Another Plan to Simplify Financial Aid Forms

Although the politically popular goal of financial aid simplification is getting more and more lip service lately, the reality is that financial aid applications and programs are likely to get only more complicated and frustrating, at least in the near future.

Secretary of Education Margaret Spellings made headlines this week by saying she would cut down the 10-page, 145-question Free Application for Federal Student Aid to a quick two-page, 27-question form. But she didn't say when. It won't be anytime soon. The Department of Education has already drafted the FAFSA parents and students will have to fill out starting next January, and—surprise, surprise—it is seven questions longer than this year's form. What's more, while Congress earlier this year ordered Spellings to simplify the application, Education Department officials say Congress also added requirements for new information that will probably mean even more FAFSA questions in the future about things like a student's foster care status, cooperative education earnings, and risk of homelessness.

Judith Scott-Clayton, one of the coauthors of a study that concludes that simplifying the FAFSA (by using tax information instead) could save colleges more than $2 billion and encourage more students to earn degrees, says that she and coauthor Susan Dynarski are heartened by the verbal support their ideas have received recently from both parties. But Scott-Clayton, who is a public policy Ph.D. candidate at Harvard, recognizes that simplification does have opponents. Those who give out financial aid—government officials, school financial aid administrators, and charity managers—like to ask students lots of nitty-gritty financial questions so they can direct scarce scholarship dollars to those who need them the most. "No one likes complexity, but people may have thought that complexity was a necessary evil; a trade-off for accurate targeting of aid," she says. Scott-Clayton hopes that the growing political acceptance of simplicity means that more officials have realized that "complexity doesn't have as many benefits, in terms of targeting, as one might have thought; and second, complexity is more than just an annoyance—it imposes real costs that may substantially undermine the goals of the program."

Robert Shireman, president of the the Institute for College Access and Success, says that while he's encouraged by Spellings's latest proposal, he's putting more hope in a congressionally ordered study of an even simpler idea: -Allowing parents and students to simply use their IRS filings as their financial aid application. "The goal should be to eliminate the difficult, show-stopper questions that require the applicant to do research or to be a tax expert," Shireman says. "To accomplish that goal, the department will have to go beyond this first step."

But since aid applicants will have to wait for the study, and eventual regulations, the ideal of a financial aid application on a postcard is still years away.