A little relief may be on the way for students and parents stressed out about college financial aid. In a rare example of bipartisanship, Democrats and Republicans are pushing for a simplification of the long, complicated, and confusing federal financial aid application that 10 million students and families fill out every year. House Democrats and Republicans last month overwhelmingly voted for a bill that would allow parents to check a box on their tax return to have their information sent to the Department of Education and thus automatically answer some questions on a Free Application for Federal Student Aid. Families would still have to fill out more than 90 other blanks in an electronic version of the FAFSA, but more than 60 of those remaining questions would be fairly easy ones such as the names, ages, and addresses of family members.
Congressional aides say the proposal is so popular that they expect it to become law sometime this year. They say that families could start to see easier FAFSAs by 2010. Pushing the drive for simplification are studies like one released last week by Harvard economists Susan Dynarski and Judith E. Scott-Clayton. They debunked the U.S. Department of Education estimates that it takes only one hour to fill out the 127-question FAFSA, and instead estimated it takes the average family about 10 hours to complete the form. One reason it takes so long: Many colleges, and 13 states, ask families to fill out the form before they have had time to fill out their taxes for the year. About half of families that use the FAFSA fill out the form initially with estimates and then have to file revisions after they finish their taxes.
By using only the data families already provide on their Internal Revenue Service form, even using the previous year's 1040, the Department of Education could fairly accurately calculate about 85 percent of families' need for financial aid. The economists estimate that a much simpler system would allow some rich people to collect inappropriate financial aid, but they also estimate that would account for less than 1 percent of families. They say that error rate would be worthwhile if making the system simpler might encourage millions more students to apply for aid and college.
However, the study also provides ammunition for those who argue that while simplification is a laudable goal, a tax return checkoff wouldn't necessarily help the families that need it the most. More than two thirds of low-income families don't have access to the Internet at home. This means they might not be able to fill out the online FAFSA and thus wouldn't necessarily be able to take advantage of a system in which tax data was electronically shared. In addition, people with extremely low incomes often don't file any tax forms, so they would get no benefit from the proposed tax return checkoff.