Most agree that the complexity of the student financial aid system can deter the very students it is designed to help. Unfortunately, it has been rare for interested parties to agree on the best way to simplify the system.

A new survey of NASFAA members by NASFAA's Federal Issues Committee reveals that, despite the perception of prevailing disagreement about simplification, there is some common ground among financial aid administrators (FAAs). The survey of more than 1,400 FAAs details opinions on the application process, federal methodology, the delivery system, and possible pros and cons of some of the simplification suggestions. While opinions on some simplification issues differed significantly, the survey clearly shows that FAAs feel strongly that the current financial aid system -- including the application form, application process, need analysis methodology, and the student financial aid programs themselves -- must be simplified in order to achieve its objectives of helping needy students to attend college. The survey also revealed that:

• More than 90 percent of the respondents "support" or "strongly support" using a "smart" electronic FAFSA that is linked to various federal databases to populate the appropriate data. Respondents feel that such matches will help reduce excessive administrative costs and decrease application error rate, enabling financial aid offices to spend more time counseling and assisting individual students.

• More than 80 percent of aid administrators also believe that a "smart" Free Application for Federal Student Aid (FAFSA) will not hinder the proper administration of state or institutional grant programs.

• Aid administrators support eliminating non-pertinent items from FAFSA, using a "FAFSA Postcard" for students from low-income families, and adding "consider me for financial aid" on IRS tax forms. They believe this would make the aid application process less overwhelming for needy students.

• Aid administrators believe a federal student aid system that uses one grant, one loan, and one work program would reduce confusion and frustration currently experienced by students and families as they try to understand various types of student aid available to them.

• Aid administrators believe that no real simplification can be achieved without considering administrative burden on the institution because the financial aid process involves students and institutions.

Simplifying the Application Process

Regarding simplification of the FAFSA and the application process, the survey found:

• More than 67 percent supported the idea of using database matching between the IRS and the Department of Education to eliminate income questions on the FAFSA, while 14 percent of the respondents expressed some opposition to this practice.

• Nearly 60 percent of respondents supported the idea of "implementing a 'consider me for financial aid' check-off box on federal income tax return forms to initiate the application process" (Q2). About 23 percent "disagreed" or "strongly disagreed" with this method.

• More than 67 percent of respondents "agreed" or "strongly agreed" with eliminating Selective Service Registration, drug convictions, or driver's license requirements from the FAFSA. However, about 21 percent of respondents expressed opposition to this.

Federal Methodology

About 60 percent of FAFSA questions are primarily involved in calculating the Expected Family Contribution (EFC), and about 69 percent are relevant to the EFC calculation, federal aid eligibility determination, and packaging. The survey asked aid administrators if the EFC could be calculated with fewer data elements. The survey found that:

• More FAAs opposed "using prior-prior year data" than supported it. About 46 percent "opposed" or "strongly opposed" this. Only 29 percent expressed some degree of support for this method, with approximately 14 percent showing "strong support." One in four did not support or oppose this.

• FAAs have widely divergent views on eliminating untaxed income requirements for simplification - 27 percent "strongly disagree" with eliminating some or all untaxed income questions; 39 percent showed some degree of support (19 percent "strongly supported" and 20 percent "supported" this).

• A majority of respondents supported the use of certain income thresholds in simplification. Nearly 60 percent "supported" or "strongly supported" using a threshold to determine whether untaxed income ought to be disregarded

• Eliminating all asset questions from the application met the strongest opposition from FAAs - 40 percent "strongly opposed" this idea and about 17 percent "opposed" it.

Delivery System Simplification

Most studies on financial aid simplification have focused on reducing barriers for students and families by simplifying either the FAFSA or the need analysis formulas. NASFAA's Federal Issues Committee felt that adequate attention should also be given to reducing the administrative burden on the aid office to ensure timely, cost-effective distribution of student aid. The survey found general support for:

• simplifying the Return to Title IV formula
• eliminating the link between Title IV participation and Constitution Day observances.
• eliminating a single campus-based allocation
• implementing one Federal grant program (similar to Pell Grants)
• making FWS Community Service requirements optional
• eliminating the link between Title IV participation and voter registration
• implementing one Federal loan program
• eliminating I-9 employment eligibility verification for FWS employment

Simplification Impact and Consequence - An Estimate

In general, FAAs believe that simplifying the student aid system would not compromise the intent and integrity of the aid programs, if it is done right. For example, over 80 percent of the respondents believed that state and institutional grant programs could be properly administered if the FAFSA were simplified. Many FAAs (79%) also indicated that an ED/IRS database match would significantly reduce the application error rate among applicants.

Nearly a third felt that the current application form or process is a barrier to access, especially for low-income applicants. About 35 percent of the respondents believed that graduate and undergraduate students need different application forms to better serve the two different populations.

Posted 06/03/09 to www.NASFAA.org. Redistribution to non-NASFAA institutions is prohibited. Please submit Web site questions or comments to Web@NASFAA.org.