FAFSA Revisited

Last week, Secretary of Education Arne Duncan appeared before the White House Press Corps to discuss some of the Obama administration's changes to the FAFSA form, explaining that the present form was complicated enough to drive away many families who would have otherwise sent their children to college.

With simplification being the goal, Duncan enumerated the changes that the Dept. of Education can make now, without congressional approval.

As Duncan laid out the plan Wednesday, the Education Department will, right now, make several changes that do not require Congressional approval. This summer, the department will take advantage of existing technology on the Web-based FAFSA to allow married or independent students to skip questions about their parents, among others. In January, the department will stop requiring students with low incomes to answer questions about their financial assets, and only returning students will be asked about prior drug convictions, since the question does not affect first-year students. Department officials said they would work closely with state officials to set up the electronic form to "make it easier to answer questions that the states need but the federal government does not."

January will also mark the start of the department's test of a system to allow students who apply for aid for the spring 2010 semester to retrieve relevant tax information from the Internal Revenue Service to help them complete the online FAFSA. "When you're online filling out the FAFSA, there'll be a button that says, 'Want to go get your IRS data?' " said Shulman of the IRS.

Education Department officials say that the test will see whether the process of using IRS data to populate the FAFSA is workable, and that by focusing on students applying in the spring, they can postpone the thorny question of whether to use year-old tax data -- which creates potential challenges for financial aid officers and students alike when families' financial fortunes change significantly. "We haven't yet made the decision about whether to go to 'prior prior year,' " said Robert Shireman, deputy under secretary of education. "This will allow us to give the system a shot, and look at the prior prior year question later." About half of financial aid applicants -- those who attend college in the spring and many community college and other students who apply for aid late in the summer, right before the fall semester starts -- should be able to populate their FAFSA forms with current year data from the IRS, he said.

The thornier issues arise with the proposed changes that can't be made without congressional approval.

Department officials said they would ask Congress to eliminate a total of 29 questions about students' and families' finances that are not on the federal tax form. Several of those relate to families' assets ("As of today, what is the net worth of your (and spouse’s) investments, including real estate (not your home)?"), and eliminating the consideration of assets for most students by abandoning those questions would be among the more controversial steps the Obama plan calls for.

Most states and many private colleges now use the federal needs analysis methodology to decide how to allocate their own financial aid. While a panel of experts convened by the College Board last year called for determining financial need based solely on families' adjusted gross income and number of dependents, some college officials worry that states and colleges might stop using the FAFSA -- and require students to fill out other forms to apply for state or institutional aid -- if they no longer believe the federal form gives them sufficient information on which to base their decisions.

I like that the Obama administration is taking aim at a major obstacle to young Americans, otherwise eligible, receiving college educations. From my own experience, the FAFSA was a yearly headache for my dad and me every February.

I'm wondering if these proposed solutions are missing opportunities to bring community members' skills into the mix. A comment on the insidehighered.com story to which I linked earlier proposed that financial aid professionals be asked to provide pro-bono service at regularly scheduled "FAFSA Completion Night Programs." Those choosing to give back and participate would then be recognized in their community for their work. The idea, according to the commenter, would be to build off these programs and create events that would lead to more proactive financial preparations for college years ahead of time. With Obama's community organizing background and past articulation of the importance of citizenship and giving back, I think this approach would only make sense.