Middle Class Task Force Report: College Affordability

Friday, April 17th, 2009 at 12:56 pm
Middle Class Task Force Report: College Affordability
To see why the Middle Class Task Force is holding its third official meeting in St. Louis on "Making College More Affordable for our Families," you need only look at this chart from the staff report showing the rise of median family income over the past 30 years compared to the rise in tuition costs:


The Vice President and others from the Task Force, joined by 28-year educator Dr. Jill Biden, are delving deep into these issues at their meeting. And for those with kids in college, or even just experiencing a sense of dread as tuition costs skyrocket year after year while your children grow up, the full report is worth a read. It examines the causes of the rise in costs, and addresses them head on. It discusses the fundamental shift in the treatment of government assistance in the President’s budget proposal, from increasing loans and grants to protecting them from political back-and-forth in the budget process year to year, ensuring families will always be able to count on the help they expect. The report also examines innovative ways that colleges can cut down on their costs, which are a primary factor in tuition costs alongside state budget cuts. This is all related to the President’s goal that by 2020, America should once again lead the world in the proportion of adults with a college degree.


(Vice President Joe Biden listens as Secretary of Education Arne Duncan answers a question from the audience
during a Middle Class Task Force event on College Affordability at the University of Missouri St. Louis,
Friday, April 17, 2009. Official White House Photo by David Lienemann)

For those who have been through the process, or are facing the daunting task of applying for aid, the section on simplifying that process may be of particular interest:

Simplifying the Application Process for Aid

Another obstacle to federal student aid is the unnecessarily complicated application process that is often intimidating to families and students seeking loans. In order to qualify for aid, students or their parents must first complete the Free Application for Federal Student Aid (FAFSA) form, which contains well over 100 questions on income, assets, family characteristics, personal characteristics, and other items. Completing the FAFSA requires families to sift through paperwork and transfer numbers from tax forms that they may or may not have readily available.

The fact that well over one million students who could qualify for aid went without it during the 2003-2004 school year is one indication that the application process is too complicated. Furthermore, students who do not apply for aid due to the complexity of the process may be discouraged from applying to college at all, reducing college attendance rates. As a result, the complicated process works at cross-purposes with our goal of increasing college attendance and completion. Experts widely agree that the system is in need of change. There are two broad strategies to simplify the financial aid application process that are currently under discussion.

One strategy is to make it easier to complete the current form. For example, according to The Institute for College Access and Success (TICAS), about two-thirds of the questions on income and assets that are included in the FAFSA form can be automatically answered using IRS data. This means that the U.S. Department of Education could obtain this information directly from the IRS, and the student or family would only be required to answer the remaining questions. TICAS contends that a simplified process would have the added benefit of reducing errors among filers who erroneously transfer data by hand from their tax returns to the FAFSA form. It would also remove the burden of requiring colleges and universities to verify the income information on the FAFSA form using tax returns. The use of IRS data is also an attractive option because it can make the financial aid application process more efficient on its own or can be combined with other FAFSA simplification proposals. Importantly, compelling new research suggests that FAFSA simplification can substantially increase applications for student aid as well as subsequent college enrollment.

While appealing, simplification of the application process may not substantially address the length and complexity of the FAFSA for some, such as those who do not file tax returns with the IRS. Furthermore, even after removing the 22 questions that could be completed with data directly from the IRS, the form still would include nearly 100 questions. As a result, a second strategy for simplifying the application process for student aid is to shorten the form by reducing the number of questions asked. The scope of such simplification could be small or large, depending on the number of questions eliminated. The advantages of a short form would include greater transparency and the ability to make earlier determinations of aid. As an extreme example, economists Susan Dynarski and Judith Scott-Clayton have advocated for a form based on adjusted gross income and family size alone.14 Combined with IRS data, such an application would provide immediate, verifiable feedback on the amount of aid for which a student would be eligible. They argue that this would likely facilitate more timely decisions for families concerning higher education financing, and it would do so with only modest changes to the distribution of aid. This proposal represents just one possibility, but even a much less radical simplification would substantially ease the burden of filing the FAFSA on students and their families.

Strategies for simplifying the financial aid application process have potential merits, potential impacts on financial aid awards, and potential challenges in implementation. However, it is clear that simplification makes good policy sense, and that it would help families benefit from important resources available to help cover the cost of college.