Under Current FASFA Timeline, Many Needy First-Years Miss Out On Aid

By Katy Hopkins, Communications Staff 

Many financially-needy students wait too long to file the FAFSA to receive their full eligibility for state and institutional aid, a new report has found.

Students for whom financial aid would be a significant boon – community college and part-time students, for example – often don’t meet priority filing deadlines in their states, if they file a FAFSA at all. Thus, they often don’t receive as much state and institutional aid as students who file by the first deadline, according to a new report “FAFSA Filing Among First-Year College Students: Who Files on Time, Who Doesn’t, and Why Does It Matter?”

That held true for students attending four-year public, four-year private, and two-year colleges, according to the report, which studied more than 11,000 first-year undergraduates enrolled in higher education in 2003-04 and eligible for financial aid. Late filers headed for community college, for example, received about $700 less on average than their peers who filed earlier—roughly the costs of books and supplies, the authors note. 

Other students studied didn’t file the FAFSA at any time. In total, 44 percent of first-year community college students didn’t file a FAFSA, the highest of the sectors. Twenty-six percent of public four-year college students and 18 percent of private four-year college students didn’t file, either. Across sectors, part-time students were 75 percent more likely than full-time goers to not file, and students who took time off before college were less likely to file, too. 

“There is a real need to rethink, and reinvent, the processes involved in applying for and receiving financial aid,” argue authors Lyle McKinney and Heather Novak, whose full report will be published in the upcoming edition of Research in Higher Education.

NASFAA has several ideas to help improve the financial aid application process. A Pell Promise, for instance, would alert students to their eligibility for the federal aid years before college, which could help to increase FAFSA filing. Using prior-prior year tax data on the FAFSA could accelerate financial aid applications to the beginning of senior year of high school, aligning it with the college application timeline. It would also eliminate the possibility of a delayed prior-year income tax return deterring a student from filing the FAFSA in a timely fashion.

An even more radical simplification of the aid application process could be to merge it with the tax return process, by providing a financial aid application section on or with the 1040 as an option for applying for federal student aid. This could eliminate the FAFSA application entirely for students and parents who file tax returns. An idea like this builds on the success of the IRS Data Retrieval Tool by leveraging it to an even greater extent.

What are your ideas for an improved application? Share your perspective in the comments section below.


Publication Date: 7/10/2014

Robert P | 7/10/2014 1:9:06 PM

I support the PPY concept and using the filed IRS tax form as the financial aid application. The IRS could then hire more IRS agents to audit income tax returns in place of colleges doing verification. This would ensure that the income information reported on a tax return used for financial aid eligibility is really correct. This would be more effective than the college verification process. The IRS would determine eligibility, send a notice to the US Treasury to place funds in an account for a student, USDE/Treasury use the NSLDS and Clearing House to verify enrollment at a college, and other federal information from PPA, COD, etc. to verify eligibility, and then send funds to college where the student is enrolled. Just an idea. For us at a community college with no institutional funds it would greatly simplify the process.

James C | 7/10/2014 9:59:01 AM

Unless campus based aid amounts are increased as well as state grant funding, having more students meeting the deadlines will not result in more aid being disbursed because the funding amounts are static. You will simply have more needy students competing with each other for a small piece of the pie.

Peggy M | 7/10/2014 9:2:09 AM

When tax filing for 1415 starts allow people to use the data to create both the 1415 data retrieval pull in and the 1516 application. Have an IRS link on the private free file sites that takes you to the postcard questions and creates the 1516 app. These could be used by schools starting August or September to package as early as November. My timeframes are based on my schools delivery of aid and when I think we could manage to package. An issue is whether schools have good info on institutional fee based funds by then.

You must be logged in to comment on this page.

Comments Disclaimer: NASFAA welcomes and encourages readers to comment and engage in respectful conversation about the content posted here. We value thoughtful, polite, and concise comments that reflect a variety of views. Comments are not moderated by NASFAA but are reviewed periodically by staff. Users should not expect real-time responses from NASFAA. To learn more, please view NASFAA’s complete Comments Policy.
View Desktop Version