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Simplifying the financial aid application

By Steve Rosen

Tribune Media Services

March 20, 2009

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Any parent or student who has ever wrestled with filling out federal financial aid forms should appreciate this proposal.

Buried about halfway through President Obama's budget plan -- along with proposals that would increase Pell grants and modernize the Perkins Loan program -- is one sentence that calls for simplifying the federal student aid process.

Shake your head and laugh if you want, as if the government can simplify anything.

But there it is -- a proposal that ostensibly aims to make good on Obama's campaign promise to eliminate the financial aid form, officially the Free Application for Federal Student Aid.

Filling out the FAFSA starts the process of applying for college financial aid. With about 100 questions, the instructions can be so confusing that even the new secretary of education acknowledged that a parent or student basically needs a Ph.D. to figure it out.

That's not a good way to encourage students to apply for loans.

There aren't any details on how the simplification would work or when the new process would take effect (likely 2010-11), and experts said whatever happens may not be fleshed out for several months. It would mark the first time in more than 15 years that the FAFSA has been significantly restructured.

Mark Kantrowitz, publisher of the FinAid college financing Web site, said the aid application reform might mean replacing FAFSA with a checkbox on the federal income tax return.

For example, families checking the box would authorize the Internal Revenue Service to share information on the tax return with the Education Department. This would make sense because families are already required to provide updated tax information to financial aid offices.

Another approach under discussion would dramatically cut the number of financial questions on the FAFSA, asking possibly just a handful such as adjusted gross income and the number of tax exemptions.

"We support the ... efforts at simplification, especially for low-income students and families who end up spending an inordinate amount of time proving they're poor to multiple government agencies," said Justin Draeger, vice president of planning for the National Association of Student Financial Aid Administrators.

But some experts warn that the push for simplifying financial aid paperwork is flawed. Rather than eliminate the FAFSA, education officials should clarify instructions, rewrite ambiguous questions, provide for speedier online assistance, and take other steps to make the process more user-friendly.

"The problem is the process, not the financial form itself," said Kal Chany, a financial aid consultant and author of the Princeton Review's "Paying For College Without Going Broke."

Chany pointed out another potential problem. If families aren't required to file as much personal financial information as they are now, schools might create new application forms to get additional and more precise data. In addition, more colleges may switch to the College Board's CSS Profile.

The CSS Profile is used, in addition to the FAFSA, by many private schools and a growing number of public institutions. There are fees involved with filing, the financial documentation required is also complicated, and forms cannot be updated online.

So would the FAFSA simplification really make the overall process easier? Not likely, unless every step is brought under the microscope, according to Chany.

Overall, I'm for any plan that would ease the workload on parents and high school seniors when applying for financial aid. But if simplification is in the works, get it right -- then fulfilling the president's stated goal of encouraging more students to go to college will take care of itself.

2009, Tribune Media Services