The General Accountability Office (GAO) has completed a study and report to Congress on student aid simplification that was mandated by the Higher Education Opportunity Act.
The report, Highlights of a Study Group on Simplifying the Free Application for Federal Student Aid, was based on results of a process that GAO was engaged in from November 2008 to October 2009. During that time, the GAO convened an expert panel and conducted extensive interviews with higher ed associations and agencies to examine options for simplifying student aid. NASFAA staff members participated in the interview phase of the project; the expert panel included aid administrator Pat Hurley, an in-field aid professional for NASFAA's National Conversation Initiative and current NASFAA board member.
In convening this group, the GAO focused on ways to achieve the following: (1) identifying ways to shorten the FAFSA and make it less burdensome to complete, (2) identifying changes to the statutory need analysis formula that would reduce the amount of financial information required by the FAFSA without causing significant redistribution of federal and state student aid, and (3) determining how any changes to the FAFSA and the statutory need analysis formula could be implemented.
The report summarizes the ideas and themes that emerged at the panel and during interviews, displaying once again the convergence of thought and growing consensus around student aid reform.
Participants said using federal income tax data that the government already collects and revising the form could shorten the application process, making it easier on students and their families. Many participants proposed that relevant federal income tax data be directly transferred to the appropriate answer fields on each applicant’s online FAFSA, an approach that the Department of Education (Education) plans to pilot for some applicants in January 2010. Such a change could decrease the amount and complexity of some of the financial questions on the application. Successful implementation of changes hinges on the ability of federal and state agencies to address several challenges. Because taxpayers can submit their data as late as April 15, tax data will not be available in time to accommodate most aid applicants. Using "prior-prior" tax data might result in increased aid eligibility for some applicants whose data may not reflect their current economic needs.
Many proposed changes to the design and contents of the FAFSA to clarify and streamline the application. ED has recently taken steps to shorten and reorganize the online form and has plans for further improvements.
Group members said changing the federal formula to reduce required financial information would ease applicants’ burden, but such a shift would likely result in some change in the distribution of aid. Many study group participants supported changing the need analysis formula to rely solely on a family’s income and number of tax exemptions to determine aid eligibility, but there was some concern about redistribution..
Many called for linking state aid Web sites to the online federal application to mitigate the potential effects of federal formula changes on state aid. The GAO said the Department plans to offer this option to states in January 2010.
Participants said that efforts to simplify the application process should be accompanied by a public outreach strategy aimed at increasing knowledge of the availability of federal student aid. The GAO said the Department plans to undertake a public outreach campaign beginning in fall 2009.
In summary, the GAO made no specific recommendations; the report advises Congress that:
[W]hile most of these changes would result in streamlining the application process and will not affect eligibility for federal, state, and institutional aid, some— as is often true of policy and process changes—come with trade-offs. In particular, any changes to the formula used to compute eligibility may result in new winners and losers among aid applicants. Because the formula is complicated and no means of calculating eligibility—including the current method—is a perfect prediction of financial need, the effects of potential modifications on the pool of eligible applicants must be weighed against the goals of federal student aid.
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