Administration takes big step in simplifying financial-aid application process
There is growing recognition amidst student assistance experts, policymakers and foundations that the process of applying for federal financial aid is besides circuitous and may be discouraging low-income students from pursuing higher educational activity.
Until now, policymakers seeking to remedy this problem have mostly focused on proposals to simplify the federal pupil aid application, known as the FAFSA. For case, Sen. Lamar Alexander, the Tennessee Republican who heads up the Senate committee in charge of higher-educational activity policy, has repeatedly stood on the Senate floor with a taped-together FAFSA form that is longer than he is tall, indicating but how complicated applying for aid tin can be. For this reason, he has co-sponsored a pecker that aims to limit the number of questions on the FAFSA to only 2. Essentially, he would like the FAFSA to fit on a postcard.
Such proposals are extremely controversial. While they would radically simplify the financial aid application process, these types of plans would likewise brand it much harder for the federal government to ensure that its assistance goes only to those who truly demand information technology.
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To its slap-up credit, the Obama administration has taken an alternative approach that volition make the aid application process far less complex without significantly compromising the government's ability to ensure the assist programs serve only their intended beneficiaries.
"The most serious concern in moving to a 'prior-prior twelvemonth' system will exist for students who experience, or whose families experience, a sudden shift in their financial circumstances, due to a job loss, for case. In such cases, financial-assist administrators can exercise authority that the federal government gives them to use their 'professional person judgment' to adjust a educatee's financial-aid award, just as they do now in similar circumstances."
Starting in the autumn of 2016, the Obama assistants will allow students to utilize two-year-old taxation information, otherwise known as "prior-prior year income," to determine help eligibility for the 2017-18 school twelvemonth rather than relying on families to estimate their income from the previous year.
Currently, a student reports his or her family'south income from the prior year on the FAFSA. For example, students who utilise for assist in January (when the FAFSA becomes available) for the 2016-17 bookish year will exist required to use tax and income data from 2015. The trouble is that virtually families don't file taxes until closer to the April 15th deadline.
Every bit a upshot, many students either estimate their families' income on their FAFSAs or look to fill up them out until their taxes are filed. If they use estimated income data, they'll take to update their information on the FAFSA once they've filed their tax returns. In the concurrently, these students may miss out on state and institutional help that is awarded—often using income information from the FAFSA—on a beginning-come, first-served basis.
Moreover, under the current system, near students don't find out about their aid eligibility until March or April, but weeks before they have to commit to a higher.
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Under the Obama assistants'southward new policy, students will be able to employ for aid much before than they do now—in October, instead of Jan—because they volition exist using older tax information. As a result, they'll learn of their help eligibility months in advance and have more time to make a better-informed decision about which higher to attend. Besides, they'll no longer accept to worry about missing deadlines for state or institutional assist considering their families don't accept the necessary tax data.
In add-on, students will be able to make better apply of the IRS Information Retrieval Tool (DRT), which automatically populates a educatee'southward FAFSA with tax-render information. Currently, about iv million aid applicants each year are unable to utilise the DRT because they employ for aid before filing their taxes. Nether the new organisation, all aid applicants will be able to utilize the DRT, which volition ensure the accuracy of reported incomes considering the data will be coming straight from the IRS.
As a result, fewer assist applicants will be subject to "verification," a fourth dimension-consuming process mandated by the federal authorities that requires a share of students on each campus to prove the accuracy of the data on their help applications.
In a 2010 study, the Institute for College Access and Success warned that some low-income students tin can be so discouraged past the verification process—which "in extreme cases can be akin to a tax audit"—that they decide to forgo federal fiscal aid altogether, even though they may not be able to afford higher without information technology. "The current process can discourage students whose college attendance and completion the financial aid organisation is supposed to encourage and back up," the report states.
Related: Changing the incentives for colleges to enroll and graduate low-income students
Moving to a "prior-prior year" organization clearly has many benefits. But will it correctly make up one's mind a student's eligibility for federal financial aid?
"'The current process can discourage students whose college attendance and completion the financial help organization is supposed to encourage and support,' the authors of a 2010 report by the Establish for College Access and Success wrote."
Robert Kelchen, an assistant professor of college education at Seton Hall University, ready out to reply that question in a 2013 paper he wrote for the National Association of Student Financial Help Administrators (NASFAA). Examining FAFSA data for lxx,000 students enrolled at nine colleges from 2007-08 through 2012-13, he found that the vast majority of students would see no change in their Pell Grant eligibility as a result of the change. Those who qualified for a maximum Pell Grant nether the current organization remained eligible for it using "prior-prior yr" data. Those who did non qualify for Pell Grants remained ineligible nether the new system. The largest changes occurred for students who were on the cusp of eligibility for Pell Grants and for older students without children.
The well-nigh serious concern in moving to a "prior-prior year" organization volition be for students who experience, or whose families experience, a sudden shift in their financial circumstances, due to a task loss, for instance. In such cases, financial-aid administrators tin can exercise potency that the federal government gives them to use their "professional judgment" to conform a educatee'southward financial-assist laurels, just as they do now in similar circumstances.
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This isn't the commencement time policymakers have considered using "prior-prior yr" data. In the late 1990s, the Clinton administration called on Congress to brand this change. Congressional Republicans rejected the proposal, in function because it was offered by a Democratic administration.
Just these days, the idea seems to have bipartisan support. Sen. Alexander, for example, has spoken out in favor of it.
Making the change this fourth dimension around, withal, did non require Congressional activeness. In 2008, lawmakers gave the U.S. Secretary of Education the authority to move to a "prior-prior year" system. Last week, the Obama administration followed through by announcing the new policy.
Justin Draeger, NASFAA'south president, has said that, "Prior-prior year income is the closest matter we have to a 'silver bullet' for an industry in search of meaningful solutions" for simplifying the way students utilize for financial assist.
He's right—it's a no-brainer.
This story was produced by The Hechinger Written report, a nonprofit, contained news website focused on inequality and innovation in teaching. Read more about college education .
Source: https://hechingerreport.org/obama-administration-takes-big-step-in-simplifying-financial-aid-application-process/
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