fitzgerald said.
A timetable for subsequent congressional action is unclear, though Fitzgerald said it’s unlikely any action will be taken on the preliminary suggestions before the new Congress convenes next year. 

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