[Senate Hearing 115-681]
[From the U.S. Government Publishing Office]
S. Hrg. 115-681
REAUTHORIZING THE
HIGHER EDUCATION ACT:
EXAMINING PROPOSALS TO
SIMPLIFY THE FREE APPLICATION
FOR FEDERAL STUDENT AID (FAFSA)
=======================================================================
HEARING
OF THE
COMMITTEE ON HEALTH, EDUCATION,
LABOR, AND PENSIONS
UNITED STATES SENATE
ONE HUNDRED FIFTEENTH CONGRESS
FIRST SESSION
ON
EXAMINING REAUTHORIZING THE HIGHER EDUCATION ACT, FOCUSING ON EXAMINING
PROPOSALS TO SIMPLIFY THE FREE APPLICATION FOR FEDERAL STUDENT AID
(FAFSA)
__________
NOVEMBER 28, 2017
__________
Printed for the use of the Committee on Health, Education, Labor, and
Pensions
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web: http://www.govinfo.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
27-728 PDF WASHINGTON : 2019
--------------------------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Publishing Office,
http://bookstore.gpo.gov. For more information, contact the GPO Customer Contact Center,
U.S. Government Publishing Office. Phone 202-512-1800, or 866-512-1800 (toll-free).
E-mail, po@custhelp.com.
COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS
LAMAR ALEXANDER, Tennessee, Chairman
MICHAEL B. ENZI, Wyoming PATTY MURRAY, Washington
RICHARD BURR, North Carolina BERNARD SANDERS (I), Vermont
JOHNNY ISAKSON, Georgia ROBERT P. CASEY, JR., Pennsylvania
RAND PAUL, Kentucky AL FRANKEN, Minnesota
SUSAN M. COLLINS, Maine MICHAEL F. BENNET, Colorado
BILL CASSIDY, M.D., Louisiana SHELDON WHITEHOUSE, Rhode Island
TODD YOUNG, Indiana TAMMY BALDWIN, Wisconsin
ORRIN G. HATCH, Utah CHRISTOPHER S. MURPHY, Connecticut
PAT ROBERTS, Kansas ELIZABETH WARREN, Massachusetts
LISA MURKOWSKI, Alaska TIM KAINE, Virginia
TIM SCOTT, South Carolina MAGGIE WOOD HASSAN, New Hampshire
David P. Cleary, Republican Staff Director
Lindsey Ward Seidman, Republican Deputy Staff Director
Evan Schatz, Democratic Staff Director
John Righter, Democratic Deputy Staff Director
(ii)
C O N T E N T S
----------
STATEMENTS
TUESDAY, NOVEMBER 28, 2017
Page
Committee Members
Alexander, Hon. Lamar, Chairman, Committee on Health, Education,
Labor, and Pensions, opening statement......................... 1
Murray, Hon. Patty, Ranking Member, Committee on Health,
Education, Labor, and Pensions, opening statement.............. 3
Witnesses
McCallin, Nancy, President, Colorado Community College System,
Denver, CO..................................................... 7
Prepared Statement........................................... 9
Summary Statement............................................ 12
Williams, Elaine, Shelter Diversion Specialist, YWCA of Richmond,
Richmond, VA................................................... 13
Prepared Statement........................................... 14
Summary Statement............................................ 17
Scott-Clayton, Judith, Associate Professor of Economics and
Education, Teachers College, Columbia University, New York, NY. 18
Prepared Statement........................................... 19
Summary Statement............................................ 24
Draeger, Justin, President, National Association of Student
Financial Aid Administrators, Washington, DC................... 25
Prepared Statement........................................... 27
``The National Association of Student Financial Aid
Administrators (NASFAA)''.................................. 31
Rueben, Kim, Senior Fellow, Urban-Brookings Tax Policy Center at
the Urban Institute, Washington, DC............................ 34
Prepared Statement........................................... 36
Summary Statement............................................ 43
----------
ADDITIONAL MATERIAL
Hatch, Hon. Orrin:
Prepared statement submitted for the Record.................. 63
QUESTIONS AND ANSWERS
Responses by Justin Draeger to questions of:
Senator Murkowski............................................ 63
Senator Warren............................................... 64
Senator Whitehouse........................................... 65
Senator Hassan............................................... 67
Responses by Nancy McCallin to questions of:
Senator Murkowski............................................ 68
Senator Warren............................................... 69
Senator Whitehouse........................................... 70
Senator Hassan............................................... 72
Responses by Kim Rueben to questions of:
Senator Murkowski............................................ 73
Senator Whitehouse........................................... 74
Responses by Judith Scott-Clayton to questions of:
Senator Murkowski............................................ 76
Senator Warren............................................... 76
Senator Whitehouse........................................... 77
Senator Hassan............................................... 79
Responses by Elaine Williams to questions of:
Senator Whitehouse........................................... 80
Senator Hassan............................................... 81
REAUTHORIZING THE
HIGHER EDUCATION ACT:
EXAMINING PROPOSALS TO
SIMPLIFY THE FREE APPLICATION
FOR FEDERAL STUDENT AID (FAFSA)
----------
Tuesday, November 28, 2017
U.S. Senate,
Committee on Health, Education, Labor, and Pensions,
Washington, DC.
The Committee met, pursuant to notice, at 10:06 a.m., in
room SD-430, Dirksen Senate Office Building, Hon. Lamar
Alexander, Chairman of the Committee, presiding.
Present: Senators Alexander [presiding], Murkowski, Young,
Murray, Casey, Bennet, Kaine, Franken, Warren, and Hassan.
OPENING STATEMENT OF SENATOR ALEXANDER
The Chairman. The Senate Committee on Health, Education,
Labor, and Pensions will please come to order. I'm usually on
time, especially for an education hearing, and excuse me for
being late.
This is the first in a series of hearings as we finish our
consideration of proposals to reauthorize the Higher Education
Act. Today, we're looking at ways to simplify the Free
Application for Federal Student Aid, or FAFSA, to make it
easier for students to apply for Federal financial aid.
Senator Murray and I will each have an opening statement.
Then we'll introduce the witnesses, and after your testimony,
Senators will have 5 minutes of questions. There's a lot going
on today in other committees, so Senators may be coming and
going because of the tax bill.
Nearly 4 years ago, at a hearing before this Committee, an
unusual thing happened. Four witnesses from diverse backgrounds
agreed that almost all of the 108 questions on the Free
Application for Federal Student Aid, or FAFSA, are unnecessary.
The FAFSA is the government form 20 million families fill out
every year in order to qualify for the $140 billion in Federal
aid that helps nearly 20 million students attend 6,000 colleges
and universities.
Senator Bennet and I have spent a lot of time holding this
up in the air to let people--remind people of all these
questions. Even though most people fill it out online, there's
still the same number of questions.
At the end of that hearing, I asked the witnesses if they
could summarize their proposals to simplify the FAFSA in four
separate letters to us. They said they could do it together in
one letter.
Senator Bennet and I then had the same reaction. If there
is that much consensus on how to make it easier for nearly 20
million families to apply for Federal aid, we asked, why don't
we actually do it? Well, that was 4 years ago. Senator Bennet
and I set about to turn 108 questions into two on a postcard
that Dr. Scott-Clayton, who is also here today, recommended in
her testimony 4 years ago.
Let's take a moment to talk about why simplifying the FAFSA
is important. First, nearly 20 million students fill out this
form every year. This means if you receive a Federal grant or a
loan as a freshman, you'll have to fill it out again to
continue to receive aid for your sophomore year and beyond.
While experienced financial aid officers tell us it does
not take long to complete, we have heard over and over again
from parents, students, and higher education officials how
difficult it is the first time.
Second, this complexity frustrates the goal of the Pell
Grant, which is to help low-income students attend college,
because it discourages them from applying for aid. I know in
Tennessee, where 2 years of post-secondary education is now
free, the complexity of the FAFSA is the single biggest
impediment to more students taking advantage of what we call
Tennessee Promise. The former president of Southwest Tennessee
Community College in Memphis told me he believes that he loses
1,500 students each semester because of the complexity of the
form.
Third, this complexity wastes time and money that could be
better spent helping students choose the right college or major
or develop financial literacy skills so they can understand the
impacts of taking out student loans.
After 4 years of discussion over how to simplify the FAFSA,
it is time to come to a result. Our first order of business
after the first of the year will be to mark up a
reauthorization of the Higher Education Act. My central focus
will be to make it simpler and easier for students to apply for
Federal aid and to pay their loans back, and to cut through the
jungle of red tape that Federal law and regulations imposes so
that college administrations can spend their time and money
instead for the benefit of students. We have a number of
bipartisan proposals before the Committee that seek to do those
things.
After our hearing 4 years ago, Senator Bennet and I, along
with Senators Burr, Isakson, King, and Booker, introduced our
legislation to cut the 108 FAFSA questions down to two
questions. We have listened to students, financial aid
officers, and college presidents. We have done this in a
bipartisan way for 4 years. We will hear about some of those
good ideas today.
For example, Senator Murray has a bill to simplify the
FAFSA process for homeless students and students without
parents.
We worked with the Obama administration to allow students
to fill out the FAFSA with their tax information from 2 years
before they enroll in college, instead of one, so they could
file in the fall, rather than having to wait until spring.
The result of all this is that Senator Bennet and I are now
completing work on a bill that would reduce the FAFSA from 108
questions to as few as 15 and no more than 25 questions,
depending on how you answer questions about your family. We
will do this principally by taking the tax information that
Americans give to the Federal Government and incorporating that
tax information into the FAFSA.
Over and over again, across Tennessee, I have been asked,
``If I have already given my tax information to the Federal
Government, why do I have to give it again for the FAFSA?'' My
answer is that you shouldn't have to. Once is enough.
Our proposal will also tell students the amount of their
Pell Grant, money they do not have to pay back, before they
apply to colleges instead of after they have already been
accepted to schools.
I have a long perspective on this. As Education Secretary,
I oversaw the implementation of the first FAFSA in January
1993, shortly before I left office. While the FAFSA is a
complex form today, it was actually created then to reduce the
burden on students by combining Federal, state, and
institutional-based financial aid applications into one single
application. That first FAFSA had four pages of questions and
12 pages of directions.
Today's FAFSA is 10 pages, with directions included on the
form, plus an additional 66 pages of instructions.
Now, 25 years later, I sit here as Chairman of the Senate
Education Committee trying to update the Higher Education Act
and once again simplify how students apply for Federal
financial aid. Over the next couple of months, I want our
Committee to listen to the experts, discuss different
proposals, and write and pass a final bill. Twenty-five years
after the first FAFSA and 4 years after the first hearing, it
is time to bring this discussion to a result.
We should be able to say to the nearly 20 million families
who fill out the FAFSA, instead of answering 108 questions, you
will only have to answer about 15 to 25. Once is enough to give
your basic information about family size and income to the
Federal Government. Instead of waiting until you've been
admitted to college, we'll tell you about your Pell Grant while
you're still shopping around for schools.
Senator Murray.
OPENING STATEMENT OF SENATOR MURRAY
Senator Murray. Thank you very much, Mr. Chairman, and I
want to thank all of our witnesses for being here today. I look
forward to hearing from all of you about your experiences with
the Free Application for Federal Student Aid, the FAFSA form,
and your thoughts on how we can best improve access to Federal
financial aid.
However, navigating FAFSA is just one of the many
challenges today's students are facing, and for them, these
issues don't come up one at a time. They are all wrapped
together. College students are taking on mountains of debt and
are concerned about finding a job after school, or whether
their school or program is safe, whether it's preparing them
for the workforce and is respected by employers, and a lot
more.
So in order to help our students, we have to make sure
we're trying to solve the big problems along with the smaller
ones impacting students and families. We need to tackle the
issues that impact college students the most, and I believe on
this Committee that has done so much good work together that we
can do that.
That's why it's so critical that we take a comprehensive
approach to update our Nation's Higher Education Act. Chairman
Alexander and I have heard concerns expressed that pursuing a
comprehensive approach to reauthorize this law would be too
difficult, and that in these partisan times, we'll never be
able to get it done, and that's what we heard, by the way,
before we did No Child Left Behind. People said it was too
toxic to touch and that we would never be able to pass a true
reauthorization. They said we should just focus on low-hanging
fruit and leave the rest for another time and another Congress.
Thankfully, Chairman Alexander and I pushed those naysayers
aside. We got to work and we got it done. So I'm hopeful and
confident we can work together on a comprehensive approach to
reauthorizing the Higher Education Act the same way. There are
simply too many important issues facing students and working
families when it comes to accessing affordable, high-quality
education. We've got to take a holistic approach to higher
education reform to build the system that helps the most
students.
We can work together to address issues like FAFSA
simplification, and I know how important that is. But we must
at the same time work to tackle the biggest problems this
critical law aims to address, because I believe in order to
truly solve the challenges students face, we have to address
four major issues: the rising cost of college; schools and
programs that are not held accountable for student success;
barriers for working families, students of color, and first
generation students to attend college; and ongoing threats to
learning in a safe environment. I want to go into each of those
a bit, because they're all important.
First, we've got to address the skyrocketing cost of
college and find ways for more students to be able to graduate
without debt, and we must consider the full cost of college
beyond just tuition: food, transportation, housing, textbooks,
child care. Second, we need to make sure colleges and workforce
training programs are producing good outcomes for students and
preparing them for the jobs of tomorrow and are being held
accountable when that isn't the case. That has to include
providing students with the information they need to make smart
choices about their future before they enroll in classes with
an expensive price tag.
Third, we need to improve historically underrepresented
students' ability to access and succeed in higher education.
Finally, we need to ensure every student has the ability to
learn in a safe environment, free from discrimination and
violence, and that must include doing more to combat the
national epidemic of campus sexual assault and beginning to
address dangerous hazing practices.
Now, of course, simplifying the FAFSA should be part of our
comprehensive reauthorization. I have heard from people across
my state how complicated and difficult filling out the
application can be, and I know everyone has heard the same
thing.
Simplifying FAFSA would help ease the burden of college
cost for students who may be leaving money on the table, and by
addressing concerns of students from nontraditional
backgrounds, including homeless and foster students, we can
help open the doors of opportunity to students who otherwise
might not get the financial aid they need. All the front and
back end hurdles of financial aid, security requirements,
verification, refiling the form each year, can create real
barriers for students who deserve our help.
While it's clear simplifying FAFSA would help students, it
alone cannot solve the challenges that families across the
country face in addressing and affording higher education. So
this is a good first step, and I hope we can continue this
conversation with a comprehensive solution in mind and have
hearings on a variety of issues impacting students and their
families.
This Committee has a record of bipartisan solutions to big,
complex problems, and I am confident we can find a bipartisan
path forward to tackle all these issues head on. Our students
are counting on it.
Before I close, Chairman Alexander, I want to make one
final point. It is so important that I need to mention it
before we get too deep into higher education issues. One of the
largest hurdles to passing any new bipartisan education laws is
how Secretary DeVos and the Department of Education are today
currently picking and choosing when to follow laws written by
this Committee and passed by the Congress.
Right now, Secretary DeVos and her Department are blatantly
violating the current K-12 law that we just updated 2 years
ago. They won't follow the very statuary language this
Committee settled on. You and I worked together on Every
Student Succeeds Act. We reached an agreement that gives states
flexibility while including some clear requirements for states
in the statute. The requirements are in black and white,
they're in the law, and have nothing to do with regulations.
I am deeply troubled that violations of the law are being
ignored by the Department of Education. I want to give you an
example. The law requires in statute that states identify three
distinct categories of schools for improvement: bottom 5
percent of schools, all schools where one subgroup of students
is consistently underperforming, and schools where any subgroup
is performing as poorly as the bottom 5 percent. But plans are
now being approved that violate this, and there are more
examples I'd be happy to talk through.
But, Chairman Alexander, if the Department is today
ignoring the agreement that we made in law and choosing to
implement whatever it feels like, which I believe they are in
the approval of state plans so far, then this Committee needs
to hear from the Secretary directly about how she intends to
follow the laws that Congress agrees to, especially as we begin
now to reauthorize the HEA.
I'm confident we can address this issue. I hope we can hear
from the Department soon, and then I believe we can begin
addressing the critically important issues in higher education.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Murray, for your comments
on both subjects. Of course, I look forward to talking with you
about the latter point on following the law. You and I agree on
that. We even put provisions in the law to prohibit a Secretary
from doing certain things.
As far as higher education, I agree with what you said. I'm
eager to sit down and visit with you and get started on
reauthorizing the Higher Education Act. There's no reason we
can't do that together. We've figured out how in this Committee
to tackle big issues and accommodate lots of points of views
and come out with results, and I think people appreciate it
when we do. So the sooner we get going on that, the better, and
my hope would be that we could take the bipartisan work that
we've done over the last three or 4 years, really, and turn it
into a result in the first quarter of next year, and I look
forward to working with you on that.
