Simpler financial aid application in the works

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By JEAN ORTIZ/Lincoln Journal Star

Growing frustrations among some parents and students about the cumbersome process of applying for federal financial aid could be calmed within a matter of years, according to some financial aid officials who hope those plans move from talk to action.

Simplifying the form, including one idea to tie the application to federal income tax information, has long stalled in discussions amid concerns about fairness, impacts on federal costs and other unintended consequences.

But the tide could be turning, at least judging by interest in Congress, said Robert Shireman, founder and president of The Institute for College Access & Success.

It’s encouraging that committees are working together to make it happen, he said.

“We’re optimistic that there are going to be some real efforts out of this Congress,” he said. “... I think it will take two or three years to get fully implemented.”

The process of filling out a Free Application for Federal Student Aid, or FAFSA, has done more than frustrate and confuse parents and students, financial aid officials say. For some, the eight-page document has created an intimidating barrier on the path to college.

In 2003-04, 1.8 million low- and moderate-income undergraduates did not file a FAFSA, up from 1.7 million non-applicants in 1999-2000, according to an analysis done by the American Council on Education.

About 1.5 million of those undergraduates who did not file the form appear likely to have been eligible for a Pell Grant -- a federal, need-based award. By comparison, 850,000 non-applicants likely missed out on the free aid in 1999-2000, the council concluded.

“That’s a problem,” said Conwey Casillas, the director of public affairs for student lender Sallie Mae, throwing the company’s support behind simplification.

Officials at Lincoln-based student loan company Nelnet officials, too, say they are supportive, calling a more streamlined process a phenomenal plan.

Education officials have struggled in understanding why students aren’t applying. U.S. Department of Education researchers posed the question in a 1995-96 survey, finding the most popular answer among low-income students was “other reason.” Other categories of non-applicants, meanwhile, offered up reasons like their family income was too high to qualify for federal money or that they could afford to pay for school without aid. A small portion simply said they missed the deadline.

The department hasn’t directly questioned students on the topic since then, and little other research has been done on why students don’t complete a FAFSA, the council said.

Streamlining the federal student aid application process was among the priorities of an action plan unveiled by U.S. Secretary of Education Margaret Spellings in September 2006. The action plan aims to improve America’s higher education system, including creating more information avenues for parents and students and more affordable access to college.

The department in March unveiled a new online tool called the FAFSA4caster that provides families an estimate of a students’ eligibility for federal student aid well in advance of the college years.

The tool also has the capability of moving the information to the Free Application for Federal Student Aid when it comes time to apply for federal aid, officials have said.

Spellings has called the tool an important first step toward simplifying the federal student aid application process.

Simplifying the application could have several benefits, primarily that it would help ensure low- to moderate-income students take advantage of Pell Grants, Shireman said. Overall, It also could help hold down excessive or hazardous borrowing.

“There are a chunk of people who are taking out high-priced private loans without first checking out federal loans,” he said.

Simple is good if it ensures the form doesn’t deter needy students from applying for and receiving federal student aid, said Justin Draeger, a spokesman with the National Association of Student Financial Aid Administrators.

“But there needs to be a balance between the complexity of the form, which attempts to distribute limited federal student aid funds equitably, and making the form as simple as possible to ensure access and choice – especially to needy and underrepresented students,” he said.

Reach Jean Ortiz at 473-7107 or jortiz@journalstar.com