U.S. college and university students and their parents could spend less time next year completing the Free Application for Federal Student Aid (FAFSA) with the “simplified FAFSA” proposed in President Barack Obama’s 2016 Department of Education budget.
Congress will consider the president’s proposal as the House and Senate mark-up the budget for the Department of Education.
The president’s proposal would reduce the number of questions on the application by one-third and would rely more on federal income tax information. Questions about untaxed income, net worth, savings and investments would be eliminated. The FAFSA currently has more than 100 questions.
The federal deadline for submitting the form is June 30, 2016 to be considered for federal aid in the 2015-2016 academic year. State deadlines vary.
To receive aid from the university, current GW students must complete an online CSS profile and FAFSA by April 30.
The shortened FAFSA is a minor change compared to the two-question postcard proposed in the “Financial Aid Simplification and Transparency Act” by Senators Lamar Alexander (R-Tenn.) and Michael Bennet (D-Colo.). The bill submitted last June, is an overhaul of how students qualify and apply for funding and receive aid.
George Washington Today spoke with Sandy Baum, Graduate School of Education and Human Development research professor of higher education, about how a shortened FAFSA could affect students’ eligibility for financial assistance.
Q: Students who want to be considered for aid are required to fill out the FAFSA—a snapshot of their financial situation. Is the FAFSA an accurate view of a family's financial status?
A: The questions on the FAFSA do not provide a complete view of the financial situations of families and students. That would require even more questions. There is a trade-off between complexity and precision. Moreover, many aspects of people’s financial resources—those unreported on tax forms such as a gift from a grandparent—are difficult to verify. Nonetheless, the FAFSA does allow a rough comparison of financial capacity across aid applicants.
Q: What are some common barriers to filling out the FAFSA?
A: The FAFSA has become easier to fill out since it has gone almost entirely online. It uses skip-logic, which allows applicants to skip questions that are not relevant. Also, some information can now be imported directly from federal income tax forms. That said, people are intimidated by the idea of the FAFSA, have difficulty understanding some of the questions and may be hesitant to reveal some of the information they consider personal. Moreover, some applicants face language barriers, and students may not have access to information about their parents’ finances.
Q: Is all of the data required for the FAFSA necessary for the federal government to evaluate a family’s need for financial aid?
A: The FAFSA includes questions about whether applicants have drug convictions and whether males have registered with Selective Service. These are clearly not related to ability to pay. Most of the questions are relevant, but many turn out to have little impact on how much federal aid applicants receive.
Q: The simplified FAFSA would eliminate questions about untaxed income, net worth, savings and investments. How could this affect how need is assessed?
A: Responses to these questions make very little difference in the determination of federal grant aid because very few people have enough assets to make a difference. Federal Pell Grants are targeted to students from families with incomes below $60,000 and those who are independent of their parents. The form also does not include information about retirement assets and homes—the two most common assets for middle-income families. However, some states and many institutions use the information on the FAFSA to allocate need-based aid to families much higher up the income scale because these households have more assets and more complicated financial situations.
The proposal suggests relying on information available from federal tax forms to replace the questions currently on the FAFSA. Tax forms would do a reasonable job of allocating financial aid, while significantly diminishing the burden of the application process.
Q: Do you anticipate that these changes could affect the calculation of “Expected Family Contribution” and decrease aid awards?
A: It is much more likely that removing questions about other forms of income and assets would decrease measured ability to pay — causing students to qualify for more aid. But the goal of the shortened application is not to increase or decrease aid. The hope is that a simpler application would allow more people to easily access the financial aid for which they are eligible.