I'm pleased to welcome our witnesses to today's hearing
focused on simplifying the FAFSA. I'd like to ask Senator
Bennet to introduce the first witness, Dr. McCallin.
Senator Bennet. Thank you, Mr. Chairman, and I'd like to
thank you and Ranking Member Murray for focusing our attention
on this important issue. Mr. Chairman, I want to thank you for
your partnership over these 4 years on FAFSA. I know our first
witness agrees with what we're trying to do.
This morning, it's my pleasure to introduce Dr. Nancy
McCallin from my home State of Colorado. For the last 13 years,
Dr. McCallin has served as President of the Colorado Community
College System, the largest system in the state that educates
one out of every three of our undergraduate students.
During Dr. McCallin's tenure, Colorado's Community College
System has launched ambitious initiatives to increase student
success and make college more affordable. Under her leadership,
the system revamped its remedial education program and
streamlined the curriculum so students can graduate faster and
with less debt. She increased transfer agreements with 4-year
colleges so more students can pursue a 4-year degree, and she
expanded concurrent enrollment for high school students by 200
percent, saving our students and families roughly $90 million
in tuition costs.
Her leadership in higher education is just the latest
chapter in a career of public service. Previously, Dr. McCallin
served in the administration of Governor Bill Owens and as
Chief Economist for the Colorado Legislature.
Earlier this year, Dr. McCallin announced her retirement.
So let me end by thanking her for her service to Colorado and
for making the time to join us this morning. We look forward to
her testimony.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Bennet.
I now recognize Senator Kaine to introduce Ms. Williams.
Senator Kaine. Thank you, and welcome to all.
To the Chair and Ranking, it is really an honor today to
introduce one of our witnesses, Elaine Williams, who is a
Richmonder just like me, but is here because of her really
inspirational work as a community advocate. Ms. Williams is a
recent graduate of the Virginia Commonwealth University School
of Social Work, and I've got both VCU grads and the School of
Social Work grads on my staff. It's a wonderful program.
She currently works as a Diversion Specialist with the
YWCA, helping people avoid homelessness. She's passionate about
that, because she was an unaccompanied homeless child coming
into college and grappling with FAFSA, especially not just the
form, but the verification requirements of FAFSA. So I hope
we'll get into not just the form, but some of the verification
issues.
Now, in addition to working at the YWCA, she has co-founded
Change the World RVA, which is a nonprofit organization to
serve youth experiencing homelessness in Richmond. When she was
in college, she started and then worked with a group called
Advocates for Richmond Youth. A passion for homeless kids is a
big driver for her.
So thank you for your dedication and for your inspirational
service, and we look forward to hearing from you today about
how we can better serve young people who face some of the same
challenges you faced.
The Chairman. Thank you, Senator Kaine.
Our third witness is Dr. Judith Scott-Clayton. She is
Associate Professor of Economics and Education at Teachers
College, Columbia University. She holds positions at the
National Bureau of Economic Research, Community College
Research Center, and the Brookings Institution. She has
testified before the Senate twice earlier, including in the
hearing 4 years ago that led to the FAST Act. She made her
first FAFSA simplification proposal in 2007. She earned her
Ph.D. from Harvard.
Our next witness is Mr. Justin Draeger, President of the
National Association of Student Financial Aid Administrators.
His organization represents financial aid administrators that
serve 90 percent of American college students. Prior to
becoming president of his organization, Mr. Draeger worked as a
financial aid director, regulatory and policy analyst, and
spokesperson.
Our final witness is Dr. Kim Rueben, Senior Fellow in the
Urban Brookings Tax Policy Center at the Urban Institute. Her
research focuses on education finance, fiscal institutions,
public sector labor markets, state and local tax policy and
budgets. She conducted a detailed analysis of various FAFSA
simplification proposals offered today. She earned her Ph.D.
from MIT.
I look forward to everyone's testimony. Thank you for being
here. As a reminder, if you'll summarize your testimony in 5
minutes, that'll leave more time for Senators to ask questions.
I would simply mention that this is what we call a
bipartisan hearing, which means that Senator Murray and I have
agreed on the subject and we've agreed on the witnesses. So it
ought to be a good discussion.
Why don't we begin with Dr. McCallin, and we'll go right
down the line.
Welcome, Dr. McCallin.
STATEMENT OF DR. NANCY MCCALLIN
Dr. McCallin. Thank you, Chairman Alexander, Ranking Member
Murray, and Members of the Committee. Thank you for the
opportunity to speak today.
As Senator Bennet noted, the Colorado Community College
System is the largest system of higher education in the State
of Colorado, serving approximately 138,000 students at 13
colleges in 39 locations. Despite the fact that we
intentionally keep our tuition low, our students do struggle to
pay for college.
Approximately 40 percent of our students receive some form
of Federal or state financial aid that requires filling out the
FAFSA form, and when you factor out our non-high school
students, it's even higher. About half of our students qualify
for Federal financial aid or state financial aid through the
form. All together, our students receive $211 million of
Federal financial aid, $90 million of which is the Pell Grant,
and $38.3 million in state aid to pursue their postsecondary
education.
Increasingly, we know that the ticket to the middle class,
the ticket to succeeding in this economy today is to have a
postsecondary degree. In fact, according to Georgetown
University, 74 percent of our new jobs that are being created
in the State of Colorado by 2020 require some form of
postsecondary education. We know that completing the FAFSA form
is difficult, it's complex, and it's daunting for many of our
students, particularly for first-generation students that
comprise 54 percent of our overall student population.
Community colleges have persistently had the lowest FAFSA
completion rate of any sector of higher education despite the
fact that we know we have the largest number and the largest
share of low-income students. By not completing these FAFSA
forms, what we see happening is students foregoing their
opportunity for higher education and their opportunity to
succeed in this increasingly complex and competitive economy.
When asked why they did not complete the form, they had
numerous reasons. Some said it was too much work. Many said
they didn't have the information with which to apply. They
thought they were ineligible. They did not want to go into debt
despite the fact that the FAFSA form determines what your Pell
eligibility is, and that does not require you to go into debt.
Without applying, many students have missed the opportunity to
get those grants to further their education.
As was mentioned previously here, the lengthy application
with its 66 pages of instructions is the first barrier to
completing the FAFSA form. The next barrier, and a significant
challenge for us, is the verification process. Our financial
aid administrators estimate that one-quarter of their time is
spent on the verification process.
In our system, 94,169 students submitted the FAFSA form
last year. But only 53,582 actually completed the form, and of
those 94,000 students, approximately 37,000 were selected for
verification, which is somewhat higher than the national
average. Of those students who were selected for verification,
only 16,728 completed the process.
The complexity and length of the form and the confusion
over what number to put in what box on the form altogether has
really limited and precluded access to higher education, and
this simple act of simplifying the form really could go a long
way toward improving access and helping students get their
degrees as well as, therefore, compete in the economy.
We know that if we were able to free up some of our
financial aid administrators' time and not have them have to do
as extensive verification support, we could increase intensive
advising strategies that have proven to increase retention
rates 27 percentage points and completion rates anywhere from 6
to 11 percentage points. We could do mentoring much more than
we do today. We could help in financial literacy more so than
we do today. We could provide more increased support for
scholarship applications and have pre-collegiate outreach.
In fact, for Colorado, one of the biggest concerns we have
is that of 100 ninth graders today, only 43 are going on to
college. That is abysmal, and it's abysmal for students of
color, in particular. So as a result, the pre-collegiate
outreach could definitely help students pursue their goals.
So thank you for your attention to helping to improve
higher education for our students, and I'm open to any
questions you may have.
[The prepared statement of Dr. McCallin follows:]
Prepared Statement of Nancy J. McCallin
Chairman Alexander, Senator Murray, Members of the Committee, thank
you for the opportunity to speak with you today. The Colorado Community
College System (CCCS) is the state's largest provider of higher
education and career training in the State of Colorado, serving
approximately 138,000 students annually at 13 colleges and 39 locations
across Colorado. Despite being by far the most affordable public higher
education option in the state, many of our students struggle to pay for
college.
FAFSA's Role in College Enrollment and Access
Approximately 40 percent of our students receive some form of
financial aid in order to finance their post-secondary education, and,
as you know, the Free Application for Federal Student Aid (FAFSA) must
be completed in order to receive aid. In Colorado, the FAFSA is also
used to establish eligibility for both state and institutional aid.
Completion of the FAFSA often determines whether a prospective student
attends college and subsequently stays enrolled. Altogether, our
students received $211.1 million in Federal financial aid (43 percent
of which was Pell Grants) and $38.3 million in state financial aid in
academic year 2016-17, all of which relied on filling out the FAFSA.
Unfortunately, completing the current FAFSA is a difficult and daunting
task for many of our students, particularly for first-generation
college students who comprise 54 percent of our students. We therefore
commend the Committee for focusing on this critical element of college
attainment.
In Colorado, 74 percent of all new jobs will require some form of
post-secondary degree or certificate by 2020 according to the Center
for Education and Workforce at Georgetown University. If a student does
not go to college, he or she will have difficulty being successful in
this increasingly complex, global economy and the shortage of skilled
labor will continue to rise. Reducing the complexity of the FAFSA will
help remove a barrier that precludes access to higher education. Some
progress has been made in this regard through adoption of the prior-
prior year tax information, the earlier FAFSA launch, and the IRS data
retrieval tool, but more remains to be done.
Community colleges persistently have the lowest FAFSA application
completion rate of any sector of higher education (see table 1). This
is especially troubling given the fact that, overall, community college
students and their families have lower incomes than students in any
other non-profit sector of higher education. Survey results show that
nearly 10 percent of community college students stated that the FAFSA
application was ``too much work'' as a reason for not completing it
(see table 2). A higher percentage of community colleges students (15
percent) said that the reason why they did not file a FAFSA was due to
not having information about how to apply. Overall, the two major, and
interrelated, reasons why students did not file a FAFSA were either
that they ``thought they were ineligible'' or that they did not think
there was ``a need'' to apply. About one-third of the students said
that they did not apply because they did not want to take on debt,
which means that, in the process, they potentially missed the
opportunity to receive Pell or state grants that are not debt. All of
this information highlights the difficulty and misunderstanding
surrounding the FAFSA process.
This information indicates that prospective students need more
concrete information about their eligibility status for aid,
distinguishing between grants and loans, and understanding the costs of
college. It is perhaps understandable, if not acceptable, that, for
example, an older, working student who is enrolling at a community
college to take just a course or two, might think that financial aid is
not available to them--they may well be more focused on simply
integrating their coursework into their busy lives. At CCS, we allocate
considerable resources toward support services to help our students
understand the costs of going to college, beyond tuition and fees, and
how to fill out the FAFSA form as a starting point to pay for college.
One of the major challenges faced by our students in completing the
FAFSA is the verification process. Our financial aid administrators
estimate that they spend 25 percent of their time annually supporting
the current FAFSA and verification process. Some of these activities
include:
Preparing verification forms
Assisting students in accurately completing verification
forms
Advising students on the acceptable documentation
required for verification
Updating any differences in the FAFSA data
Once the corrected data is returned by the Federal
Processor, an additional review must be made to ensure the student
receives the proper amount of aid
In our system, we had 94,169 students submit the FAFSA last year,
but only 53,582 actually completed the financial aid process. Of the
94,169 who applied, 37,008 (39.3 percent) were selected for
verification and only 45 percent of those selected for verification
completed the process (16,728 students). The complexity of the form is
one of the reasons for the reduced number of students actually
receiving aid. Simplification of the FAFSA form and process could make
a significant difference in the ability of students to access Federal
and state aid to pursue their college degree. This experience is
similar to one that we have heard from other community colleges across
the country.
Therefore, we urge the Committee to work to create both a form and
related subsequent administrative processes that obviates the need for
such widespread verification.
It is important to keep in mind that staff time currently focused
on FAFSA support could be re-directed to wrap-around student services
that are proven to increase student retention and completion. Community
colleges often know strategies that help students succeed, but we
currently lack the resources to provide them. Some of these student
success strategies that could be attained through repurposed staff time
include:
Additional intensive academic advising, including
pathways to success with an individual student's course planning
throughout their program. For example, an intentional advising model,
called Navigator, was piloted by CCCS. Results showed significant
increases in persistence rates for students who met with a Navigator
versus students who did not. The program resulted in higher retention
rates (up 27 percentage points) and completion rates (up 6-11
percentage points). This program requires significant personnel
resources that could be freed up through FAFSA simplification.
Mentoring throughout a student's education in addition
strong focus in their first term.
Assist in finding solutions for students to resolve
temporary roadblocks that would otherwise result in permanent
educational goal derailment. This could include referrals for resources
such as tutoring or financial emergencies.
More robust financial literacy programs to assist in
student loan debt management.
Programs to assist in the scholarship application
processes to reduce student debt.
Pre-college outreach and preparation for high school and
middle school students to assist the families in making college
expenses affordable.
Conclusion
Thank you for the opportunity to present these views on this
critical topic. We need every potential community college student to
have an accessible and transparent way to receive Federal student
financial aid. There is no simple solution to making this happen, but
progress is clearly being made and reauthorization of the Higher
Education Act opens the prospect for more progress. I would be happy to
answer any questions that you may have.
Table 1: FAFSA Application by Sector
FAFSA Applications by Sector *
----------------------------------------------------------------------------------------------------------------
Change from Change from Change from
2003-04 2007-08 2011-12 2003-04 to 2007-08 to 2003-04 to
2007-08 2011-12 2011-12
----------------------------------------------------------------------------------------------------------------
All 58.3% 58.5% 70.1% 0.2% 11.6% 11.8%
----------------------------------------------------------------------------------------------------------------
Community Colleges 44.5% 43.0% 62.0% -1.5% 19.0% 17.5%
----------------------------------------------------------------------------------------------------------------
Difference between all and 13.8% 15.5% 8.1% ............. ............. .............
cc
----------------------------------------------------------------------------------------------------------------
Public primarily non- 60.7% 51.3% 72.2% -9.4% 20.9% 11.5%
baccalaureate
----------------------------------------------------------------------------------------------------------------
Public associate and 44.1% 42.4% 61.0% -1.7% 18.6% 16.9%
certificate
----------------------------------------------------------------------------------------------------------------
* National Postsecondary Student Assistance Survey (NPSAS). This
table shows that there was a significant increase in the percent of
students completing the FAFSA in 2011-12 from previous years,
especially in the case of students attending community colleges.
Without another NPSAS dataset, it is difficult to determine if the
2011-12 figures were ``peak'' or a beginning of an upward or a downward
trend.
Table 2: Reasons for not applying for Federal student aid by select
institution categories
Reasons for not applying for Federal student aid by select institution categories, 2011-2012 *
----------------------------------------------------------------------------------------------------------------
Community Public primarily Public associate
All Institutions Colleges non-baccalaureate and certificate
----------------------------------------------------------------------------------------------------------------
Forms were too much work 9% 9% 9% 9%
----------------------------------------------------------------------------------------------------------------
No need 43% 39% 32% 40%
----------------------------------------------------------------------------------------------------------------
Thought ineligible 44% 44% 47% 44%
----------------------------------------------------------------------------------------------------------------
Did not want to take on the debt 33% 33% 37% 33%
----------------------------------------------------------------------------------------------------------------
No information about how to 13% 15% 12% 15%
apply
----------------------------------------------------------------------------------------------------------------
* NPSAS Undergraduates
______
[Summary Statement of Nancy J. McCallin]
The Colorado Community College System is the state's largest
provider of higher education and career training in the State of
Colorado, serving approximately 138,000 students annually at 13
colleges and 39 locations across Colorado.
Approximately 40 percent of our students receive some sort of
Federal and/or state financial aid that requires the completion of the
Free Application for Federal Financial Aid. Our students receive $211.1
million in Federal aid and $38.3 million in state aid to pursue
postsecondary education using this application.
In order to thrive in today's complex economy, a postsecondary
certificate or degree is necessary. In Colorado, 74 percent of all jobs
will require a postsecondary credential by 2020.
Completing the FAFSA form is a difficult and daunting task for many
students, particularly for first-generation college students that
comprise 54 percent of our students. Reducing the complexity of the
FAFSA will help remove a barrier that precludes access to higher
education.
Community colleges have the lowest FAFSA completion rate of any
sector in higher education, yet community colleges also have the
largest number and share of low-income students. By not completing the
FAFSA these students miss out on the opportunity to receive Pell and
state grants that provide them access to higher education and assure
they will be competitive in the economy.
