Washington Watch: Fixing FAFSA

As students prepare to enroll for the fall semester, many are still scrambling to find the resources to pay tuition and other college expenses. Millions of students begin the financial aid process each year, but recent data suggest that a significant percentage of students never complete it.

To receive federal financial assistance, students must first apply for it. Many students find the completion of the Free Application for Federal Student Aid (FAFSA) form complicated. Others may not understand its multiple purpose and mistakenly believe that its completion is only necessary to take out loans or only to apply for grants. Many may not know that state aid offices and even institutions themselves use information in the FAFSA form to determine students’ aid eligibility.

After completing the form, students face the daunting task of providing the necessary documentation for verification, a process intended to ensure the accuracy of students’ FAFSA data so that only eligible students get Pell grants and other financial aid. The verification process is a significant burden on both students and financial aid administrators with more than half of students eligible for Pell grants selected for verification in the 2015-16 award year. Even the introduction of the IRS Data Retrieval Tool, which allows the direct transfer of relevant information from tax returns to the FAFSA, didn’t make the verification process easier.

It’s up to Congress

While community college leaders continue to call to streamline the financial aid process, it’s up to Congress to make it happen. The process begins with the FAFSA, and its simplification requires legislation.

The House Republican HEA bill — known as the Promoting Real Opportunity, Success, and Prosperity through Education Reform (PROSPER) Act — was introduced and approved by the House Education and the Workforce Committee in December. The bill calls for FAFSA simplification, including an electronic version of the FAFSA for mobile devices and greater use of the IRS Data Retrieval Tool to populate the FAFSA with more information.

Last month, House Democrats introduced legislation to reauthorize the Higher Education Act (HEA). While the Democrats’ bill, the Aim Higher Act, differs significantly from the House GOP version, both support changes to the FAFSA to make it easier for students to apply for aid.

The Aim Higher Act would reduce the number of questions on the FAFSA and direct students to one of three pathways to complete the form. Rather than using a one-size-fits–all application, there would be a tiered application based on the complexity of a student’s finances. This approach, advocated by the National Association of Student Financial Aid Administrators (NASFAA), would reduce the number of questions for those students with lower incomes. Students with the lowest incomes and who received a means-tested federal benefit in the previous two years would automatically qualify for a full Pell Grant without having to answer additional questions. Dependent Pell Grant students would only have to file the FAFSA once, and the FAFSA would be provided in several languages.

Some user friendly changes

With elections just around the corner, progress on HEA reauthorization is stalled. In the interim, the U.S. Education Department (ED) has unveiled its redesigned fafsa.gov website to make it more user friendly for students relying on mobile devices. Testing is underway on a new student aid mobile app. The beta version of “myStudentAid” should be available later this summer. Additional features are planned for the next version in the 2019-20 FAFSA cycle.

With the shift from paper to online, ED will no longer print or deliver student aid publications after August 30. Colleges may want to order federal student aid publications now while they are still available. After that date, students will need to request paper copies of the FAFSA.

The department is also testing a new payment card for students to receive their Pell Grant and loan funds. The pilot program is expected to launch this fall.

About the Author

Laurie Quarles
is a legislative resource associate at the American Association of Community Colleges.