The FAFSA Challenge

The annual struggle is nearly upon us. With the Oct. 1 date for the Free Application for Federal Student Aid nearly here, we in the higher education policy world face a daunting task: continually pushing for further FAFSA simplification, without inadvertently deterring the very students who most stand to benefit.

An analysis conducted last fall by personal finance website NerdWallet found “the high school Class of 2017 left as much as $2.3 billion in free federal grant money for college on the table” because they did not submit the FAFSA. This is a recurring problem that has led many organizations -- including the one I work for -- to reconsider the entire federal student aid application process. Often we illustrate the complexities students and families face with real-life examples that drive home why this is such a critical issue for lawmakers to tackle. But as financial aid administrators from across the country are quick to remind me, in our attempts to highlight this issue to lawmakers, those same narratives might convince some students and families that completing the application process is just too difficult.

It’s important to back up and remember how far we’ve come in simplifying the process in just the last 10 years. Yes, there are some complicated questions on the FAFSA that are asked to try to differentiate various levels of financial need, but students from low-income families aren’t likely to see most of those questions. Given that 99 percent of applicants complete the form online, the FAFSA contains ever-improving skip logic that allows applicants to bypass some of those most confusing questions. Additionally, now that we are using tax data from two years prior to enrollment, even more families can import some data from their tax returns directly into the FAFSA.

Today, students complete the entire FAFSA in just about 30 minutes, and those times could possibly improve even more with a new FAFSA mobile option introduced just this last summer.

Focusing too much on the complexity of the financial aid form may not only deter students from completing it, it can also lead to bad policy making. For example, at one point lawmakers were considering simplifying the FAFSA down to just two data points. While this might work for a significant number of students, such a dramatic simplification would greatly reduce our ability to differentiate those with real financial need from those who only appear needy through the tax system. Such a move would have likely pushed several schools and states to add their own applications in addition to the FAFSA. Today, there are better ways to collect student and family information while still simplifying the process.

One way to do that is to expand the amount of data students can import directly from their tax returns using the Internal Revenue Service data retrieval tool, increasing the ability to assess financial strength while reducing the number of questions students and families need to answer. The National Association of Student Financial Aid Administrators just last week provided public comments to the IRS urging them to work closely with the Department of Education to ensure that changes to tax forms and schedules do not have negative impacts on the student aid application process.

Additionally, families that already qualify for certain means-tested public benefits could largely be prequalified for financial aid if Congress mandates some basic data sharing between federal agencies, as proposed by NASFAA, the National College Access Network and others.

This is no easy balancing act. Further financial aid simplification is necessary, and personal stories about those complexities help drive home that need. But let us also tout the improvements that have already been made, promote new mobile options and reassure students and families that completing the application process is doable and necessary. Financial aid administrators, access professionals and guidance counselors stand ready to help any who find themselves stuck in the process.