The lengthy application with its 66 pages of instructions is the
first barrier to completing the FAFSA. Another major challenge in
completing the FAFSA is the verification process. Our financial aid
administrators estimate they spend 25 percent of their time supporting
the verification process. In our system, 94,169 students submitted the
FAFSA form last year, but only 53,582 completed the process. Of these
94,169 students who applied, approximately 37,000 were selected for
verification and only 16,728 of those selected for verification
completed the process. The complexity and length of the application
clearly limits access to important financial help for our students.
If we were able to free up some of the time our financial aid
administrators spend on FAFSA verification support, we could re-direct
resources to important student success strategies that improve student
retention and completion such as intensive advising, mentoring,
financial literacy, increased support for scholarship applications, and
pre-collegiate outreach.
Thank you for your attention in helping improve access to higher
education for our students.
______
The Chairman. Thank you, Dr. McCallin.
Ms. Williams, welcome.
STATEMENT OF ELAINE WILLIAMS
Ms. Williams. Good morning. I would like to thank Chairman
Alexander, Ranking Member Murray, and the Members of the HELP
Committee for the opportunity to speak about my experiences.
The problem of youth homelessness is bigger than many
people realize. A new national report from Chapin Hall at the
University of Chicago found that at least 700,000 youth between
the ages of 13 and 17 and 3.5 million young adults between the
ages of 18 and 25 experience homelessness in a year. This
represents one in 30 youth between the ages of 13 and 17 and
one in 10 young adults between the ages of 18 and 25. I was one
of them.
My experience of homelessness began during middle school.
My mother was not able to take care of me due to struggles with
addiction and mental health problems. Although she is doing
much better now, my mother lost custody of me at one point. I
moved in with relatives without a stable place to stay six
different times. Two months before high school graduation, I
was put out and had to stay with one of my friends.
In spite of all these struggles, I knew I had to continue
to pursue my dreams of college. I grew up in poverty and did
not see anyone around me going to college. I wanted something
different for myself and my future. But as I tried to fill out
the FAFSA, the counselor kept asking for my mother's financial
information. I finally broke down and told her that my mother
was not in the picture.
The counselor contacted the high school's McKinney-Vento
social worker, who assured me that I could go to college. She
brought me the unaccompanied homeless youth information that
allowed me to fill out the FAFSA. Soon after, I was accepted
into Virginia Union University.
Unfortunately, I needed to live on campus at Virginia Union
in order to be able to go to school, which added to the cost. I
had to work, which prevented me from fulfilling the hours
needed that were required for one of the scholarships, so I
lost that scholarship. I asked the financial aid office for
assistance, and they told me to take a year off and work.
I worked full time until I was ready to try college again,
this time at Virginia Commonwealth University. Although I had
many great experiences at VCU, the FAFSA process presented
obstacles. They required me to submit two letters to verify my
unaccompanied youth status as well as other kinds of
documentation. It took 4 months for everything to clear, so I
lost out on grants awarded on a first come, first serve basis.
I had to take out more loans.
The following year, my FAFSA experience was even worse. The
financial aid office told me that because I was no longer in
high school, they wouldn't accept a letter from my McKinney-
Vento school social worker. They demanded a letter from certain
kinds of homeless shelters, but there are no homeless shelters
for youth in Richmond, and the adult shelters told me to go
stay with family members, which was impossible.
Every single year, it was daunting to have to answer the
questions 53 and 54. It was re-traumatizing to have to explain
my situation over and over again to strangers and feel like
they didn't believe me. The FAFSA determination process also
contributed to my student debt, because I lost out on a lot of
grants due to the delays caused by documentation requirements.
While the FAFSA was my No. 1 hurdle in completing college,
I had other challenges, especially housing and mental health
services. Despite all of that, I graduated in May 2017 with my
Bachelor's in Social Work. I now work as a Shelter Diversion
Specialist at the YWCA in Richmond. I am a role model to my
four young siblings and my peers in the community. Through the
nonprofit I helped to co-found, I am able to serve as a mentor
and work with other students who are experiencing homelessness.
My three top recommendations for Congress to make the FAFSA
simpler for homeless and foster youth are: eliminate the
requirement for unaccompanied homeless youth to have their
status determined each year. This requirement creates more
paperwork burdens for students and it adds to our trauma.
Second, reduce the documentation requirements for
determining that a youth is homeless and unaccompanied. If a
youth has documentation from any authorized source, the
financial aid office should accept it.
Third, require colleges and universities to designate a
staff person, a single point of contact, to help homeless youth
and foster youth just like McKenney-Vento liaisons in K through
12. We need a person who connects us to resources both on and
off campus and helps us navigate financial aid and other
supports.
In closing, I would like to thank you for this opportunity,
and I hope my testimony will help inform decisions about the
FAFSA for millions of youth like me.
[The prepared statement of Ms. Williams follows:]
Prepared Statement of Elaine Williams
Good morning. I would like to start by saying thank you to Chairman
Alexander, Ranking Member Murray, and other Members of the HELP
Committee, for this opportunity to share my experiences with you today.
The problem of youth homelessness is bigger than most people
realize. A new national report from Chapin Hall at the University of
Chicago found that at least 700,000 youth between the ages of 13-17,
and 3.5 million young adults between the ages of 18-25, experience
homelessness in a year. \1\ This represents one in thirty youth between
the ages of 13-17, and one in ten young adults between the ages of 18-
25. Twenty-nine percent of young adults who experienced homelessness
were enrolled in college or another educational program when they were
homeless.
---------------------------------------------------------------------------
\1\ Morton, M.H., Dworsky, A., & Samuels, G.M. (2017). Missed
Opportunities: Youth Homelessness in America. National Estimates.
Chicago, IL: Chapin Hall at the University of Chicago. Retrieved from:
http://voicesofyouthcount.org/brief/national-estimates-of-youth-
homelessness/
---------------------------------------------------------------------------
I was one of them.
My name is Elaine Genise Williams. I am a 24-year-old Richmond
Native. I currently work as a Shelter Diversion Specialist at The YWCA
of Richmond. I graduated from Virginia Commonwealth University with my
Bachelor's degree in Social Work in May 2017. I also am a co-founder of
Change the World RVA, a non-profit organization that serves youth
experiencing homelessness in the Richmond, Virginia area.
My first experiences of homelessness were in my adolescent years
during middle school. My mother was not able to take care of me, due to
struggles with addiction and mental health problems. Although she is
doing much better now, my mother lost custody of me at one point. I was
raised by my great-grandmother, until social services said she was too
old. I then moved back and forth between various relatives' homes. Some
of these homes were not good or healthy environments. Then, in my
senior year, 2 months before graduation, I received a text message from
the relative I was then living with stating that since I was eighteen,
I had to move out. My relative was frustrated because even though I was
working as many hours as I could at KFC, and I was trying to finish
high school, I had little to bring to the table. Less than 2 days
later, I was put out. I had nowhere to go. Luckily, my best friend's
mother said I could stay with her, so I could graduate from high
school. All in all, I moved six times in middle and high school,
without a stable place to stay.
In spite of all of these struggles, I knew I had to continue to
pursue my dreams of college. I grew up in poverty, and I didn't see
anyone around me going to college. I wanted something different for
myself. The thought of going to college gave me hope in my future, a
way that I could reach my fullest potential, and the opportunity to be
able to do something to make lasting change in my community. I also
participated in the TRIO Upward Bound program, which allowed me to
visit college campuses and be exposed to university life. I decided to
take a risk, do something different, and go to college.
But as I began to apply for college, another problem arose. I tried
to fill out the FAFSA with the help of the GRASP program (a college
access organization that sends counselors to high schools in Richmond).
The GRASP counselor kept asking me to bring my mother's financial
information. I broke down and told her that my mother was not in the
picture. She contacted my high school's McKinney-Vento social worker
(the person in charge of helping homeless students under the McKinney-
Vento Act). The McKinney-Vento social worker told me that I was going
to go to college, despite my situation. She brought me the
unaccompanied homeless youth information that allowed me to be able to
fill out the FAFSA without my mom. Soon after, I was accepted into
Virginia Union University.
Unfortunately, things did not go smoothly at Virginia Union. I
needed to live on campus in order to be able to go to school, which
added to the cost. I had to work, which meant that I was unable to
fulfill the volunteer hours that were required to receive one of my
scholarships, and so I lost that scholarship. I asked the financial aid
office for help, and they told me I should take a year off to work.
As a first-generation college student, I didn't know how to
navigate these issues. I was dealing with a lot of emotional trauma,
and I fell into a deep depression. I stayed with my friend's parents,
but then they got evicted and lost their home, too, and I was homeless
again.
I worked full-time for a year, until I was ready to try college
again, this time at Virginia Commonwealth University (VCU). Although I
had many great experiences at VCU, the FAFSA process presented
obstacles.
Completing the FAFSA at VCU for my first year there was
challenging. They required two different letters for my verification of
unaccompanied homeless youth status, as well as other kinds of
documentation. It took 4 months for everything to clear, which caused
me to lose out on grants that were awarded on a first-come, first-serve
basis. I had to take out more loans.
The following year, my FAFSA experience was even worse. The
financial aid office told me that because I was no longer in high
school, they could not accept a letter from my McKinney-Vento school
social worker. They told me I needed a letter from certain kinds of
homeless shelters. But there are no homeless shelters in Richmond for
youth. When I tried to access an adult shelter, they told me to go stay
with a family member. That was not possible or healthy for me.
A director from a national organization got involved to advocate on
my behalf. She even called the Ombudsman at VCU. Still, the financial
aid office would not recognize my independent status as an
unaccompanied homeless youth, and they insisted on getting information
from my parents. My mentor, my social worker, and one of my professors
all wrote letters to support me, and eventually the financial aid
office recognized my status.
Every single year, except for my senior year, completing the FAFSA
was a nightmare. I would get to question 53 and 54, and worry. It was
re-traumatizing to have to explain my situation over and over again, to
pour myself out to a stranger, and then have them not believe me. I
cried a lot, and sometimes I thought that maybe college wasn't for me
after all. I already felt out of place, as a first-generation student.
The FAFSA process made me feel even more stigmatized.
The FAFSA determination process also contributed to my student
debt, because I lost out on grants due to the delays caused by the
documentation requirements for unaccompanied homeless youth. Without a
parent in the picture, I could not benefit from certain kinds of loans.
I worked year-round, but today, I am $50K in debt. I understand that my
college education is an investment in my future, but this is a burden I
will carry with me for a long time.
I am not the only homeless youth to face these challenges. In fact,
my experience is all too typical. A 2016 report from the Government
Accountability Office found that FAFSA program rules make it harder for
homeless and foster youth to access Federal supports; that extensive
requests for documentation can prevent homeless youth from accessing
Federal student aid; and that the requirement for annual re-
verification of homelessness poses unnecessary barriers for
unaccompanied homeless youth. \2\ A 2017 report from SchoolHouse
Connection showed that many of the FAFSA applicants who indicated that
they were homeless on the initial filtering question could not complete
the necessary documentation process. \3\
---------------------------------------------------------------------------
\2\ U.S. Government Accountability Office. (2016). Report to the
Ranking Member, Senate Committee on Health, Education, Labor, and
Pensions: Higher Education Actions Needed to Improve Access to Federal
Financial Assistance for Homeless and Foster Youth. Retrieved from
http://www.gao.gov/assets/680/677325.pdf
\3\ SchoolHouse Connection. (2017). ``This is How I'm Going to
Make a Life for Myself:'' An Analysis of FAFSA Data and Barriers to
Financial Aid for Unaccompanied Homeless Youth. Retrieved from https://
www.schoolhouseconnection.org/wp-content/uploads/2017/03/Formatted-
FAFSA-Report-March.pdf
---------------------------------------------------------------------------
While the FAFSA was my No. 1 hurdle in completing my education, I
had other challenges, especially housing and mental health services. I
did not know where I was going to stay during breaks. My mentor
introduced me to a couple from her church who eventually took me in,
and with whom I live today. They are now my parents, and have helped me
find stability in housing and my life.
I was not able to tap into mental health services due to the lack
of knowledge of those resources on campus. I felt alone, like no one
understood. I sank into a terrible depression. I am fortunate that I
have people who supported me in my education, but I could have used
more support on campus.
In spite of the many obstacles, I made it to the finish line.
Today, I am very proud of what I have accomplished. I am a role model
for my four young siblings, who look up to me. Because I graduated from
college, they see that it is possible to live a different life. Also,
through the non-profit organization that I started, I am able to help
other high school and college students who are experiencing
homelessness. They tell me that I give them hope, because I've made it.
They tell me that even though they are experiencing housing crisis,
they know they can come see me and their peers who has similar
experiencing every Monday, and they know that myself and other care and
believe in them. It inspires me to continue to be successful, and to be
the leader in my community, especially among young people.
I plan to continue my advocacy to end youth homelessness, and that
means advocating for policy change.
My top three recommendations for Congress to make the FAFSA simpler
and easier for homeless and foster youth are:
1. Eliminate the requirement for unaccompanied homeless youth to
have their status re-determined every year. This requirement creates
more paperwork burdens for students. It adds to our trauma. Unless a
youth reports a change in their circumstances, or the financial aid
administrator has specific information that shows that the student's
situation has changed, the status as an unaccompanied homeless youth
should continue through college.
2. Reduce the documentation requirements for determining that a
youth is homeless and unaccompanied. If a youth has documentation from
any authorized source, the financial aid office should accept it. If a
youth does not have documentation, the financial aid administrator
should be required to make the determination based on the actual legal
definition of homeless.
3. Require colleges and universities to designate a staff person
to help homeless youth and foster youth. Just like the McKinney-Vento
liaison for K-12, we need a person who can connect us to resources both
on and off campus. We need a Single Point of Contact to help us
navigate financial aid, student services, housing during the school
year and during breaks, and other supports.
In closing, thank you for this opportunity to share my experiences.
I hope that my testimony will help inform decisions about the FAFSA for
millions of youth like me.
______
[Summary Statement of Elaine Williams]
Many unaccompanied youth experience homelessness. Many of these youth
also face barriers to accessing financial aid because of the FAFSA.
A 2017 report from Chapin Hall at the University of
Chicago found that at least 700,000 youth between the ages of 13-17,
and 3.5 million young adults between the ages of 18-25, experience
homelessness in a year. This represents one in thirty youth between the
ages of 13-17, and one in ten young adults between the ages of 18-25.
A 2016 report from the Government Accountability Office
found that FAFSA rules make it harder for homeless and foster youth to
access Federal supports. A 2017 SchoolHouse Connection analysis found
that many of the FAFSA applicants who indicated that they were homeless
on the initial filtering question could not complete the necessary
documentation process.
I personally experienced these challenges.
My experience of homelessness began in middle school as a
result of family and economic problems. It got much worse in high
school.
I wanted to go to college to lead a different life from
those around me, and to be able to make lasting change in my community.
Every single year of college, except for my senior year,
I, like many unaccompanied homeless youth, experienced extreme
challenges in completing the FAFSA. I was asked for documentation that
I could not produce, or that took great efforts for me to obtain.
These FAFSA challenges almost kept me from completing
school, added to my mental health struggles, and increased my student
debt because they led to delays that deprived me of opportunities to
apply for various grants.
Despite these problems, I did graduate in May 2017 with a
Bachelor's Degree in Social Work from Virginia Commonwealth University.
I wish to end youth homelessness and I have started my own non-profit
organization to help homeless students.
I have three recommendations for how Congress should fix these
problems.
1. Eliminate the requirement for unaccompanied homeless youth to
have their status re-determined every year. This requirement creates
more paperwork burdens for students. It adds to our trauma.
2. Reduce the documentation requirements for determining that a
youth is homeless and unaccompanied. If a youth has documentation from
any authorized source, the financial aid office should accept it. If a
youth does not have documentation, the financial aid administrator
should be required to make the determination based on the actual legal
definition of homeless.
3. Require colleges and universities to designate a staff person
to help homeless youth and foster youth. Just like the McKinney-Vento
liaison for K-12, we need a person who can connect us to resources both
on and off campus. We need a Single Point of Contact to help us
navigate financial aid, student services, housing both during the
school year and during breaks, and other supports.
______
The Chairman. Thank you, Ms. Williams. That's an impressive
testimony and an impressive effort that you've made. We thank
you for coming.
Dr. Scott-Clayton, welcome back.
STATEMENT OF DR. JUDITH SCOTT-CLAYTON
Dr. Scott-Clayton. Thank you, Chairman Alexander, Ranking
Member Murray, and Members of the Committee. It's a real honor
to be here again to testify today, especially with this
esteemed panel of witnesses.
