Changes to the FAFSA

According to a statement released from the White House website on Jan. 20, President Obama wants to simplify the FAFSA form in order to provide financial aid to more students. Additionally, a bipartisan bill to reduce the application to two questions was presented to Congress on Jan. 7.

“The President is calling for elimination of 27 of the most burdensome and difficult-to-verify questions, including questions about assets that penalize savings and untaxed veterans benefits, child support, and clergy pay,” says part of the release. “…The result would be a simple online application that asks about the student’s address, parents’ income, college choices, and certain other, easy-to-answer questions.”

One study from the US Department of Education reveals that though 66 percent of community college students qualify for Pell Grants, only 39 percent actually receive them. Similarly, though 50 percent of public four-year students qualify for the grants, only 38 percent receive them. The organization Education Reform Now, through the website “Democrats for Education Reform,” states, “We surmise the community college Pell Grant gap is due in part to a combination of low awareness about federal financial aid opportunities among community college students and a daunting federal financial aid application process.”

However, Republican Senator Lamar Alexander, from Tennessee, and Democratic Senator Michael Bennet, from Colorado, have co-authored a new motion that simplifies the form from 108 determinants to a mere two: the number of people in a household and the household income from two years prior.

The changes are part of the senators’ Financial Aid Simplification and Transparency (FAST) Act, which would also eliminate government subsidized loans, solidify federal financial aid to one of three loan programs and the Pell Grant, and return the Pell Grant program to year-round status. Two plans are available for loan repayment under the FAST Act: income based and ten-year based.

Senator Alexander argued that the FAST Act would be a better use of government spending on education after Obama presented America’s College Promise last week, calling the existing FAFSA “a ridiculous 108-question student aid application form which discourages 2 million Americans from applying for federal Pell Grants that are already available to help pay community college tuition.”

Beth Bailey, Director of Financial Aid at Covenant, appreciates the efforts to simplify the FAFSA, but is concerned about the danger of oversimplifying and the bill’s potentially negative implications for families. “In our financial aid process, we really use every piece of the FAFSA that’s filled out,” Bailey says, explaining that with the revisions, it may be harder to assess each family on a personal level.

The revised FAST Act would eliminate many of the federal grants and loans financial aid offices are used to considering, potentially forcing schools to create their own programs to replace the lost funding. Though Bailey maintains that it is still too early to tell exactly how schools will be impacted, she suspects that if the revisions were passed, offices might require more dialogue with families to get a holistic understanding of their financial situation. Bailey is also concerned about the elimination of government subsidies, which would allow student loans to accrue interest over time.

“It would change a lot about the landscape of financial aid in this country,” says Bailey.