House FAFSA Simplification Bill Draws on NASFAA Recommendations

By Joelle Fredman, NASFAA Staff Reporter

Rep. Lucy McBath (D-GA) on Tuesday introduced a bill, endorsed by NASFAA, to simplify the FAFSA by assigning different questions to students based on their family’s income level. The bill, dubbed the HOPE  (Heightening Opportunities for Pathways to Education) for FAFSA Act, would direct students down one of three pathways as they applied for federal financial aid, a proposal similar to that of a 2015 NASFAA working group

“Every hard-working American deserves a chance at an affordable education,” McBath said in a statement. “Students and their families spend long hours navigating the over-complicated financial aid process. The HOPE for FAFSA Act will simplify that system and make it easier for our kids to get the financial aid they need.”

McBath proposed that students who reported that they received a means-tested federal benefit, such as the Supplemental Nutrition Assistance Program (SNAP), as well as those from families with an annual income of $34,000 or less, would be directed to “Pathway 1,” and automatically qualify for an expected family contribution (EFC) of zero. 

Students who were not required to file any lettered schedule with their federal tax return, and whose families have an annual income of less than $60,000, would be assigned to a second pathway. Those who only filed a Schedule R and/or Schedule EIC would also fall into this pathway if they also meet the income threshold. Applicants in this pathway would not have to answer asset questions on the FAFSA, and their EFCs would be determined based on their income.  

The third and final pathway would include students who did not fit into the first two pathways, and they will be required to answer information about their income and assets.  

NASFAA’s working group’s recommendations for simplifying the FAFSA — which would strike about 100 questions from the form overall — included a similar three-tiered approach with slight variations. Instead of determining students’ pathways based on income level, the working group focused on their tax filing status. 

Specifically, after answering demographic and dependency status questions, the working group wrote that applicants should be steered down one of three paths based on their responses. Students who receive SNAP or Supplemental Security Income (SSI) benefits would comprise the first pathway — they would be automatically eligible for the maximum Pell Grant award, and their FAFSA would be complete.  

Students who did not receive these benefits would then be asked whether they were required to file a tax return. Those who did not file a return would be asked limited additional financial information to complete their FAFSA, and those who were required to file a return would be directed to the Internal Revenue Service Data Retrieval Tool (IRS DRT), which would collect information such as untaxed income. 

The working group originally proposed that students would be assigned to the remaining pathways based on whether they filed tax forms 1040A and 1040EZ, though those forms were eliminated in June 2018. NASFAA created a working group that is currently revisiting this proposal based on those changes. 

“Under this model, applicants who have low presumed financial strength based on means-tested benefits and tax filing status are presented with the bare minimum of FAFSA questions, and applicants with higher levels of presumed financial strength are presented with more questions,” the group wrote in 2015. “In this way, we can target FAFSA questions about certain types of income or assets to those populations who are most likely to have those income sources. While on first glance, this approach seems to provide simplification only for our neediest applicants, by expanding utilizing existing technology, even FAFSA applicants with comprehensive tax returns will benefit.”


Publication Date: 9/19/2019

David S | 9/19/2019 9:52:52 AM

This is great news, I will ask my Congresswoman to co-sponsor, and I encourage my colleagues to do the same.

Now let's add this to HR 4240, the File Once FAFSA Act, which is a bill we should be talking about a lot more. Imagine not only simplifying the FAFSA itself, but only requiring it once. This would not only assist in enrollment and retention among the very students financial aid is intended to help, it would enable schools to offer a 4 year award letter at the time of admission (or 2 years if applicable) instead of our current model of "here's your first year's aid package, now cross your fingers about future financial aid and make a 4 year commitment by May 1 please," which is one of higher ed's most egregious disservices. Thank you to Congresswoman Lauren Underwood (IL-14) for recognizing how much that would help our neediest students and families.

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