My role, I think, is to briefly share a few key research
findings relating to this topic, which have informed my own
policy recommendations. First, access to college matters more
now than ever. Those with a college education not only have
more stable employment and higher earnings, but they're also
more likely to vote, and they pay enough in additional taxes to
more than repay the public investments that we make in them via
financial aid.
Please note that when I'm talking about college, I'm not
just talking about the traditional 4-year baccalaureate degree,
but also about the full range of postsecondary education that
Federal student aid supports, including associates' degrees and
certificates in high-return fields.
Second, decades of rigorous research across a range of
contexts shows us that financial aid works. Not only does aid
increase enrollment and completion, but new evidence shows that
it can also help students graduate faster and can lead to
higher earnings and higher rates of home ownership after
college as well. Yet, despite rising returns to college and
despite substantial amounts of Federal financial aid, the gap
in college attainment between high and low-income families is
actually bigger now than it was a generation ago. Federal
student aid needs to do more to narrow this gap.
This brings me to my third key finding. The details of
program design really matter. Unfortunately, the Federal
student aid programs hide their substantial benefits under a
thicket of bureaucracy, as we just heard, and this is embodied
in the Free Application for Federal Student Aid, or the FAFSA.
For many families, filling out a FAFSA is more complicated
than doing their annual income taxes. When I coded up the FAFSA
for my own research, it took hundreds of lines of code to
describe.
But by this point, everyone knows that the FAFSA is
annoying, but we wouldn't be here today if it were just about
an annoyance. Research shows, and we've just heard, that this
form itself has become a significant barrier to college access.
Its complexity and lack of transparency make it very hard for
students to figure out what they're eligible for well in
advance of their college decision, and it generates unnecessary
hurdles just as students are juggling many other new
responsibilities and navigating their path to college.
We don't have to speculate about whether the FAFSA is
really a barrier. Several high-quality, randomized experiments
have shown that when students or prospective students receive
assistance filling out and submitting the form, enrollment and
retention rates increase. One study found that providing
application assistance increased college enrollment rates by 8
percentage points. We could do even better by simplifying the
process at its source.
My fourth key finding from research is that all this
complexity is not even necessary to accurately predict what
students will qualify for. Analysts, including myself, have
conducted simulations in which real FAFSA applications are run
through the need calculation but with various financial
elements disregarded. These simulations show that both Pell
eligibility and the expected family contribution, or the EFC,
can be replicated with a high degree of accuracy using only a
handful of key items.
Asset information is perhaps the biggest surprise. Although
these questions are among the most complicated for individuals
to report, for the vast majority of applicants, they don't play
any role at all in the Pell calculation or even in the broader
calculation of EFC. So the benefits of complexity are small,
while the costs are very large.
So my fifth and final conclusion is that simplification is
imminently feasible. We can do this. Progress has already been
made in recent years in eliminating questions from the form,
automatically importing information from the IRS, and enabling
students to apply earlier. But overall, the process remains a
major source of hassle and confusion, including the
verification process that we've just heard about. We can do
much better, and the remaining hurdles are completely
surmountable.
Various groups have offered alternative plans for
simplification, including myself. There is more than one path
to meaningful and effective simplification as long as it
achieves two key goals: first, minimizing application hassle,
and, second, maximizing transparency.
This leads me to the following general recommendations.
First, we should base Pell awards on a limited number of data
elements that are available from the IRS so that no separate
financial application is necessary. Second, provide states and
institutions with an EFC or simulated EFC that they can use to
continue to distribute their own aid. Third, consider fixing
Federal aid eligibility for several years, allowing students to
plan for a multiyear course of study without needing to reapply
multiple times.
Fourth, summarize Pell eligibility by family income on a
post card that schools, counselors, and community organizations
can post and distribute, even if some fine print is still
required. Finally, use IRS information to proactively
communicate to prospective students and their families about
their likely Pell eligibility.
My written testimony has additional details, and I look
forward to your questions.
Thank you.
[The prepared statement of Dr. Scott-Clayton follows:]
Prepared Statement of Judith Scott-Clayton
Chairman Alexander, Ranking Member Murray, and Members of the
Committee:
My name is Judith Scott-Clayton. I am an Associate Professor of
Economics and Education at Teachers College, Columbia University, as
well as a Research Associate of the National Bureau of Economic
Research and a Senior Research Associate at the Community College
Research Center. Over the past decade, I have conducted my own research
on the impacts of financial aid policy, reviewed the evidence from
others doing work in the field, and participated in policy working
groups examining financial aid and other college access interventions
at both the state and Federal level. Thank you for your Committee's
longstanding, bipartisan interest in this important topic and for the
opportunity to testify.
In the following testimony, I first summarize the evidence that
access to college matters more now than ever. I then focus on three
questions: What does the latest evidence tell us regarding the impact
of financial aid and financial aid simplification? Which aspects of
simplification are the most important? How can we allay some of the
most common concerns regarding FAFSA simplification? Which aspects of
simplification are the most important? How can we ally some of the most
common concerns regarding FASFA simplification? I conclude with
recommendations for reform.
1. Access to College Matters Now More Than Ever
Over half a century ago, upon signing the Higher Education Act of
1965, President Lyndon Johnson stated his intent that the Act ensure
that ``the path of knowledge is open to all that have the determination
to walk it.'' Since then, college enrollment rates have increased
substantially for qualified students across the income spectrum. Yet
significant inequities remain, and while the levels of college
enrollment are higher across the board, the gaps in enrollment between
high and low income families are actually greater for recent cohorts
than for those born in the early 1960's (Bailey & Dynarski, 2011).
Socioeconomic gaps in degree completion are even higher than for
college entry, and these gaps cannot be fully explained by differences
in preparation.
These gaps are troubling because the return to postsecondary
education is near historically high levels. Full-time workers with a
bachelor's degree currently earn $24,600 more annually than workers
with only a high school diploma. While bachelor's degrees offer the
most substantial payoff, associate's degrees also confer earnings gains
of around $10,000 annually relative to workers with only a high school
credential. Those with a college education also have substantially
higher employment rates, receive better employment benefits, are less
likely to smoke, more likely to vote, and pay more in taxes (Ma,
Pender, & Welch, 2016).
More students should be taking advantage of these high returns to
college, but costs remain a significant barrier. As college tuition has
risen over time, while family incomes at the bottom of the income
distribution have declined (in real terms), college costs represent an
increasing fraction of family resources (Baum & Ma, 2014). Our ability
to ensure that ``the path of knowledge remains open to all that have
the determination to walk it'' thus rests heavily on ensuring access to
financial aid--particularly the Federal Pell Grant, which is the
Nation's single largest grant program, used at over 7,000 eligible
institutions nationwide, and providing up to $5,815 per student per
year for up to 6 years of undergraduate study.
2. Evidence on the Benefits of Financial Aid and Financial Aid
Simplification
Thirty years of research convincingly demonstrates that financial
aid can influence college enrollment, persistence, and completion. As
early as 1983, a review of available research indicated that a $1,000
decrease in net price was generally associated with a 3 to 5 percentage
point increase in college attendance (Hansen, 1983). Subsequent
research using more rigorous experimental and quasi-experimental
methods, which can separate out the true causal impact of financial aid
from pre-existing differences between recipients and non-recipients,
finds positive effects of a similar magnitude, across a range of
contexts (see Page & Scott-Clayton, 2016, for a comprehensive review).
Evidence regarding the positive impacts of financial aid has only
grown in recent years. The latest research indicates that financial aid
influences not just college enrollment and completion, but also
important post-college outcomes like earnings and homeownership
(Bettinger, Gurantz, Kawano, & Sacerdote, 2016; Scott-Clayton & Zafar,
2016; Denning, Marx, & Turner, 2017). The benefits of financial aid are
shared by taxpayers as well: Denning, Marx, & Turner (2017) estimate
that the costs of grant aid are fully recovered in the form of higher
Federal tax payments within 10 years of college entry.
While financial aid clearly can influence college enrollment, this
does not imply that all aid programs are equally effective. Many of the
studies that have found positive impacts of financial aid examined
programs with simple, easy-to-understand eligibility rules and
application procedures. In contrast, accessing Federal financial aid
requires students to submit a Free Application for Federal Student Aid
(FAFSA), the complexity of which has been well-documented (Dynarski &
Scott-Clayton 2006; Dynarski, Scott-Clayton & Wiederspan, 2013; Bill &
Melinda Gates Foundation, 2015). With over 100 questions about income,
assets and expenses, the FAFSA approaches the IRS Form1040 in length,
and is longer and more complicated than the 1040A and 1040EZ, the tax
forms filed by a majority of taxpayers.
The FAFSA isn't just an annoyance. Its complexity and lack of
transparency undermine the effectiveness of financial aid, making it
harder to reach students who need aid most. Many students never receive
the Federal aid for which they would qualify: of the 30 percent of
undergraduates who fail to file a FAFSA, one-third would have qualified
for a Pell Grant. \1\ Some of those who do successfully file may submit
the form too late to qualify for state and institutional aid they
otherwise could have received (King, 2004). Even those who submit in 1
year may fail to reapply the next year, increasing the risk of dropout
(Bird & Castleman, 2014).
---------------------------------------------------------------------------
\1\ 1 Author's calculations based on data from the 2011-2012
National Postsecondary Student Aid Study (NPSAS).
Of even greater concern are those who never show up in college
because they never knew they would qualify for aid. Misperceptions
about college costs and financial aid are widespread and are most
prevalent among students from the lowest-income backgrounds (ACSFA,
2005; Grodsky & Jones, 2007; Horn, Chen, & Chapman 2003; Hoxby & Avery,
2013; Hoxby & Turner, 2013; Radford, 2013).For lower-income and first-
generation students who are particularly uncertain about their ability
to afford college, when the time comes to file a FAFSA it may already
be too late. College preparation needs to start well before the end of
high school. But if students assume college is out of reach, they may
never seek out the information that would challenge that assumption,
and may not take the steps they need to take academically to be
---------------------------------------------------------------------------
prepared.
We don't have to speculate about the importance of simplification:
two influential experiments show that reducing application hurdles is a
highly cost-effective strategy for reducing inequality in college
access. In one, researchers randomly selected a subset of low-income
families who visited tax-preparation centers and were offered personal
assistance with completing and submitting the FAFSA. The intervention
increased immediate college entry rates by 8 percentage points (24
percent) for high school seniors and 1.5 percentage points (16 percent)
for older participants with no prior college experience (Bettinger,
Long, Oreopoulos, & Sanbonmatsu, 2012). After 3 years, participants in
the full treatment group had accumulated significantly more time in
college than the control group.
In a second experiment, researchers randomly selected high-
achieving, low-income students from a College Board data base and
mailed them packets of information on net costs and application
procedures at different types of institutions, along with vouchers for
automatic application fee waivers (Hoxby & Turner, 2013). The
intervention significantly increased enrollment rates at highly
selective colleges and universities.
Since I first testified to this Committee in 2013, the evidence has
only grown regarding the consequences of aid complexity and the
potential value of simplification. For example, a national ``nudge''
campaign that sent students text messages and e-mails prompting them to
plan when and how to complete the FAFSA increased college enrollment by
1.1 percentage points overall, and by 1.7 percentage points for first-
generation college students--at a cost of just $0.50 per student (Bird,
Castleman, Goodman, & Lamberton, 2017). Several additional studies also
document even larger positive effects (up to 8-14 percentage point
increases in enrollment or persistence) of providing students
additional support navigating aid paperwork, and reminding them about
deadlines for financial aid application and renewal (Castleman, Page, &
Schooley, 2014; Castleman & Page, 2014).
3. Why Simplification Is Feasible and Which Aspects Are Most Important
The research discussed above demonstrates the benefits of providing
students with extra support to navigate a complicated system.
Simplifying the FAFSA at its source might prove even more effective.
But an oft-expressed concern is that simplification would reduce the
ability for policymakers to accurately target aid.
A separate body of research definitively shows that this is not the
case: most of the financial information collected on the FAFSA
contributes very little to aid eligibility determination. Pell
eligibility and even the Expected Family Contribution (EFC) itself can
be approximated with a high level of precision using just a handful of
elements from the form, primarily relying upon adjusted gross income
and family size (Dynarski & Scott-Clayton, 2006, 2007; Dynarski, Scott-
Clayton, & Wiederspan, 2013; Reuben, Gault, & Baum, 2015). \2\ Thus,
while the benefits of simplification are substantial, the tradeoff in
terms of less accurate targeting is surprisingly minimal.
---------------------------------------------------------------------------
\2\ For example, when Dynarski and Scott-Clayton (2006) estimated
Pell awards and EFCs for dependent students using only parental
adjusted gross income, marital status, family size, and number in
college, the correlation between estimated and actual Pell awards was
0.88 and the correlation between estimated and actual EFC was even
higher at 0.91
This holds true even when considering state aid programs, which
often piggyback their own eligibility determination on the Federal EFC.
One study used detailed financial aid application data to examine the
consequences of formula simplification for state aid programs in five
states, and found that no more than 2 percent of applicants would
become newly eligible for state aid as a result, and that overall
increases in grant amounts would be minimal (Baum, Little, Ma, &
---------------------------------------------------------------------------
Sturtevant, 2012).
To be effective, a simplification strategy needs to address two
related but distinct problems. First is the burden of completing the
application itself, which imposes compliance costs, stress, and may
deter even some applicants who intend to apply. Second is the overall
lack of transparency which makes aid eligibility difficult to predict
and communicate (ACSFA, 2005; Dynarski & Scott-Clayton, 2007). Thus, in
evaluating ``how much simplification is enough,'' the critical criteria
should be: will the reform both substantially reduce application hassle
and substantially improve transparency?
Efforts to simplify the FAFSA have a long history. In 1986,
Congress introduced a ``simplified needs test'' so that some families
could omit asset information from the form, and in 1992 Congress
introduced the ``automatic-zero EFC'' for families with incomes below a
cutoff amount. More recently, some questions on the form have been
eliminated, and the ``skip-logic'' has been improved in the online
application so that students don't have to answer questions that aren't
relevant to their circumstance. Two particularly helpful changes are
that students can now automatically import tax information from the IRS
via the IRS Data Retrieval Tool (DRT), and because the formula now uses
prior-prior year tax information, students can apply several months
earlier than they could before.
All of these changes are heading in the right direction. But many
of the most complicated questions remain (such as questions about
untaxed income and the value of investments), and because students are
advised to assemble their documents and even to fill out a paper
``worksheet'' prior to beginning the online form, it is not clear
whether these reforms have meaningfully reduced the time and hassle
required. \3\ Moreover, while applicants can now file a FAFSA earlier,
the eligibility formula remains opaque, so it remains difficult for
students and families to discern their likely eligibility well in
advance of application.
---------------------------------------------------------------------------
\3\ See, for example, this blog post from the U.S. Department of
Education, "7Things You Need Before You Fill Out the 2018-19FAFSAr
Form," which doesn't mention the auto-zero or simplified needs test. It
does mention the IRS-DRT, but notes that since not everyone will be
able to use it, applicants should still have their tax forms available
for reference (https://blog.ed.gov/2017/09/7-things-need-fill-2018-19-
fafsa-form/).
Since the main determinants of Title IV aid eligibility are already
collected via the IRS Form 1040, some (including myself) have proposed
eliminating the FAFSA completely and instead determining eligibility
automatically, using income and other data from tax forms. Various
teams have articulated how a simplified formula could work (including
the bipartisan Financial Aid Simplicity and Transparency [FAST] Act
introduced by Senators Alexander and Bennet in 2014; as well as
proposals by The Institute for College Access and Success, 2007;
Dynarski & Scott-Clayton, 2007; Baum & Scott-Clayton, 2013; Bill &
---------------------------------------------------------------------------
Melinda Gates Foundation, 2015; Rueben, Gault, & Baum, 2015).
Making application automatic--via a check-off box on an income tax
form--would substantially reduce application hassle. Dynarski and
Scott-Clayton (2007) note that if it takes about 10 hours for a typical
applicant (including student, parent, and administrative support time)
to learn what information is required for the FAFSA, gather the
necessary documents, fill out and submit the form, and then follow-up
on any additional requests for documentation, then the total time spent
to submit 7-10 million applications per year represents the equivalent
of nearly 50,000 full-time workers. Beyond the time saved, reducing the
``hassle factor'' of application will reduce the likelihood that
applicants will walk away before they finish the process, or even
before they start (Dynarski & Scott-Clayton, 2006). The precious time
and expertise of guidance counselors and college advisors nationwide
could be reallocated to helping students navigate other key aspects of
the college transition, like choosing the right school and major.
Simplifying the Pell eligibility formula to the point it could be
expressed on a postcard would also substantially improve transparency.
