Why We Should Cut The Federal Financial Aid Form From 130 Questions To 2

Last month, Senators Lamar Alexander (R-TN) and Michael Bennet (D-CO) announced a draft bill to simplify the process for students seeking federal financial aid.

Their Financial Aid Simplification and Transparency (FAST) Act would most notably kill the 130-question, 10-page Free Application for Federal Student Aid (FAFSA), which determines how much federal aid families will pocket.

The FAFSA has become especially crucial for providing students with Pell Grants (federal tuition subsidies), loans, and work-study jobs as tuition rates have skyrocketed.

However, the application is notoriously tedious, and some students avoid filling out altogether, despite being eligible for federal funding. Some 40% of the 20 million students who were enrolled in U.S. colleges in 2009 failed to file FAFSA forms, despite generally being eligible for the funds, according to the Chronicle for Higher Education.

As Secretary of Education Arne Duncan said during his conformation hearing, "you basically have to have a Ph.D. to figure that thing out."

The FAST Act would replace the FAFSA with a "two-question postcard" that asks applicants: "What is your family size? And, what was your household income two years ago?"

Here are three reasons why drastically simplifying the federal financial aid application is a great idea:

1. It gets federal tuition subsidies to students who need them most. Millions of college students miss out on loan-free aid each year. An analysis by student aid expert Mark Kantrowitz found that 2 million current college students would have qualified for Pell Grants during the 2011-2012 school year, and that 1.3 million of them would have received the full amount ($5,645 annually).

   Many of these students didn't apply because they lacked information or felt the form was too much work. A simplified form would make the process significantly easier for all applicants.

   The bill also solves another major drawback of the current FAFSA - that it asks families to provide their prior year income from their tax return, which can conflict with the April tax filing deadline. The bill proposed asking about two-year-old income, so families can find out about aid significantly before tax day.

2. Simpler forms have been shown to work. The idea to simplify FAFSA stems from a 2007 Brookings paper by Professors Susan Dynarski and Judith Scott-Clayton. Student aid applications are a burdensome gauntlet, and complexity is most damaging to students with the least resources.

   As one economics study showed, direct FAFSA assistance increased the college enrollment rate of low-income high school seniors by 8 percentage points, and the rate among older people with no college experience by about 2 percentage points.

3. The bill is a bipartisan effort. Both senators are well-established in the education field, and it restores some faith in Congress to see them work together. Senator Alexander served as the Secretary of Education under George H.W. Bush, and Senator Bennet is a former superintendent of Denver's public schools.

Concerns about the proposal have been raised. If the financial aid form ignores assets, why can't Bruce Wayne (or someone real with no family income but a huge trust fund) get a Pell Grant? As Dynarski notes in a recent article for The Upshot, the government currently ignores assets in education tax credits, and "for 90 percent of aid applicants, ignoring assets has no effect on the Pell amount, while for 98 percent it changes [their grant] by less than $500." The benefit of aid simplification outweighs the cost of a few rich sneaks.

There's also a concern that states and colleges may still produce complicated aid forms for their own need-based aid distribution. The current FAFSA form, while complex, is at least standardized for all applicants. If the federal government is truly dedicated to simplicity, however, it can respond by restricting aid to any institution that requires excess information.

A two-question postcard would kill a well-intended - but burdensome -policy, and capture the true purpose of student aid: making college a possibility for all.