Higher education policymakers have long been looking for a way to make a college education—and applying for financial aid to pay for it—more accessible to a wider range of students. While simplifying the FAFSA is a step in the right direction, it might be more reasonable to pursue a one-time FAFSA application for low-income students, as their expected family contribution (EFC) remains very stable from year to year, according to a new report.
In the new report published Monday by the Center for American Progress (CAP), Colleen Campbell and Victoria Yuen modeled exactly what a one-time FAFSA would look like, and how different aid applicants’ EFCs change over time. The authors studied data from 27 colleges and universities across the country—provided by NASFAA and the Association of Community College Trustees—representing nearly 250,000 students and found that more than half of students who applied for financial aid had a change of $500 or less to their EFC. What’s more, Pell Grant-eligible students’ EFCs were even more stable, with 70 percent experiencing a change of $500 or less.
“With a one-time FAFSA, students can plan their college career knowing exactly how much aid they will receive, without being burdened by an annual form,” they wrote in the report. “Additionally, the federal government and college financial aid offices would experience significant savings from having to administer, verify, and process fewer FAFSAs. The time and money saved could be better spent on additional funding for need-based grants and providing more financial aid counseling for students.”
They also found that independent students had more stable EFCs than dependent students, with 40 percent experiencing no change in EFC, and another 12 percent seeing a change of $500 or less. Among dependent students, 22 percent had no change in EFC, and 18 percent had a change of $500 or less. Still, across all dependency statuses, the authors found Pell-eligible students to have the most reliable EFCs year to year.
Aid applicants who had higher initial EFCs were more likely to see larger changes in their EFCs in subsequent years, whereas applicants with lower initial EFCs saw little to no change, the report found. While those findings are positive for the prospect of a one-time FAFSA, the results are less clear for state and institutional aid, the report said.
The federal government has students complete the #FAFSA annually, but is that really necessary? Here are some findings from my new paper that show a one-time #FAFSA is indeed possible. https://t.co/I9ffJkfACl— Colleen Campbell (@collecamp) November 26, 2018
“Some colleges and states may award need-aware grant aid—which considers both need and merit—farther up the income spectrum than the federal government and therefore care about capturing these changes,” the report said. “However, data show that few students fall in these categories.”
Most students who did see a change in their EFC did not have a change in family circumstance, such as a change of dependency status, the number in the family, or the number in college. For those 61 percent, rather, the change is likely driven by a change in income, with larger increases in income leading to larger changes in EFC. The authors argue that students should have to refile if they have a change in family circumstances, and that an income threshold should be developed for students to refile if their family income increases.
Using Pell-eligible students as a baseline, the authors calculated the average income change for students with different initial EFCs who subsequently lost their Pell Grants. For the 4 percent of students with an initial EFC of $0, the average income change was $17,995, for example. For those with an initial EFC between $4,001 and $5,000, the average income change was $3,836. The authors argued, then, that an income threshold between $7,000 and $10,000 would be reasonable, “with the understanding that students who are receiving a Pell Grant have low incomes.”
“Any income increases below $7,000 are most likely needed to pay for a student’s or family’s basic needs rather than their educational costs,” they wrote. “Families should not be nickeled-and-dimed for the so-called accuracy of the EFC.”
Until a change is made at the federal level, all students will still be required to re-file the FAFSA each year, but Trinity College this week announced it would be eliminating the need for students to refile the CSS Profile each year.
"Our goal is to remove the anxiety, confusion and complexity from a process that discourages low-income students from applying to and persisting at institutions of higher education," Trinity College said in an announcement of the change. "Knowing how much college will cost over a four-year period will also allow students and families to make better decisions about enrollment and financial planning. The requirements to apply for financial aid continue to become more complex, and for the lowest income students, the process serves as a constant reminder that they are poor."
The authors of the CAP report present several policy recommendations as options for implementing a one-time FAFSA, such as all students completing the FAFSA just once, only Pell-eligible students filing the FAFSA just once, only zero-EFC students filing once, or independent students only filing once. While a permanent change would need to come through a change to the Higher Education Act, the authors said the Department of Education could implement a stop-gap measure in the meantime by only requiring students to fill out a questionnaire checking on factors that would significantly change their EFCs, rather than filling out an entirely new FAFSA.
“Although a one-time FAFSA may seem fraught with challenges, implementing the policy for the entire undergraduate population is feasible for the federal government and would improve the lives of students,” they wrote. “Ultimately, a one-time FAFSA highlights how much the federal government relies on overly exacting students’ EFCs and the associated need analysis process in order to award need-based aid. Combining a one-time FAFSA with other simplification policies, such as removing infrequently answered questions from the form, would give students a new, more straightforward system—resulting in real benefits in terms of college access and affordability.”
Publication Date: 11/27/2018