Under the current system, describing how the EFC is calculated, and how
Pell Grant awards are calculated from that, is difficult to explain in
simple terms. \4\ While many calculators and estimators are available
online, the students most in need of assistance may not even know these
exist, let alone go looking for them in the 9th grade. The opacity of
Pell eligibility may be one reason why the program lacks the name
recognition of the simpler, highly advertised aid programs now in place
in many states, like the Georgia HOPE scholarship or the Tennessee
Promise. To promote early awareness of Pell eligibility will require
clear communication tools and proactive outreach, both of which would
be much easier with a more transparent formula.
---------------------------------------------------------------------------
\4\ The document that outlines the EFC formula is currently 36
pages long, and the Federal Student Aid Application and Verification
Guide that explains the FAFSA process for financial aid professionals
is 116 pages long.
There is more than one path to achieving the goals of
simplification while still accurately targeting aid to the students who
need it most. While different analysts may have different favorite
plans, the commonalities between these proposals outweigh their
differences. As long as simplification meets two key standards--
minimizing application hassle and maximizing transparency--we need not
get bogged down on whether the formula is based upon two factors, or
three, or five.
4. Responding to Common Concerns
In the debate around various simplification proposals, two concerns
are commonly raised that I believe are fully surmountable.
One common concern is that if the formula doesn't include asset
information, then wealthy families with low incomes will claim aid that
they don't really need. But surprisingly, although the FAFSA questions
about net worth are arguably among the most challenging to answer, the
answer is basically ignored for the vast majority of applicants. Why?
Retirement accounts and home equity are excluded, and this is where
most families hold their assets. Other assets are considered only if
they fall above a threshold that rises with the age of the oldest
parent (the current threshold is $24,100 if the older parent is age
55--well above the median assets of families with children, after
excluding home equity and retirement accounts). \5\ Dynarski and Scott-
Clayton (2006) found that assets had no effect on Pell eligibility for
99 percent of dependent applicants and no effect on EFC for 85 percent
of dependent applicants. Asset information likely matters even less for
independent students.
---------------------------------------------------------------------------
\5\ The median net worth of households with children age 18 or
younger, excluding home equity but including retirement accounts, is
$14,993 (U.S. Census Bureau, Survey of Income and Program
Participation, 2014 Panel, Wave 1). On average, retirement savings
represent about 40 percent of remaining assets, suggesting the median
net worth excluding both home equity and retirement savings could be
well under$10,000. Unfortunately the Census Bureau does not directly
compute median net worth excluding both home equity and retirement
savings.
The number of households with incomes low enough to qualify for
Pell, but assets high enough to disqualify them, is thus exceedingly
small. The benefit of preventing these few ``mistakes'' is not
sufficient to outweigh the cost levied on all other applicants in the
---------------------------------------------------------------------------
form of unnecessary stress and complication.
A second common concern is that while simplified formula might work
fine for Federal student aid, states and institutions may need more
detailed information for their own programs. A recent survey by the
Pingel (2017) finds that 32 states plus Washington, DC. use ``at least
three of five major FAFSA data elements to administer state aid
program,'' and raises concerns about the spillover effects of Federal
simplification. The five elements considered in the report include 1)
demographic information, 2) EFC, 3) ``other income or asset
information,'' 4) date the application was filed, and 5) institutions
listed by the student.
By far the most common financial element used for state aid
eligibility is the EFC--which is explicitly preserved under some
simplification proposals, and could be easily estimated under others.
As discussed above, EFCs can be closely approximated using only a
fraction of the information currently collected on the FAFSA. Baum,
Little, Ma, and Sturtevant (2012) show that these minor changes in EFC
have only small effects on the distribution of state aid. While the
specific effects may vary from state to state, data on current
applicants could be used to predict state-specific effects so that
states have time to make any necessary adjustments.
Adjusted gross income is another element that could easily be
preserved and passed to states under even the most radical proposals
for simplification. Finally, if aid eligibility were determined
automatically via the tax system, information on demographics,
institutions, and application date could easily be collected via a
supplementary non-financial form. Once students know what they qualify
for, they may be much more likely to fill out a simple form that
doesn't require complex information on income and assets.
Institutional aid presents a somewhat different challenge. Changes
in EFC that have little implication for Federal or state need-based aid
may matter more for institutional aid that often extends to much
higher-income households. However, schools with substantial
institutional aid typically already use an additional financial aid
form, the CSS Profile, and would continue to do so even if the FAFSA
were dramatically simplified. The Federal aid process need not burden
all applicants with questions required for only a fraction of
institutions.
5. Concluding Recommendations
As noted above, I don't believe there is one single path to
meaningful FAFSA simplification (and indeed, over the past decade I
have proposed more than one alternative). But my general
recommendations for FAFSA simplification are to:
Base Pell awards on a limited number of data elements
that are available from the IRS so that eligibility is transparent and
no separate financial application is needed. Continue to provide states
and institutions with an EFC, or simulated EFC, as well as basic
demographic and institutional information, to use in distributing other
financial aid. Fix eligibility for several years, allowing students to
securely plan for a multi-year course of study without the need to
reapply. Summarize Pell eligibility by family income on a postcard--
even if some fine print is required--that schools, counselors, and
community organizations can post and distribute. Use IRS information to
proactively communicate to prospective students and their families
about their likely Pell eligibility.
The first recommendation dramatically reduces application
hassle. The second recommendation ensures continuity for states, while
the latter three recommendations improve transparency.
As the U.S. falls behind other countries on measures of
educational attainment and social mobility and leaps ahead on measures
of inequality, now is the time to reinvest in education, and to ensure
that every dollar spent has the maximum impact. Research suggests that
FAFSA simplification has the potential to substantially improve the
effectiveness of Federal investments in postsecondary education.
Figuring out the FAFSA is a major hurdle in the process
of applying for college, but it is hardly the only one. If Federal
policymakers can simplify the cost calculus for students and their
families, it could free up armies of high school counselors, aid
administrators, college advisors, and volunteers nationwide that are
currently devoted to helping students fill out FAFSAs. Instead, these
``boots on the ground'' could redirect their valuable time and
expertise to helping students identify a high-quality college option
that not only fits their budget, but furthers their educational
aspirations. Students themselves could worry a little less about money,
and a little more about what they need to do academically to prepare
for and succeed in college.
______
[Summary Statement of Judith Scott-Clayton]
Overview of Testimony
1. Why Access to College Matters Now More Than Ever
Gaps in enrollment rates for high- and low-income
students are widening.
The returns to college degrees are near historically high
levels.
More students should take advantage of these high
returns, but costs remain a barrier.
2. Evidence on the Benefits of Financial Aid and Financial Aid
Simplification
Financial aid can improve college enrollment, completion,
and post-college outcomes, and evidence is strongest for programs with
simple applications and eligibility rules.
The FAFSA required to access federal student aid is, for
most families, longer and more burdensome than filing an income tax
form.
The complexity of the FAFSA and lack of transparency in
the EFC and Pell award calculations undermine the effectiveness of
financial aid.
Several recent, rigorous studies demonstrate that the
FAFSA is a real barrier, and show that making the process easier for
students can significantly increase college access.
3. Why Simplification Is Feasible and Which Aspects are Most
Important
Most of the financial information on the FAFSA is not
necessary to accurately estimate Pell eligibility or EFCs.
Recent efforts to improve the FAFSA process are heading
in the right direction, but have not sufficiently reduced the hassle or
improved the transparency of aid eligibility.
Since IRS tax forms already collect the key items needed
to predict aid and EFCs, a truly simplified system would enable
families to apply automatically simply by checking off a box on their
tax return.
There is more than one path to meaningful simplification,
as long as reforms achieve the twin goals of minimizing application
hassle and maximizing transparency.
4. Responding to Common Concerns
While some worry that eliminating information on assets
would degrade the targeting of aid, assets already play no role in the
aid calculation for the vast majority of applicants.
Some also worry about the effects federal simplification
would have on the administration and targeting of state financial aid,
but the key information most frequently used by states (EFC and
sometimes AGI) could easily be preserved and shared with states even
under the most radical proposals for simplification.
5. Concluding Recommendations
Base Pell awards on a limited number of data elements
that are available from the IRS so that eligibility is transparent and
no separate financial application is needed.
Continue to provide states and institutions with an EFC,
or simulated EFC, as well as basic demographic and institutional
information, to use in distributing other financial aid.
Fix eligibility for several years, allowing students to
securely plan for a multi-year course of study without the need to
reapply.
Summarize Pell eligibility by family income on a
postcard--even if some fine print is required--that schools,
counselors, and community organizations can post and distribute.
Use IRS information to proactively communicate to
prospective students and theirfamilies about their likely Pell
eligibility.
______
Thank you again for the opportunity to provide these
comments to the Committee. I look forward to your questions.
The Chairman. Thank you, Dr. Scott-Clayton.
Mr. Draeger, welcome.
STATEMENT OF JUSTIN DRAEGER
Mr. Draeger. Thank you, Chairman Alexander, Ranking Member
Murray, and Members of the Committee.
In 2014, Senator Alexander, you came and spoke to several
thousand financial aid administrators in Nashville and proposed
a two-question FAFSA, and as my friends in Tennessee have told
me, that created quite a dust-up amongst our membership, not
because they don't want to make the application simpler. But
when you look at the amount of grant aid delivered every year
in this country, $40 billion of it comes from the Federal
Government, which is not an insignificant amount of money; $58
billion of it comes from institutions, and then another $25
billion comes from state and outside scholarship providers.
The context I want to paint here is that there are other
entities that are awarding significant amounts of grant aid
that have an interest in making sure we're doing two things
when we have students complete the FAFSA. One, which I think
we're pretty much all in alignment on, is making it as easy as
possible, and that includes making the verification process as
easy as possible.
But the second piece is making sure that we have accurate
data to assess the financial strength of every family. At its
core, need-based grants come down to few basic principles. The
first principle is this: that the primary responsibility to pay
for college is that of the student and family, and that
students and families that can afford to pay for college
should.
The second principle is that where students and families do
not have the means to pay for college, we should have a web of
grant providers that includes the Federal Government, state,
institutions, and scholarship providers that fill in that need.
No. 3, that because grant dollars are limited, we ask students
to complete some sort of application so we can try to assess
their need.
The unifying concept of the FAFSA is that all these
different grant providers could try and rely on one form so
that we don't have fragments of multiple forms throughout the
process. So the tradeoff we've been talking about for years is,
one, how many questions do we ask--as few as possible to make
this easy--and, two, how accurately do we want to determine the
applicant's financial strength.
I think that the good news is a lot has changed in the last
4 years since this conversation has started. After convening a
group of practicing aid directors from all different types of
schools, and with where we've come technologically, and with
the timing of the FAFSA now, I think we can sort of break out
of this binary tradeoff that we've been grappling with for many
years. Our proposal--and it aligns well with several other
independently created proposals--relies on existing data bases
of information that would prepopulate or autofill for
applicants, providing verified information so that students and
families would no longer have to go through an arduous
verification process with the school.
Our first pathway would be for low-income students who come
from backgrounds where they may not make enough money to even
have to file tax returns. These families probably already
qualify for specific means-tested Federal benefits, like SNAP
or SSI, and in those instances, this is a matter of linking
data bases that already exist so that we can auto-qualify low-
income students for full Pell eligibility.
Our second pathway is for those who have uncomplicated tax
forms. So these are your 1040 without schedules, 1040EZ, or
1040A. They have all the information we need to determine their
Pell eligibility and, in most instances, school and state
eligibility. So if we could prepopulate or import that from the
tax return, we could dramatically reduce the number of
questions they provide, and they don't have significant assets
as demonstrated by their tax return.
The third pathway is for those who have complicated tax
returns and thereby complicated financial situations. We don't
think it's necessarily an issue to have a slightly more
complicated form for families that have very complicated
financials. That would be demonstrated by schedules that
indicate business income, real estate investments, or other
types of investments that a lot of Pell eligible students do
not have. In those instances, still, we could get the majority
of the information directly from the tax return. So we could
make this easier for all if we start moving toward using
verified data up front.
One final point I would make about simplicity and
complexity. Creating an application process that I just
described would introduce some complexity, but not for the
applicants. That's the part that we're focused on. The
complexity in programming and indexing tax returns and
transferring data and linking up data bases--that's all back
end complexity, and I don't know that we ought to eschew
complexity on the back end if it, at the same time, maintains
integrity and accuracy on the front end and, ultimately, makes
it easier for applicants. I've provided a handout in your
materials that shows the pathways that I've just described.
Thank you.
[The prepared statement of Mr. Draeger follows:]
Prepared Statement of Justin S. Draeger
Chairman Alexander, Ranking Member Murray, and Members of the
Committee:
Thank you for inviting me to testify today. My name is Justin
Draeger from the National Association of Student Financial Aid
Administrators (NASFAA). NASFAA represents financial aid administrators
at 2,800 colleges across the country. Collectively, our schools serve
nine out of 10 students enrolled in career schools, 2-and 4-year public
and private schools, and graduate schools.
application simplicity v. accuracy: the tradeoff
To address the complexity of the Free Application for Federal
Student Aid (FAFSA), we must first underscore the basic tenets that
underpin the philosophy behind the Federal student financial aid
programs:
1. Federal student financial aid is predicated on the idea that
the primary responsibility to pay for college is that of the student
and the family.
2. In instances where students and families do not have the means
or ability to pay for college, the Federal Government provides need-
based financial aid.
3. Because need-based financial aid dollars are limited, the
Federal Government asks students to complete an application that helps
to determine the financial strength of each family, and then aid is
awarded accordingly. Students and families of strong financial means
receive little to no need-based aid, and those with less means receive
more.
As Congress explores ways to simplify the FAFSA, it is important to
remember these three tenets, because, taken together, the formula and
form implement these philosophical underpinnings.
Inherent in this implementation is a tension between two key goals:
(1) The desire to make the form as easy as possible to complete, and;
(2) creating a form that allows Federal and state governments, schools,
and sometimes outside scholarship providers to accurately measure the
financial strength of applicants to ensure limited need-based grants
are well targeted. Put more simply, the challenge before us is to put
together an application that is as simple as possible but yet allows us
to distinguish the truly needy from those who are not.
Ultimately, it is this tension that causes most debates within the
application simplification discussion, and historically, trying to
balance these two objectives has meant tradeoffs between simplification
and accuracy. For example, the most accurate measure of the financial
strength of an applicant would be assessed by asking detailed questions
about income, sources of income, assets, savings rate, tax brackets,
annual expenditures, and more. However, such a structure would make the
form complex, tedious, difficult to verify, and most importantly,
extremely daunting for low-income students. First generation students
with no experience with the college application process would be
deterred by such a complex FAFSA, potentially losing the opportunity to
attend college simply due to the form.
On the other hand, we could, as has been proposed, \1\ greatly
simplify the form by asking only two questions to determine the
financial strength of a family: adjusted gross income and household
size. While this would make the form very easy to fill out, it would
likely yield a greater rate of ``false positives,'' that is, the
numbers of students who appear poor by AGI only, yet come from
financially strong families who have resources elsewhere.
---------------------------------------------------------------------------
\1\ S. 108, Financial Aid Simplification and Transparency Act of
2015
---------------------------------------------------------------------------
False positives are not new. Because we use proxies like income to
determine a family's financial strength, we will always have some need-
based dollars going to students who have resources to pay for college
otherwise. For example, at one large, public 4-year research
institution, nearly 10 percent of their students who received Federal
Pell Grants did not qualify for institutional need-based aid because
the school awards its own need-based aid using a more sophisticated
financial need analysis model, suggesting that the school's assessment
of need was more accurate that the Federal Government's. In the course
of doing business, some false positives are fine, but clearly in
environments with limited amounts of money, our goal should be to
minimize the dollars going to students who could otherwise pay for
college. Historically, the more we simplify the Federal form, the more
false positives we create.
Even if we found a very simple, generally strong proxy like AGI as
a determinant for Federal student aid programs, that doesn't mean that
same proxy would work for all other forms of need-based grants. Similar
to the Federal Government, schools, states, and private scholarship
providers all want their funds to go to truly needy students. In fact,
while the Federal Government provides $40 billion \2\ in need-based aid
per year, the largest source of need-based financial aid is
institutional financial aid, not Federal Pell Grants \3\. Preliminary
data for award year 2016-17 show institutions awarding $59 billion in
institutional aid, while Pell Grants totaled $27 billion.
---------------------------------------------------------------------------
\2\ The College Board. Trends in Student Aid, 2017. Table 1.
