Sen. Booker Introduces Simplifying Financial Aid for Students Act of 2014

By Joan Berkes, Policy & Federal Relations Staff 

NASFAA has expressed support for the Simplifying Financial Aid for Students Act of 2014, introduced yesterday by Sen. Cory Booker (D-NJ). The bill would require the Department of Education to use prior-prior year income (PPY) in the Federal need analysis. NASFAA has advocated for this change to the basis of the expected family contribution (EFC) calculation as part of its reauthorization recommendations. The bill would also increase the threshold for automatic zero EFCs to $30,000.

NASFAA President Justin Draeger said in a letter of support that using PPY would help align the admissions and financial aid processes, “offering more time for students and families to evaluate award offers from institutions and make an informed decision about where to attend college.” Implementing PPY could also enhance use of the Internal Revenue Service’s Data Retrieval Tool (IRS-DRT), which would simplify the application process and decrease the burden of income verification. Research conducted by NASFAA shows that dependent students from very low-income families and independent students with dependents of their own (two of the neediest cohorts) could benefit from a switch to PPY.

Increasing the auto-zero EFC threshold would simplify aid application procedures for more of the neediest students. Nearly 74 percent of Pell Grant recipients have incomes under $30,000.

 

Publication Date: 5/15/2014


James E | 5/16/2014 1:12:13 PM

PPY has been around as a potentially useful concept for quite a while now, and I support the effort for the reasons Justin's letter of support outlines. It is not a silver bullet for the aid delivery system, simplification, or the End of All Problems As We Know Them -- but it is not supposed to be. Sure, we will get lots of appeals, but depending upon where you work now, you might already be so used to that that you may not notice the uptick at all. Getting students who need money to school should be what we are about. Do we want more headaches? Of course not. But we don't control that, and if not this headache, another one will be coming down the pike in its place.

Dart H | 5/16/2014 12:50:31 PM

The last time the Feds "simplified" the FAFSA it grew from three pages to four. A true simplification would be reducing it to no more than 30 questions. As it is the single biggest deterrent to college is the FAFSA! Just my personal opinion.

Paul W | 5/16/2014 12:6:25 PM

What good is it to create greater access to a theater is the play stinks? For the vast majority of Americans, the college financial aid system is a cruel hoax. The reason it is not fixed is that too many people have a financial stake in leaving it the way it is. Sad but true. The White House and the Department of Education have new models that constitute a far better public investment but like any democracy the gatekeepers to change are they very people who created the need for change in the first place!

David S | 5/16/2014 11:50:25 AM

Financial aid statute and regulations should be driven by what's best for students, not what makes financial aid administrators' jobs easier. Studies show that many Pell-eligible students do not attend college. Think of how that will change if they are able to get information on their aid eligibility that much sooner. I'd go a step further and make Pell a 4-year award (because it's not as though most Pell-eligible families have significant upward mobility one year to the next), but one thing at a time.

As a Jersey resident, I'm proud that my Senator is willing to take a big step that would improve things for lots of needy students.

Don D | 5/16/2014 12:5:27 AM

"Back in the day", PPY was the law of the land, students start filing aid applications in October, I believe, for the following August-September start. I think it was one of the reauthorizations in the '80's that brought about PY but we all survived. And we will survive again if we go to PPY. PPY is better for students and isn't that what we are all about.

Sheree B | 5/15/2014 3:15:48 PM

I agree with Jon. This is a terrible idea. Not only will you have Professional Judgments for change of incomes to deal with, but changes in filing status and marital status (especially now that we have to rectify those conflicts as well, I hope the FAFSA stops flagging people who had a change of marital status after filing taxes but before completing the FAFSA!). We'll be following up with everyone claiming dependents who didn't work two years ago but support someone now to prove how they support their households. The best part will be finding filing status errors and having to tell people that they have to amend their taxes from 2 or 3 years ago depending on what aid year you are working on.

Does anyone else notice that whenever the feds say that they are going to make something simpler, the students are still just as confused and our workload vastly increases? I really wish they would stop trying to help us.

Jon J | 5/15/2014 11:39:32 AM

Well, it looks like this PPY disaster is an unstoppable freight train now. I hope you all really enjoy doing change of circumstances appeals, because that's about to become the biggest part of our jobs.

Tracy H | 5/15/2014 11:23:43 AM

This seems like a good idea and I do agree that it will ease the burden on students finding out in a more timely fashion their aid package as well as make it easier from them to obtain tax information from the IRS. However, the devil is always in the details. This is a BIG change, so timing of the implementation would need to be considered, as well as appropriate lead time given to get ALL the correct systems in place and adjusted to handle the change...inlcuding giving schools ample time to educate their students and change their processes.

Mark L | 5/15/2014 11:20:41 AM

Over the decades, I have learned to advise caution in changes affecting third parties. I would expect the shift to the use of prior-prior financial data to have several minefields to avoid.
1. The FAFSA is used for determining need-based state-funded grants. The two changes could be sufficiently costly to these programs that some states' legislatures would require applicants to continue to provide prior-year data.
2. The same holds true for institutional aid. And schools might request these data be submitted through a fee-for-service entity.
3. The necessary modification to avoid these is simple: continue to collect prior-year data, in addition to prior-prior for first-time aid applicants. Because, going forward, the current prior becomes the next-year prior-prior, reapplication would not impose any additional burden.

Theodore M | 5/15/2014 8:43:50 AM

This is a step in the right direction, but simplification needs to be more than just the application. Simplification in loan repayment will help students for years. Simplification of programs will help them understand what exactly they are borrowing.

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