By Mandy Sponholtz, Policy & Federal Relations Staff

The Bill & Melinda Gates Foundation yesterday released recommendations to simplify the Free Application for Federal Student Aid (FAFSA). Focusing on “balancing simplicity and accuracy,” the foundation makes the following three recommendations:

1. Simplify the FAFSA by sorting students according to the complexity of their financial situations and eliminating unnecessary application questions. 

Gates reports that 75 percent of applicants do not file tax schedules, and recommends the implementation of a simplified FAFSA for these applicants. The remaining 25 percent of applicants will also have a simplified form, with only two questions about assets on their FAFSA. For non-filers, the foundation recommends expanding the IRS data retrieval tool (DRT) to include W-2 and 1099 information to import into the FAFSA.

While the current FAFSA includes skip-logic, Gates reports that “the average first-time aid applicant still answers an average of 61 questions.” The application also contains roughly 30 questions that less than one percent of applicants actually answer, and thus, could be eliminated. The foundation also identified 12 non-IRS data elements not used to calculate an expected family contribution (EFC), and recommends deleting those items from the FAFSA as well.

2. Streamline the FAFSA by using tax data already provided by students to the IRS.

Gates also recommends expanding the IRS DRT to incorporate the type of tax forms filed, schedules filed, and schedule data. Applicants could import this data into the FAFSA, virtually eliminating the need for schools to perform verification, and freeing up financial aid administrators’ time to assist more students. Gates cited NASFAA’s 2015 Administrative Burden Survey to demonstrate the benefit of this recommendation to both students and parents.

3. Stretch out the application window by allowing students and families to use prior-prior year (PPY) tax data (tax data from a full year earlier) rather than prior year data.

Gates reported that the use of PPY would allow Pell Grant award estimates as early as eighth grade, which may result in increased incentive to take college preparatory coursework in high school. NASFAA continues to be a strong advocate for the use of prior-prior year income data on the FAFSA (#PPYNot).  

Like Gates, NASFAA continues to explore ways in which the FAFSA can be simpler and more efficient for students and families, and has convened a working group to develop specific recommendations. The Gates recommendations closely mirror those of NASFAA’s FAFSA Working Group, which will be released later this month. Learn more about NASFAA’s FAFSA simplification efforts through our most recent video in The Policy Brief series and at our interest session, “FAFSA Simplification: Finding the Right Way,”  during the 2015 NASFAA National Conference in New Orleans on Tuesday, July 21st at 1:45 pm.

Publication Date: 7/9/2015

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