\3\ Ibid
---------------------------------------------------------------------------
The Higher Education Amendments of 1992 \4\ created the FAFSA in
order to offer a free, centralized financial aid application for
students that, in addition to Federal eligibility, could be used to
help inform aid eligibility for states, institutions, and other private
entities. Prior to the FAFSA, students filled out multiple
applications, often with the same information, making the process
complicated and unnecessarily burdensome. The development of the FAFSA
greatly streamlined the application process for students. While roughly
a dozen or so states still have a supplemental financial aid
application, virtually all students from those states are able to pre-
populate their state application from the FAFSA \5\. In addition, most
institutions (nearly 4,000) use some data from the FAFSA to award their
own aid. \6\ If we go too far in simplifying the Federal application we
could inadvertently complicate this process even further by driving
states, institutions and private scholarship providers to return to
requiring their own separate applications.
---------------------------------------------------------------------------
\4\ Public Law 102-630
\5\ National Association of State Student Grant and Aid Programs.
47th Annual Survey Report on State-Sponsored Student Financial Aid.
\6\ This number was calculated by NASFAA using The College Board's
list of institutions using the CSS Profile and/or IDOC for 2018-19 and
U.S. Department of Education. Institute of Education Sciences, National
Center for Education Statistics. 2015-16 Preliminary Release Data on
institutional grant aid to first-time full-time students
---------------------------------------------------------------------------
today's fafsa
Over the years, the Federal Government has grappled with the
simplification versus accuracy tradeoff, sometimes adding questions to
the FAFSA to try to achieve more specificity about a family's
circumstances, and in other years taking away questions that were so
complex they were deterring some students and families from even
completing the form. For example, in 2006 Congress added active duty
military as one of the criteria for independent student status, \7\ and
a new question was added to the FAFSA as a result. In 2009, the
Department of Education (ED) added dependency status skip-logic that
only asks the minimum number of questions necessary to determine an
applicant's status. \8\ Starting with the 2011-12 award year, ED
eliminated questions about enrollment status and interest in the
teaching profession. \9\
---------------------------------------------------------------------------
\7\ Public Law 109-171
\8\ ``Application Processing Update,'' presentation from ED, 2009
FSA Training Conference for Financial Aid Professionals, December 2009:
https://ifap.ed.gov/presentations/attachments/
GS2ApplicationProcessingSystemUpdateV1.ppt
\9\ ``Summary of Changes for the Application Processing System:
2011-2012,'' U.S. Department of Education Office of Federal Student
Aid, November 2010: https://ifap.ed.gov/sumchngsappsys/attachments/
111810ChangesAppProcessSys1112.pdf
---------------------------------------------------------------------------
There are many examples of small tweaks throughout the years, that
taken together, have reduced the time it takes for a student to fill
out the FAFSA. Today, the average completion time is approximately 31
minutes the 2015-16 application cycle \10\, a vast improvement from the
time it took to fill out the form when it was first developed.
---------------------------------------------------------------------------
\10\ Federal Student Aid, Federal Student Aid FAFSA Volume
Reports: FAFSA Data by Demographic Characteristics, 2015-16 Application
Cycle
---------------------------------------------------------------------------
recommendations for improvement
Even with such improvements, we can still do better. With today's
technology we no longer need to make the tradeoff between
simplification and accuracy, as we've had to do in the past. By relying
on timing and technology, NASFAA believes Congress can dramatically
reduce the number of questions for all applicants, but most of all for
low-income students.
In 2015, NASFAA convened a group of diverse (geographic and sector)
financial aid professionals to examine how to simplify the FAFSA. They
were charged with finding a balance between simplification and
accurately assessing applicant need. Their approach sorts students and
families up-front to direct them down one of three potential
application pathways based on their predicted financial strength. \11\
I highlight the proposal below and offer it to you as a well-developed
concept for FAFSA simplification.
---------------------------------------------------------------------------
\11\ ``FAFSA Simplification,'' NASFAA FAFSA Working Group Report,
July 2015: https://www.nasfaa.org/fafsa-report
---------------------------------------------------------------------------
Broadly, NASFAA supports a three-level application process,
bolstered by a robust Internal Revenue Service (IRS) Data Retrieval
Tool (DRT) made possible by the recent move to the use of prior-prior
year (PPY) income information. \12\ With the DRT, applicants can
automatically import tax data directly into their FAFSA. Since, under
PPY, most applicants will use the DRT, NASFAA recommends the DRT be
expanded to include all line items of the 1040 and W2.
---------------------------------------------------------------------------
\12\ ``The President's Plan for Early Financial Aid: Improving
College Choice and Helping More Americans Pay for College'' The White
House, September 13, 2015: https://obamawhitehouse.archives.gov/the-
press-office/2015/09/14/fact-sheet-president's-plan-early financial-
aid-improving-college-choice
---------------------------------------------------------------------------
The DRT currently includes only the following line items:
Type of tax return filed
Filing status
Adjusted gross income
Taxes paid
Income earned from work
Exemptions
Education credits (1040 and 1040A only)
IRA deductions (1040 and 1040A only)
Tax-exempt interest income (1040 and 1040A only)
Untaxed IRA distributions (1040 and 1040A only)
Untaxed pensions (1040 and 1040A only)
The expansion to include all 1040 line items, for example, would
allow for the inclusion of other forms of income like business and
investment income, and the W2 would allow for information on income
earned from work for non-tax filers--all without requiring the
applicant to manually complete more lines. The DRT expansion would tee
up the opportunity for a simple, three-pathway approach for applicants.
Path #1: After answering the initial questions on identifiers,
demographics, and dependency status, all applicants would be asked if a
parent (for dependent students) or anyone in their household (for
independent students) was a recipient of the Supplemental Nutrition
Assistance Program (SNAP) and/or Supplemental Security Income (SSI)
benefits. If the applicant answered ``yes'', they would go through some
type of automated data base match to verify receipt, and the FAFSA
would be complete with the applicant being eligible for the maximum
Pell Grant. All asset questions would be eliminated under Path #1
across the board, since these applicants are likely to have very few
assets. In short, students and families that have already proven that
they are low-income would not have to continue proving it to other
government agencies.
If the applicants did not qualify for those Federal means-tested
benefits, then the FAFSA would ask if the applicant filed a tax return
or was required to file. For all non-filers, the FASFA would ask about
income earned from work, which could be retrieved via the expanded DRT,
and child support received only. All asset questions would be
eliminated.
The goal of Path #1 is to ensure that our country's neediest
students, especially those who have already proven themselves poor
through their eligibility for SNAP and/or SSI, do not have to yet again
fill out a cumbersome form that yields the same results.
Path #2 Applicants who do not meet the conditions for Path #1, but
have uncomplicated financials as demonstrated by filing a 1040EZ,
1040A, or 1040 without schedules, would be directed to the IRS Data
Retrieval Tool. The infrastructure for this process already exists, we
would only add the small expansion on the items being indexed and
imported, as noted above.
Under Path #2 information retrieved via the DRT would include:
Tax filing status
Adjusted Gross Income
Taxes paid
Income earned from work
IRA deductions and payments to self-employed SEP, SIMPLE,
Keogh and other qualified plans
Tax exempt interest income
Untaxed portions of IRA distributions
Untaxed portions of pensions
Education tax credits
Payments to tax-deferred pension and retirement savings
plans
All of those figures would be automatically imported from the DRT,
requiring no additional effort on behalf of an applicant. Related to
assets, by definition, applicants who file a 1040EZ, 1040A or 1040
without forms or schedules do not have significant assets. Therefore,
under Path #2, the FAFSA would ask only about cash, savings, and
checking accounts of students, not parents in the case of dependent
students.
Path #3 Having not qualified for paths #1 nor #2, applicants who
filed a 1040 with forms and/or schedules would be steered to Path #3.
These families have more complicated and sophisticated financial
situations and would accordingly be asked to complete a more
sophisticated application form. However, even under Path #3, most
questions can be answered through the an expanded IRS DRT or Federal
data sharing. All of the taxable and untaxed income questions are the
same for Path #3 as for Path #2, along with the same expanded use of
the DRT.
However, under Path #3, the following adjustments to income would
be made:
Negative numbers carried over from a schedule to the
front of the 1040 will not be allowed. The AGI reported through the DRT
will be adjusted to account for any negative income and that adjusted
AGI will be used in need analysis. This would address the issue where
applicants with significant assets, yet low AGIs appear more
financially needy than they actually are.
Any dollar amount listed in line 21 of the 1040 with
``Form 2555,'' for foreign income not subject to taxation, would be
counted as untaxed income.
For assets, the cash, savings, and checking question would be asked
of all applicants in Path #3. The other existing asset questions on
investments and business/farms would be presented if a specific line
item on the 1040 is populated, which indicates the potential for
assets. For example, if line 12 on the 1040 is populated, that may
indicate a business that should be reported on the FAFSA, and the
appropriate FAFSA question would then be presented to that applicant.
Finally, the result from these changes would be to produce an index
that ranks applicants according to their financial strength, instead of
creating the current ``expected family contribution,'' a misnomer and
major point of confusion for students and families. This three-pathway
approach, along with the indexed ranking, is a simple, streamlined,
fair, and accurate way to reform the FAFSA.
impact on verification
The application process does not end after a student submits a
FAFSA. Many applicants are then required to verify the information
they've just submitted. One of the major benefits of the DRT expansion
and three pathway system is the positive impact this approach would
have on reducing verification burden for both students and schools.
Verification of FAFSA information can be a confusing and tedious
process for students, particularly for disadvantaged students who are
unfamiliar with the process. In some cases, the verification
requirements can be cumbersome enough to deter some students from
completing the process. Under our proposal, the need for verification
will be greatly reduced because more information will be coming
directly from the IRS. This eliminates hurdles for low-income students,
and frees up more time for financial aid administrators to counsel
students, rather than push paperwork.
conclusion
In order to strengthen the FAFSA for those who need it the most, we
will need to work to balance the tension between simplification and
accuracy, and be willing to accept that there might be some
imperfection in pursuit of balancing these goals.
Creating an application process with these three tiers does create
some complexity, but not for the applicants. The complexity in
programming, indexing tax returns, and transferring that data over to
the Department of Education is all on the back end. We ought not eschew
complexity on the back end if it helps us maintain integrity and
accuracy in the program and prevents more states, schools, and private
scholarship providers from developing their own forms. Thank you for
the opportunity to testify. We look forward to working with you to
continue to ensure higher education access and promote college success.
______
the national association of student financial aid administrators
(nasfaa)
NEXT STEPS ON FAFSA SIMPLIFICATION
As Congress and the higher education community work toward the
reauthorization of the Higher Education Act (HEA), broad themes have
emerged, including the concept of simplification, with a particular
focus on the federal student aid application process. The National
Association of Student Financial Aid Administrators (NASFAA) has long
been interested in ways to make the Free Application for Federal
Student Aid (FAFSA) and the overall application process more efficient
and streamlined for students and families.
Early FAFSA and Prior-Prior Year (PPY)
In September 2015, President Obama and then-Secretary of Education
Duncan announced their intention to use their existing authority in HEA
[Sec. 480(a)(B)(1)] to adjust the year of income tax data used to
determine federal aid eligibility, a move supported by NASFAA and other
higher education advocates. Before, the Federal Methodology (FM)
calculated a student's financial need using prior year income data.
Beginning on October 1, 2016, FM will use income data from the prior-
prior year (``PPY'') and the FAFSA release date will move up from
January 1 to October 1 (``Early FAFSA'').
With Early FAFSA and a switch to PPY, students and families can:
File the FAFSA earlier than they do now. Historically,
the FAFSA has been made available January 1 of each year, yet it is
uncommon for a family or individual to be prepared to file an income
tax return in January. Because the FAFSA will now be made available on
October 1 using income data from two years prior, students can use
already-completed income tax returns.
More easily submit a FAFSA. The IRS Data Retrieval Tool
(DRT), which allows automatic population of a student's FAFSA with tax
return data and decreases the need for additional documentation, can
now be used by millions more students and families under PPY.
Receive notification of financial aid packages earlier.
If students apply for aid earlier, colleges can provide aid
notifications to students earlier, ensuring that students and families
have more time to prepare for college costs. Early notification also
means more time for financial aid offices to counsel students and
families.
NASFAA Work on FAFSA Simplification
NASFAA has been pleased with FAFSA improvements over the past few
years, including ``smarter'' skip-logic and the implementation of the
IRS Data Retrieval Tool (DRT). In July 2013, NASFAA released initial
recommendations for HEA reauthorization with several recommendations
focusing on simplifying the FAFSA. Recent proposals within the context
of reauthorization led NASFAA to revisit simplification with an eye
toward making the application process more targeted and efficient
through the expansion of existing technology.
In July 2015, NASFAA released a FAFSA Simplification report, a
result of NASFAA's FAFSA Working Group, which was composed of
practicing aid administrators. The working group developed a model-
predicated on enacting PPY-that would simplify the aid application
process while still ensuring program integrity and accurate targeting
of federal funds. With PPY now in place, NASFAA's FAFSA simplification
proposal represents a logical next step.
NASFAA Proposal: A Three-Level Application Process
PATH 1
After answering the initial questions on identifiers, demographics,
and dependency status, all applicants would be asked if a parent (for
dependent students) or anyone in their household (for independent
students) was a recipient of Supplemental Nutrition Assistance Program
(SNAP) and/or Supplemental Security Income (SSI) benefits. If the
answer is ``yes,'' the applicant would list the chosen school codes,
sign and date the FAFSA, and the FAFSA would be complete. No further
financial information would be gathered and the applicant would
automatically be eligible for the maximum Pell Grant.
If the answer is ``no,'' then the FAFSA asks if the applicant filed
a tax return or was required to file. For non-filers, the FAFSA would
ask about income earned from work and child support received only. All
asset questions would be eliminated. Tax filers would proceed further
to path #2.
PATH 2
Applicants who do not meet the conditions for path #1 would be
directed to the IRS DRT. If the tax return is a 1040A, 1040EZ, or a
1040 without any line items that resulted from the completion of a form
or schedule, then Path #2 applies.
Information retrieved via the DRT would include:
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
The question on child support received would be retained.
Related to assets, the FAFSA would ask only about cash, savings,
and checking. This question would apply only to dependent students (not
parents of dependent students), and independent students without
dependents.
PATH 3
Having not qualified for paths #1 nor #2, applicants who filed a
1040 with forms and/or schedules will be steered toward Path #3. All of
the taxable and untaxed income questions are the same for Path #3 as
for Path #2, along with the same expanded use of the DRT.
However, under Path #3, the following adjustments to income would
be made:
Negative numbers carried over from a schedule to the
front of the 1040 will not be allowed. The AGI reported through the DRT
will be adjusted to account for any negative income and that adjusted
AGI will be used in need analysis.
Any dollar amount listed in line 21 of the 1040 with
``Form 2555,'' for foreign income not subject to taxation, would be
counted as untaxed income.
For assets, the cash, savings, and checking question would be asked
of all applicants. The other existing asset questions on investments
and business/farms would be presented if a specific line item on the
1040 is populated, which indicates the potential for assets. For
example, if line 12 on the 1040 is populated, that may indicate a
business that should be reported on the FAFSA, and the appropriate
FAFSA question would then be presented to that applicant.
Additional NASFAA FAFSA Simplification Recommendations:
Expand the IRS Data Retrieval Tool (DRT) to include all
line items of the 1040 and W2 information.
Generally speaking, the goals of ``simplicity'' and ``accuracy/
program integrity'' are at odds with each other, i.e., a highly
accurate need analysis system is not simple. However, use of more
information obtained directly from the IRS would allow for a simpler
application and reduced burden for applicants, but retain a high
standard of accuracy. Using PPY income data instead of prior-year data
also presents the opportunity to explore expanding the DRT to include
information from W2 forms, which would permit retrieval of income
earned from work for non-tax filers. Under our current prior-year
system, W2 information from the prior year is not available from the
IRS in a time frame that is useful for financial aid application
purposes.
Consider the use of the tax return as the primary federal
student aid application.
Currently most of the financial data used to complete the FAFSA
comes from the tax return. The IRS data retrieval tool (DRT) provides
direct population of those items, and ED is moving significantly
towards mandatory use through the verification process. However, filing
a FAFSA is still a separate process from filing the tax return and
requires the student and family to initiate the student aid process on
an entirely different website. The aid application process could be
merged with the tax return process by providing a financial aid
application section on or with the 1040 as an option for applying for
federal student aid. This could eliminate the FAFSA application for
students and parents who file tax returns.
The result of the Federal Methodology should be an index
that ranks applicants according to their financial strength, rather
than an ``expected financial contribution.''
Because the Federal Methodology (FM) has been modified over the
years to accommodate political and cost concerns, the term ``Expected
Family Contribution'' is a misnomer that misleads and confuses students
and families. Rather than representing a financial contribution by the
applicant, the result functions more as an index that ranks applicants
according to their financial strength. The name of the index should be
changed to reflect that reality.
