• November 27, 2014

Fixing the Fafsa, a Popular Idea, Makes Its Way to Congress

A two-question application for federal student aid—that’s the premise behind proposed legislation from two U.S. senators who hope a streamlined form will encourage more students, especially those from lower-income backgrounds, to apply for student aid.

In a news conference on Thursday, Sen. Lamar Alexander, Republican of Tennessee, and Sen. Michael F. Bennet, Democrat of Colorado, outlined their bill to reduce the current, 108-question Free Application for Federal Student Aid to just two inquiries that would fit on a postcard.

While their proposal may seem radical, the idea of simplifying the notoriously complicated form, known as the Fafsa, is far from revolutionary.

After gaining prominence in higher education, the concept has found support on both sides of the political aisle. For conservatives, a two-question form would cut red tape and cumbersome bureaucracy. For liberals, a streamlined application would remove a major hurdle for low-income students who want to attend college but are discouraged by the current Fafsa’s complexity and who thus forgo federal aid and possibly an education.

"This will be one of the more substantial pieces of legislation on higher education in a while, in terms of the numbers of students it affects and the number of policy proposals put in place," said Robert Kelchen, an assistant professor of higher education at Seton Hall University.

While this is the first time "federal aid on a postcard" has appeared in legislative form, the senators’ bill is likely to face the same pushback the idea received when it was just a recommendation in a policy paper. States and some colleges that rely on data they glean from the current, detail-heavy Fafsa to target their aid more precisely will presumably resist the change, Mr. Kelchen said.

Under the senators’ bill—which they’ve dubbed the Financial Aid Simplification and Transparency Act, or the FAST Act, for short—applicants would be asked to provide only the size of their family and their household income from two years earlier. The use of prior-year income numbers would allow families to receive information earlier about their federal aid package, possibly as soon as the applicant’s junior year of high school, the senators said.

‘College Grants on a Postcard’

The evolution of the FAST Act can be traced back seven years, to when two scholars, Susan M. Dynarski and Judith E. Scott-Clayton, advocated for a shorter application in a paper titled "College Grants on a Postcard: A Proposal for Simple and Predictable Federal Student Aid." (Ms. Dynarski is now a professor of public policy, education, and economics at the University of Michigan at Ann Arbor, and Ms. Scott-Clayton is an assistant professor of economics and education at Columbia University’s Teachers College.)

In their paper, the professors argued that nearly all of the Fafsa’s questions could be eliminated without a significant shift in financial-aid distribution.

"It’s not just a paperwork burden. It’s a barrier that is preventing students from even considering whether they can afford college or not," Ms. Scott-Clayton said in an interview on Thursday. "Why would you start this really annoying form if you have absolutely no idea what the benefit is for you?"

In addition to a downsized Fafsa, the senators’ bill would allow for year-round Pell Grants and would reorient the government’s various student-loan programs into one each for undergraduate students, graduate students, and parents. It would also reduce the government’s large menu of loan-repayment options to just two, an income-based plan and a 10-year plan.

Support and Pushback

Efforts to whittle down the Fafsa have been advanced under both Democratic and Republican administrations in Washington.

In the final days of George W. Bush’s presidency, Margaret Spellings, then secretary of education, proposed reducing the application from 120 questions to 27. During his 2008 campaign, President Obama said he would do away with the Fafsa altogether. In 2009, Mr. Obama’s secretary of education, Arne Duncan, said his department would expand the use of "skip logic" for the online Fafsa, allowing applicants to bypass questions unrelated to their situations.

And in recent months, Senator Alexander has used the full paper version of the Fafsa as a prop to illustrate how government regulation thwarts individuals and institutions.

According to Mr. Kelchen, of Seton Hall, the FAST Act could face opposition from states and colleges that use detailed information from the Fafsa to enable them to tailor their decisions on need-based aid or to award institutional grants and scholarships. He said it was unclear if the two-question form that Senators Alexander and Bennet had proposed would be satisfactory to those states and colleges.

"States may not think that is well-enough targeted for their financial-aid program," Mr. Kelchen said, "and colleges may really not think that."

Charles S. Lenth, vice president for policy analysis and academic affairs at the State Higher Education Executive Officers association, said that, in the absence of Fafsa-collected data, states with more-sophisticated award models would need to decide whether to replace the application or to develop an allocation scheme similar to what the reimagined federal system would use.

Should a state choose to design and obtain information with a Fafsa-like form, Mr. Lenth said the FAST Act had the potential to shift the burden of the Fafsa to the state level.

While in favor of expanding higher education to students of all backgrounds, Mr. Lenth said he worried that funding in some states would not keep pace with the growth in student population that a greatly simplified federal application would produce. As the number of students attending college increases, Mr. Lenth said, it stands to reason that each student would get less financial aid from his or her state, should the state keep its higher-education funding level the same.

"We don’t think about that relationship enough," he said, "and that’s one of the reasons per-student funding has gone down when enrollments go up."

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