Making the FAFSA More User Friendly

By:  Patrick O'Connor  Ph.D

It’s always exciting when a solution to a long-standing problem not only works, but is pretty simple to implement.  That’s the impressive promise Colleen Campbell offers in a paper that suggests an easy cure to the sometimes-complicated issue of applying for financial aid.

Most efforts to simplify financial aid have focused on the length of the FAFSA—either there are too many questions, or it’s too hard to find the required information.  Campbell’s research takes a different approach, and asks, why does a student have to complete a new FAFSA every year, especially if their financial information doesn’t change that much? Merely asking a student to submit the same information again can take its toll, reminding some low-income students of the high price of college, and leading others to forget about reapplying, causing them to lose their aid all together.

Anonymous financial aid data was collected by The Center for American Progress for about a quarter of a million students.  The results showed that about 70 percent of all students likely to be eligible for a Pell grant (the most popular Federal government financial aid program) had a change of income totaling less than $500—and that didn’t affect their eligibility. 

While the report suggests this is reason enough to consider going to a one-time FAFSA for all students, others aren’t so sure.  It’s easy to see how low-income students would benefit fairly from filing the FAFSA once, but what about students whose financial circumstances change a great deal?  In addition, since Pell Grant eligibility also depends on how many dependents a family has in college, wouldn’t all Pell recipients have to fill out a new FAFSA when brothers or sisters start going to college—or stop?

This leads to another idea that’s long been floated around—the renewable FAFSA, where students don’t have to complete an entire FAFSA every year, but simply update the information they’ve already provided.  This would make FAFSA completion much easier—to the point where students could complete the updating process when filling out other registration information when they enroll for classes.

Both of these solutions are reminiscent of a recent effort for FAFSA reform that made completing the form a matter of answering two questions. Studies from a few years back claimed that most students, regardless of income level, would receive the same level of aid they currently receive if they answered two questions:  How many people live in your household, and what is the household’s combined income? One study went so far as to claim that 95 percent of all students would qualify for the same level of aid (including no aid) if the FAFSA consisted of just these two questions.

These three very promising efforts at FAFSA reform deserve further consideration, while also reminding us of the very glacial pace of policy change. Combined, these studies question key assumptions of the current FAFSA process, including its necessity for detail, and for refiling annually.  These kind of bedrock changes never go over well with those charged with implementing policy.  While they’re willing to admit the current system is less than perfect, they’re also hesitant to risk what they have to make changes that could lead to something even less perfect than the status quo.

The Department of Education will likely wait and see what effect recent FAFSA changes have on aid eligibility—specifically, the use of income information from two years ago, and the implementation of the FAFSA app for smart phones.  While we wait to see what role those play, additional research in this more radical options would be a wise investment.