Eliminate the provision requiring institutions to monitor
and enforce selective service registration (assign the responsibility
for determination to Selective Service).
NASFAA recommends elimination of the requirement to be registered
with Selective Service from the general student eligibility criteria.
This recommendation has been made repeatedly for a long time. At the
very least, responsibility for determining whether a failure to
register was knowing and willful should be shifted back to Selective
Service and some path be constructed that allows students who knowingly
failed to register, but who are past the age of registration, to gain
eligibility (possibly through community service or federal awards
restricted to the cost of tuition and fees only).
Eliminate the tie between student eligibility and drug
convictions.
A federal or state drug conviction-if reported by the student-can
disqualify a student for federal student aid if it occurred during a
period of enrollment for which the student was receiving federal
student aid. Many if not most schools currently have admissions and
student conduct rules that address drug use. NASFAA believes aid should
not be used to enforce social policies.
______
The Chairman. Thank you, Mr. Draeger.
Dr. Rueben, welcome.
STATEMENT OF DR. KIM RUEBEN
Dr. Rueben. Thank you. Chairman Alexander, Ranking Member
Murray, and Members of the Committee, thank you for inviting me
to discuss simplifying the FAFSA. The views I'm going to
express today are my own and should not be attributed to the
Urban Institute, its trustees or funders.
The FAFSA enables millions of students to apply for
financial aid, as my colleagues have shown. But it also
presents significant barriers for some students, most notably
low-income or first-generation students. It has grown more and
more complex as officials have tried to ensure they provide aid
to those who need it, but only those who need it.
Policymakers have made some progress recently in
simplifying the FAFSA, adding skip logic to eliminate
irrelevant questions, using the IRS data retrieval tool, and
basing awards on prior-prior year income. But there's still
work to be done.
The application process is still cumbersome, and the
complex formula for the expected family contribution makes it
difficult for students to know their eligibility before they
apply for college. Further simplification is a low-cost way of
increasing the effectiveness of the Federal commitment to
broadening educational opportunities, and it is especially
important for low-income students who are least likely to
attend college and who could benefit the most from an improved
student aid application system.
My written testimony includes descriptions and cost
estimates of FAFSA simplification proposals, including those of
my colleague sitting to my right, made over the last few years.
This is based on earlier work where we made apples to apples
comparisons of the cost and distribution of benefits of
different options.
Some proposals, like the FAST Act, would ask families a few
questions to calculate Pell Grant awards, while others, like
NASFAA's, would maintain a single process for calculating both
Pell awards and other aid but would simplify the existing
system through the use of technology and reliance on tax return
information. The details and implementation are important, but
all highlight the possibility of an easier system.
I believe that it is time to decouple the process of
awarding Pell Grants from the rest of the financial aid award
system. However, it would still be important to maintain a
universal Federal application for other types of aid.
So five particularly promising steps would be the
following: First, determine Pell Grant eligibility using just a
few pieces of information, such as family income, family size,
and family relationships.
Two, make Pell Grant eligibility and application available
through an app or a tool that can be accessed using a
smartphone or tablet, not just a computer. I think we're beyond
the post card phase where people are more comfortable using
their phones to figure these things out.
For other aid, maintain a universal application form that
relies on branching systems which eliminate the need for
applicants to view questions that might ask for information
that they just don't understand. Include far fewer questions in
an application process that allows data to be downloaded
directly from tax returns. Finally, this probably means that we
have to change the IRS data retrieval system to make
simplification possible by including an indicator for the
presence of business or capital income that would trigger
additional questions about a student's wealth.
A simplified Pell formula can make aid more predictable and
effective for low-income students, even for those who are not
yet attending college. Many of the objections about losing
nuance with simplification can be met by including information
about family structure and changing aid formulas. Thus, we can
differentiate between a two-person family with two adults or a
parent and child, and then change the size of award
accordingly.
So I would go from a two factor to a three factor system.
I would suggest assigning Pell Grants after students answer
three simple questions: What is your family income? How many
people are in your family? Are you or one of your family
members a dependent child? I also suggest maintaining a Federal
system for accessing other aid so we don't return to a system
where students need to fill out a myriad of forms at each state
level to access other aid during the application process.
I am excited to see the Committee continue this important
work that I hope will lead to more students, including and
especially first-generation or low-income students, attending
college.
Thank you for the opportunity to testify, and I look
forward to answering any questions you may have.
[The prepared statement of Dr. Rueben follows:]
Prepared Statement of Kim Rueben
Chairman Alexander, Ranking Member Murray, and Members of the
Senate Committee on Health, Education, Labor and Pensions, thank you
for inviting me here today to discuss simplifying how students access
higher education using the Free Application for Federal Student Aid.
The views I am going to express today are my own and should not be
attributed to the Tax Policy Center, the Urban Institute, the Brookings
Institution, their boards, or their funders.
The Free Application for Federal Student Aid (FAFSA) has grown more
and more complex as officials have sought to ensure that they are
providing aid to those who need it--and only those who need it. The
current application, while enabling millions of students to apply for
college aid, presents significant barriers for low-income and first-
generation students. In an American Council on Education brief, King
(2004) estimates that in 2000 1.7 million low-and moderate-income
students did not apply for aid including approximately 850,000 that
would have been eligible for a Pell Grant. \1\
---------------------------------------------------------------------------
\1\ See Jacqueline E. King, ``Missed Opportunities: Students Who
Do Not Apply for Financial Aid'' (Washington DC: American Council on
Education, 2004).
Policymakers have made some progress in recent years. In addition
to a shorter application with skip-logic embedded to eliminate
irrelevant questions, the IRS Data Retrieval Tool (DRT) now allows aid
applicants to import data into the FAFSA. The prior administration also
changed a policy to allow many more applicants to take advantage of the
DRT. Instead of relying on income (and tax) data from the calendar year
preceding the student's enrollment, the system uses income information
from 2 years before (prior-prior year) for filing for aid. Students and
families are able to apply for aid in the fall, rather than waiting
until they have filed their taxes in the spring--just months before
enrolling in college. \2\
---------------------------------------------------------------------------
\2\ ``Fact Sheet: The President's Plan for Early Financial Aid:
Improving College Choice and Helping More Americans Pay for College,''
White House Office of the Press Secretary, press release, September 13,
2015, https://obamawhitehouse.archives.gov/the-press-office/2015/09/14/
fact-sheet-president percentE2 percent80 percent99s-plan-early
financial-aid-improving-college-choice.
But there is still work to be done. The application process is
cumbersome, and the complex expected family contribution (EFC) formula
makes it difficult for students to know their aid eligibility before
they apply for college. Further simplification is a low-cost way of
increasing the effectiveness of the Federal commitment to broadening
educational opportunities. It is especially important for low-income
students, who are least likely to attend college and who could benefit
---------------------------------------------------------------------------
the most from an improved student aid application system.
Particularly promising steps are
1. determining Pell Grant eligibility using just a few pieces of
information, such as family income, family size, and family
relationships;
2. making Pell Grant eligibility and application available
through an app or a tool that can be accessed using a smart phone or
tablet rather than a computer;
3. maintaining a separate, universal application form for other
aid that relies on branching systems, which eliminate the need for
applicants to view questions that may ask for information that they
don't understand;
4. including far fewer questions and an application process that
allows data to be downloaded directly from tax returns; and
5. changing the information included in the DRT to make
simplification possible through indicator information about sources of
nonwage income.
My testimony is largely based on work I carried out with colleagues
at the Urban Institute, as part of the Gates Foundation's Reimagining
Aid Design and Delivery (RADD) project. RADD brought together 16
organizations to conduct independent research and analysis to uncover
challenges created by the current Federal financial aid system. While
Urban's work included advising and analyzing a simplification plan
proposed by the Gates Foundation, RADD also provided funding for Urban
researchers to examine our own reform proposals, analyze different
initiatives put forth by other organizations, and provide technical
assistance to a wide range of policy analysts and advocates.
The FAFSA calculates an expected family contribution (EFC), or how
much families can reasonably pay toward college. Pell Grants are then
calculated as the difference between maximum Pell and the EFC. Though
the 2017-18 academic year maximum Pell Grant ($5,920) is enough to pay
the tuition and fees at many community colleges, many students--
especially low-income students--fail to apply. \3\
---------------------------------------------------------------------------
\3\ King, Jacqueline E. (2004) ``Missed Opportunities: Students
who do not Apply for Financial Aid,'' American Council on Education
Issue Brief.
My colleagues and I originally examined eight different proposals
for simplifying the FAFSA and application for Pell Grants, allowing
comparisons that will help observers and policymakers make better
choices about how to move forward. The actual simplification plan the
Committee adopts will undoubtedly differ from the ones we modeled.
Table 1 summarizes the characteristics of these plans, while tables 2
and 3 present the relative costs compared with the 2011-12 $5,550 Pell
---------------------------------------------------------------------------
Grant and what types of students get higher versus lower awards.
The proposals, which came from both policy analysts and education
advocates, highlight the tradeoff between vastly simplifying the Pell
Grants award process so more potential students will apply and ensuring
that Federal dollars go to the students who need aid most. Most
proposals would increase aid to low-income students, sometimes through
increased expenditures, but also by better targeting existing dollars.
These proposals often built on each other, with good ideas (like
eliminating questions that apply to very few applicants) adopted in
multiple proposals. This exercise was also incredibly collaborative,
with analysts and advocates communicating and comparing ideas. For
example, many proposals were created by shifting teams of
collaborators, including some of my fellow panelists; we also worked
closely with proposal sponsors and other researchers (most notably Mark
Weiderspan) to confirm that we understood the intent behind the
proposals and were modeling things consistently.
In addition to these proposals, my colleagues and I looked at the
Financial Aid Simplification and Transparency (FAST) Act introduced by
Senators Alexander and Bennet in 2015, \4\ along with the National
College Access Network streamlined FAFSA prototype introduced last
year.
---------------------------------------------------------------------------
\4\ Financial Aid Simplification and Transparency Act of 2015, S.
108, 114th Cong. (2015).
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Notes: Proposal estimates for a National Postsecondary Student Aid
Study data sample of 64,440 observations representing 12.5 million
students (6.5 million dependent and 6.0 million independent) who
applied for financial aid in 2011-12. NASFAA = National Association of
---------------------------------------------------------------------------
Student Financial Aid Administrators.
a. The maximum Pell award accounted for here (generally $5,550)
is before adjusting for enrollment intensity. The percentage given is
out of the full student sample (not limited to recipients under the
proposal).
b. These models include any student receiving an award of at
least $5,550. Students from larger families can receive awards up to
$6,550 under these proposals.
About half the proposals vastly simplified how eligibility for Pell
Grants is determined, replacing the current 100-plus questions with a
system based on two or three pieces of information. These simplified
proposals would allow students to calculate how large a Pell Grant they
are eligible for well before applying for college using information on
income and family composition. A recent proposal (not examined here)
even fully eliminates the application form and has students access Pell
Grants information through their tax returns. \5\ A college scholarship
program in Kalamazoo, Michigan, demonstrates the benefits of
predictable aid: knowing that college would be free led to more low-
income students preparing for and attending college. \6\ In addition,
the Urban Institute has created an interactive calculator that allows
users to enter income and family composition and see how much Federal
grant aid would be awarded. \7\
---------------------------------------------------------------------------
\5\ Susan Dynarski, ``Fafsa Follies: To Gain a Student, Eliminate
a Form,'' The Upshot (blog), New York Times, August 21, 2015, http://
www.nytimes.com/2015/08/23/upshot/fafsa-follies-to-gain-a-student-
eliminate-a-form.html?--r=0.
\6\ See Timothy J. Bartik, Brad J. Hershbein, and Marta Lachowska.
2015, ``The Effects of the Kalamazoo Promise Scholarship on College
Enrollment, Persistence, and Completion,'' Working Paper 15-229
(Kalamazoo, MI: W.E. Upjohn Institute for Employment Research, 2015).
\7\ ``Simplifying Pell Grants: How Different Would Awards Be
across Different Tools?'' Urban Institute, accessed November 21, 2017,
https://www.urban.org/simplifying-pell-grants-how-different-would-
awards-be-across-different-tools.
---------------------------------------------------------------------------
Four proposals would base Pell Grants on a formula, similar to the
current system. These proposals would use better input technology,
along with information already provided through the income tax system,
to simplify how the EFC is calculated. The prior administration's
decision to use income tax information from 2 years earlier already
means that more applicants can access data directly from the IRS. By
using information based on a family's eligibility for other Federal
programs and the complexity of its tax return, the processes greatly
reduce the questions students and their families can face.
To fully implement some of these proposals or simplifications, the
data elements accessed by the DRT system would need to change.
Specifically, to distinguish which applicants should be asked questions
about their wealth or nonwage income, the system needs better
indicators for whether taxpayers rely primarily on wage versus nonwage
income. Many proposals use the filling out of tax forms to indicate
self-employment or farm or capital income. This information can be
obtained by examining specific entries on the various 1040 tax forms.
These more complex formulas could provide a basis for determining both
Pell and other types of financial aid, including Federal loans and
awards from states and institutions. Even with far fewer questions than
the current FAFSA, however, the complexity and lack of transparency in
the calculation of the EFC could keep students from applying.
Given the advantages of both approaches, I believe the best
approach would be assigning Pell Grants using a simple two-or three-
factor model, then using a longer, optional FAFSA for awarding other
aid. This system would let applicants know their calculated Pell Grant
amounts first, then ask if they filed taxes and if their tax return
information can be accessed. Students applying to community colleges
might not need additional aid, but the information about what their
Pell Grant would be may make students more likely to continue the
application process. In addition, younger students (such as middle
schoolers) could calculate what they might get in Federal assistance,
helping them realize that college is attainable.
Families who are not required to file taxes could automatically be
given an EFC of zero and would be done applying for aid after just a
handful of questions, though there would need to be a way to confirm
they do not need to file a tax return. Maintaining some simplified
federally supported FAFSA form would ensure that incoming students
could fill out only one form without returning to a world where
students would have to fill out separate state and institutional aid
forms because the FAFSA is overly simple.
The specifics of such a system, including the maximum Pell Grant
and how quickly Pell amounts decline with income, would be needed to be
set by Federal policy. Decoupling Pell awards from the EFC would
prevent changes in Pell policy from directly affecting eligibility for
other forms of aid. At the same time, states and institutions would
have the information they need to award a total aid package. Indeed,
independent systems would be a return to the way things were; \8\
before 1992 the Pell Grant formula and the congressional Methodology--
the precursor to the FAFSA--were separate. Though the revised FAFSA
would not be necessary for the Pell Grant, maintaining the form will
ease the burden for students by having a consistent aid system across
schools and states.
---------------------------------------------------------------------------
\8\ ``History of the FAFSA and Need Analysis,'' Advisors, accessed
November 21, 2017, https://www.edvisors.com/fafsa/estimate-aid/history-
fafsa-need-analysis/.
My colleagues and I estimated that simplifying the process will
likely encourage more students to participate and therefore could raise
the cost of the Pell Grant program. However, expanding use among
eligible populations is an advantage if it means more people who
thought higher education was out of reach end up attending college.
Further, program and proposal details can be adjusted to meet desired
cost targets. Below I provide more information on possible ways forward
and the costs and tradeoffs of different changes.
Making the FAST Act Even Better
In our analysis, my colleagues and I recommended splitting Pell
Grants from other forms of aid using just two or three factors. It
would drastically simplify the Pell award calculation and remove the
curtain from the current black-box based on the EFC calculation. \9\
Splitting also could mean Federal budget limits on Pell won't lead to
families with higher incomes facing higher EFCs when the formula
changes to limit the costs of Pell Grants.
---------------------------------------------------------------------------
\9\ See ``The EFC Formula, 2016-2017'' (no date or author).
The FAST Act is one proposal using a two-factor model. The FAST
Act's stated aim was to ensure awards of Federal Pell Grants and
student loans get to the students who need them most. Under that bill,
Pell awards would be calculated using just two inputs: prior-prior year
---------------------------------------------------------------------------
income and family size.
The FAST Act legislation included look-up tables and phased-out
awards based on income as a percentage of Federal poverty guidelines,
which vary by family size. \10\ Maximum Pell awards would go to
families with income up to 100 percent of the Federal poverty level
(FPL), and awards would go to zero at 250 percent (except for families
of one, where awards phaseout at 200 percent of FPL). But while the
awards decreased as income increased (save for a few typos), they
didn't do so uniformly. If Congress would like to make awards more
uniform, a formula with a smooth phase down from maximum awards to zero
would make the award dollars less arbitrary. A FAST Act formula for
those between 100 and 250 percent of FPL could look like this:
---------------------------------------------------------------------------
\10\ ``U.S. Federal Poverty Guidelines Used to Determine Financial
Eligibility for Certain Federal Programs,'' US Department of Health and
Human Services, Office of the Assistant Secretary for Planning and
Evaluation, accessed November 21, 2017, https://aspe.hhs.gov/poverty-
guidelines.
