Long Responds to Spellings' FAFSA Plan

Secretary of Education Margaret Spellings announced at a speech cosponsored by the Harvard Graduate School of Education on Wednesday, October 1, that she plans to reduce the length of the FAFSA, the federal application for financial aid. Under Secretary Spellings' plan, one change would be to reduce the number of questions from 102 to just 27 questions, which, Spellings stated, would help to reduce the barriers that deter students from going to college. Associate Professor Bridget Terry Long, an expert in financial aid with an ongoing project studying the effectiveness of interventions designed to help low- and middle-income families complete the federal financial aid application form, responds to questions about Secretary Spellings' plan.

Q. Will simplifying the financial aid process provide more opportunities for lower income families and college access?

A. Absolutely. The evidence is clear that many students are unaware of the federal financial aid programs and how they can obtain money for college. According to a study by the American Council on Education, 850,000 college students who would have been eligible for federal financial aid in 2000 did not complete the necessary forms to receive such support. This is likely due to the complexity of the system and the lack of information about the availability of aid. Additional millions would have attended college if they could have afforded it, but surveys suggest few families know that the FAFSA exists. On the other side, there is also good evidence that when financial aid programs are well-publicized and relatively easy to understand and apply for, students respond and enroll in college in record numbers.

In a project I am doing that simplifies the process of filing out the FAFSA by using tax information, I have witnessed that it is possible streamline the process, and families have responded quite favorably and positively once they learn about their eligibility for financial aid.

Q. Could Spellings' simplified plan, which would notify families of their financial aid ability much earlier than before, potentially backfire and cause some low income families to choose not to attend college?

A. Though this is always possible, the research suggests that families greatly overestimate the true cost of college. With factual information about tuition costs and financial aid, it is likely they would see college being more accessible to them. Especially for low-income families, knowing that your student could get up to $4,700 in Pell Grants could have a serious impact on access.

The goal of informing students early about financial aid eligibility has another possible effect: it could encourage more students to prepare academically for higher education. Currently, families do not learn about their eligibility for financial aid until a few months before attending college. If a student does not think she can afford college, then she will be less likely to take the necessary courses in high school to prepare, and so this provision could help address this academic problem by dispelling myths about how unaffordable college is.

Q. What could keep a plan like this from being approved by the government, and are there any potential setbacks?

A. The FAFSA is the foundation of many state and institutional financial aid programs. By this I mean that other organizations use the information collected on the FAFSA to decide how they will distribute their own financial aid dollars. This is one of the reasons why the FAFSA is so long. If the number of questions is cut, then states and other institutions may need to find alternative ways to collect this information or follow the same path as the federal government and change the way they give aid. There may be some pushback on this.

Ultimately, the Department of Education (DOE) should partner with the Internal Revenue Service (IRS) to use income information on tax forms to determine aid eligibility. This would greatly simplify the system and prevent families from having to submit the same information twice. Congress just passed such a recommendation in the Higher Education Reauthorization that was signed in August, and my project demonstrates how this could be done in a practical manner. However, the proposal of a DOE/IRS partnership has further ground to cover before being put into practice, but hopefully, this is the direction that policy will go.