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
that is, it would subtract funds from the Pell Grant amount based
on a formula related to how much a family's income is above the FPL.
The formula is complicated, but applicants would never see it; an app
would calculate the amount from easy-to-understand input questions.
Comparing the FAST Act to other options and current awards
illustrates the factors to consider. As part of our RADD research, my
colleagues and I modeled a more generous two-factor formula than the
FAST formula above, with the phase down from maximum award starting at
150 of FPL rather than 100 percent. After comparing both formulas and
an intermediate one with the distribution of awards for a 2011-12
sample of students and examining which students received smaller and
larger awards, we found that the details mattered (table 4).
Unsurprisingly, if the level of income allowed to receive the maximum
Pell Grant is increased, awards for these income groups and the cost of
the program increased.
A critique of basing Pell only on family size and income is whether
it is fair to treat a single parent with a child going to college or a
college student with a child the same as a married couple with no
dependents with one spouse in college. Indeed, two-or three-person
families with a dependent made up most of the students that did worse
under either two-factor plan compared with the existing system.
To ensure that small families would not lose out under such models,
policymakers could use the poverty level for a family of four in the
Pell formula for two-or three-person families with dependent(s). This
adjusted formula would cover small families where the student has a
dependent child or where the student is a dependent.
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Source: Authors' calculations using 2011-12 National Postsecondary
Student Aid Study undergraduate data.
Notes: ``Original'' uses actual family size with specified cap.
``Small-family alternative'' uses family size of four for small
families of two or three with dependent(s). As generous awards are
within $500 of or greater than actual 2011-12 awards.
The families receiving smaller awards or losing their awards under
these simple formulas are mostly those further up the income
distribution: less than 1 percent of families with income below $25,000
would have a smaller Pell under the two-factor model. This alternative
formula for small families with children provides even better coverage
for eligible Pell recipients under all three two-factor models (table
5).
The original two-factor proposals are all fairly cost neutral
relative to actual 2011-12 Pell costs, ranging from a savings of almost
9 percent (under the FAST Act formula) to an additional cost of less
than 1 percent (under the two-factor model). Switching to the small-
family model would serve more students and increase average awards,
though it would also lead to some cost increases for each plan. Even
so, the FAST Act formula would remain less expensive than the current
Pell program, and the increased cost under the two-factor model
outlined on page 8, the most generous of the three, would only be about
6 percent.
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Note: Proposal estimates are for a National Postsecondary Student
Aid Study data sample of 64,440 observations representing 12.5 million
students who applied for financial aid in 2011-12. Average awards are
for those who receive a nonzero award. Baseline estimates are as
follows: cost: $28.32 billion; number of recipients: 8,314,267; average
award: $3,407.
Simplifying the FAFSA for Everything Else
During our RADD research, my colleagues and I examined proposals
that removed questions from the FAFSA form and used technology to both
import much of the income data needed from student's family tax returns
and to implement a skip-question format where students would only see
questions relevant to their circumstances. Such streamlining can help
avoid applicants feeling overwhelmed when faced with the prospect of
answering (and understanding) more than 100 questions. Critical to this
innovation is the IRS Data Retrieval Tool (IRS DRT), which allows
importing of tax information directly into the FAFSA, and the use of
prior-prior income, which makes the relevant information available for
importing.
We looked at proposals that used only tax data, along with
proposals put forth by the Gates Foundation, the National Association
of Student Financial Aid Administrators (NASFAA), and NCAN. Many
proposals made similar changes, both routing students into specific
pathways and eliminating questions that only affected less than 1
percent of students.
Setting up pathways based on information that families already have
can help make applying to college less daunting. Families who are not
required to file Federal taxes due to very low incomes or those
participating in specific Federal safety net programs can be assigned
an EFC of zero. Families with limited wealth, as indicated by a lack of
reported nonwage income, could import required income information from
their tax returns and not be asked about assets or wealth. Students
whose families have more complicated tax returns, which signal that
income might understate their ability to pay for college, could be
required to answer questions about assets and wealth. Because the
taxpayers in this last group have already filled out complicated tax
forms, they are less likely to be intimidated by a FAFSA process that
requires more information. Moving these reforms forward would require
some changes to the DRT system, specifically accessing more information
on the presence of nonwage income or indicators of more complicated
family finances.
It is important to note that maintaining some federally supported
form would be important, so students don't need to fill out different
forms for different universities during the application process.
To highlight how this could work, let's review the streamlined
FAFSA proposal put forth by NCAN. It is similar to both the Gates and
NASFAA proposals and builds on some characteristics of these earlier
proposals. It also outperformed the current FAFSA form when tested with
focus groups of students and potential students. In addition to
proposing changes NCAN actually redesigned the interface for this
exercise, thus highlighting which changes were feasible and which were
remaining obstacles or sticking points for users. To begin, NCAN
shortened the series of questions about the student's eligibility and
demographics. With an updated Federal Student Aid ID and expanded
access to the IRS DRT, many identifying and financial questions were
automatically filled in, saving time and reducing errors. The NCAN
proposal also guided applicants down one of three pathways, limiting
the number of questions to 25. Finally, it allowed for state pages if
specific states wanted to maintain some of the FAFSA's eliminated
questions. This helped ensure that the streamlined FAFSA could maintain
its universality for all Federal and state aid needs.
NCAN's independent testing found that the streamlined FAFSA
resulted in far fewer questions needing to be answered, improved
completion times, half as many errors, and greater reported
satisfaction and usability by applicants. The report also highlighted
some potential redesign elements to accessing the FAFSA that could be
helpful even if simplification of the process were limited. \11\
---------------------------------------------------------------------------
\11\ See Ben Harper and Iva Stoyneva. Performance Study for
Streamlined Prototype Free Application for Federal Student Aid (FAFSA):
Task Duration, Error Rate, and User Satisfaction (Washington, DC: ICF,
2017).
---------------------------------------------------------------------------
Conclusion
It is an auspicious time to continue simplifying how potential
students apply for financial aid. While simplification could increase
costs by about 5 percent or $1.4 billion annually (according to Urban
Institute estimates), these costs represent new opportunities for
potential students who may have felt that higher education was
unattainable.
The move to using prior-prior year income for the FAFSA (and
calculating Pell) was a big step forward to improving the timing of
calculating students' financial aid. But policymakers can go further.
A simplified Pell formula can make aid more predictable and
effective for low-income students, even for those who are not yet
attending college. Further, using an alternate higher poverty level for
small multigenerational families is a simple modification that
recognizes the difference between a married student without any
dependents and a family with a parent and child, one of whom is in
college. Because of technology, this could be programmed into an app
for a smartphone or tablet with the student needing to answer only
three questions to determine the size of the Pell Grant they would be
eligible for:
1. What is your family income?
2. How many people are in your family?
3. Are you or one of your family members a dependent child?
I would also advise maintaining a Federal system for accessing
other aid but decoupling this from Pell awards, so we don't return to a
system where students need to fill out a myriad of forms to access
other aid during the application process. I am excited to see the
Committee continue this important work that hopefully helps more people
thrive and leads to a more prosperous tomorrow for us all.
______
[Summary Statement of Kim Rueben]
This testimony examines the current system students use for
applying for financial aid and various proposals for simplification.
The Free Application for Federal Student Aid (FAFSA) while enabling
millions of students to apply for college aid also presents significant
barriers for some students, most notably low-income or first generation
students. While we have made some progress in recent years with the
shortening of the form, the implementation of an IRS data retrieval
tool and moving to using earlier measures of income, there is still
more work to be done.
This testimony includes descriptions and cost estimates for
proposals made over the last few years including some like the FAST Act
to move to a two or three question model for Pell Grant awards and some
policies that call for simplifying the existing system through the use
of technology and reliance on information available from tax returns. I
conclude that it may be time to decouple the process of awarding Pell
Grants from the rest of the financial aid award system, but that it
would still be important to maintain a Federal application for other
types of aid.
Particularly promising steps would be to:
1. determine Pell Grant eligibility using just two or three
pieces of information, such as family income, family size, and family
relationships;
2. make Pell Grant eligibility and application available through
an app or a tool that can be accessed using a smart phone or tablet
rather than a computer;
3. maintain a universal application form for other aid that
relies on branching systems, which eliminate the need for applicants to
view questions that may ask for information that they don't understand;
4. include far fewer questions and an application process that
allows data to be downloaded directly from tax returns; and
5. changing the information included in the DRT to make
simplification possible through indicator information about sources of
non-wage income.
______
The Chairman. Thank you very much for very interesting
testimony. We'll now go to 5-minute rounds of questions. I'm
going to step down the hall and introduce a Presidential
nominee at another hearing, but I should be back in just a few
minutes. Senator Murray has agreed to chair the Committee
during that time.
Senator Murkowski has the first questions.
Senator Murkowski. Thank you, Mr. Chairman, and I agree--
very interesting panel.
I think it's important to recognize that there's nobody
here on the panel this morning that thinks that the system that
we have in place with the application and the requirements that
we have in place is good and that it needs to be maintained. I
think there is a recognition that we must do more to make sure
that we do not put in place barriers.
I appreciate the recognition that there's a difference
between a form that is annoying and just kind of a pain to fill
out and something that is truly a barrier, and I hear far, far,
far too often that it is a barrier, that you have young people
that look at it and say, ``I can't even go there.'' They bring
their parents into the picture, and they, too, give up.
So I do think that it is important that we look to ways
that we cannot only simplify, but, to your point, Ms. Rueben,
let's come into today's world. The fact that we're talking
about post cards--if I were to ask my son to mail a post card,
I don't know where he'd find a stamp. The reality that we are
doing so much on our smartphones--this ought not be one of
those where we say, well, we just can't do it. So I think as
we're looking to making it simpler, let's also use the tools
that young people are using, which is your device, your phone
there.
I wanted to ask just a little bit--because there's been
good discussion about the verification steps that need to go
into place, and I think we can all agree that we need to work
to address that more readily. But, Dr. McCallin, you had
mentioned the efforts that we could make to work with young
people earlier on so that they don't get discouraged, even
before they get to a more truncated process, which, hopefully,
we're going to put in place, and you mentioned pre-collegiate
outreach.
When we have talked about healthcare and enrollment in
healthcare plans when the ACA was advanced, there was a role
that was designated for navigators, and we know that within the
healthcare system, you can have a patient navigator that can
help you move through the system. Do we need--I understand that
we have counselors in our schools, although, in my view, not
enough. Do we need navigators, or can we make this simple
enough that we don't need to do that, that we shouldn't need a
navigator?
Dr. McCallin. Senator Murkowski, navigators are a wonderful
idea. In fact, the increase in retention rates within college
as well as the completion rates came from a navigator program.
I hadn't quite thought of doing it in high school, but
certainly we know--and we have focus groups in high school--
that that is one of their big issues, that they need somebody
to help them fill out the form and, if you will, hold their
hand and navigate them into college.
Another program we have found to be very successful in
getting students into college who otherwise wouldn't have done
so is concurrent enrollment, so-called dual enrollment,
offering college credit-bearing courses to high school
students. We have found an increase in college-going rates of
23 percentage points. Even after adjusting and assuring that
you have the same academic preparation, the same income levels
and the like, of those students, we have far higher college-
going rates of students who have taken a concurrent course
versus those who have not.
So the combination of navigators, what we call focus
centers in the Denver Public Schools, for instance, where you
have to go in and use their services to apply for FAFSA, as
well as then to apply for other scholarships, and then the
concurrent enrollment have all proven to be good success
stories.
Senator Murkowski. Let me ask you, Ms. Williams--and I just
want to thank you, not only for your testimony here today,
which I think is very helpful and very instructive, but thank
you for your determinedness, your efforts to just stick with a
process that was not easy, that probably made it easier for you
to quit at every turn, and you did not. You graduated. So
congratulations to you. I think you're an extraordinary role
model for so many.
But would it have been helpful for you prior to even
considering college to have something at the high school level
that would have allowed you to more readily move toward it? You
sound to me to be the type of young woman that is going to get
around all the odds, but you also know others that were in
similar situations. How can we make it easier?
Ms. Williams. Thank you for that question. So for me, it
was a little different, because I was a part of a TRIO Program
in high school. So I was a part of the Upward Bound Program
that really exposed me to higher education, which really gave
me that drive to pursue higher education.
However, I think the point of contact should be put in
place on the college level, going into your first year, because
for me, I had the GRASP Program, which is a program that works
around helping high school students to fill out your FAFSA and
get all that documentation done. So I had that in high school.
But when it came to college, I didn't have those resources.
There wasn't a point of contact person at the college, and
coming to VCU as a transfer student, I really didn't know how
to navigate that, because it was different going from a private
school to a public institution.
So, for me, it would be more of a point of contact on the
universities to work with youth experiencing unstable housing
and homelessness.
Senator Murkowski. Very good. I appreciate that. Thank you.
Ms. Williams. Thank you.
Senator Murray. [presiding]. Thank you very much, and on
this side, we'll go to Senator Bennet first.
Senator Bennet. Thank you.
I want to thank Senator Murray for yielding to me because
I've got to run off to do something else. Let me just say in
the last conversation that my friend from Alaska really put her
finger on something so important. When I was superintendent of
Denver Public Schools, we had a local couple who--he was a
graduate of Lincoln High School, and they created--the Marquez
family created something called the Denver Scholarship
Foundation, and what we said was that no kid who graduated from
high school in Denver would be barred from going to college
because of finances. We would find a way.
In order to be eligible for the Denver Scholarship
Foundation, they had to apply to two other scholarships, and in
order to do that, they had to fill out the FAFSA form. Pretty
quickly, we figured out that that was a huge pain point, and we
had to hire people, as Dr. McCallin said, to staff what we
called then Future Centers in our high schools to take people
through these forms.
Now, if people are listening to this at home, this is not a
form that is beyond the skill of our kids to do because they're
poor or because they're homeless. This form is ridiculous. Ms.
Williams pointed to some of the most egregious parts of this
form, which relates to homeless children.
My memory is that there are three different questions that
are asked to tell you whether or not you're homeless, and, in
fact, you get to a certain point in the form halfway through
that says, ``Oh, you're homeless. You can now go to a simpler
part of the form,'' after you go through half of it.
So in the meantime, we do need people to help. But I think
we also, as we heard today in this testimony--we need to
simplify this form.
I wanted to ask Ms. Scott-Clayton and Dr. Rueben--there has
been discussion today and earlier about the concept of a
tradeoff, the idea that by simplifying the form, we risk losing
data granularity and giving aid to students who don't need it.
I believe the risk lies in the other direction. Our current
process, which is needlessly complicated, often intimidates
talented and capable students. Letting bureaucratic red tape
stand between students and higher education is its own kind of
tradeoff, and that's one we've accepted for far too long, in my
view.
I wonder if you could talk--and if others are interested in
answering this--what the effects of simplification are on
financial aid awards under the various proposals. Will most
students see a drastic change in the award using the current
formula? How do questions about untaxed income and assets
typically alter a student's award? Anybody--and, Mr. Draeger,
if you're interested in answering it, too.
Dr. Scott-Clayton. Thank you for that question. Just
briefly, I want to note on the post card thing--purely
conceptual, so let's make it on a smartphone. The idea is to
get the amount of information down so that you can explain it
simply to people.
Senator Bennet. We had, Mr. Chairman, even more unicity
than when you left.
The Chairman [presiding]. Maybe I'll go again.
[Laughter.]
Dr. Scott-Clayton. So with respect to simplification and
how it will affect financial aid, I think one of the most
surprising things when I first started doing this research back
in 2006-2007 was how little so many of these questions matter,
and especially assets, which are so complicated for families to
answer. It's not something that's asked on the tax form. It's
not something that most families just have a single number. You
have to do a lot of work to understand what counts and what
doesn't count.
When it comes down to it, most of that information doesn't
even get used for anything, because the form does exclude home
equity, it does exclude retirement savings, and then on top of
that, it excludes another chunk, which is higher than the level
that most families have. So I think some of the worry is
understandable.
But, actually, when you do these simulations, it turns out
to not matter that much. You can get down to eight questions
and still, for the vast majority--and we're talking 75 percent,
85 percent, 90 percent of applications replicate the Pell Grant
and even replicate the EFC, which is used for a wider range of
purposes within a fairly narrow range, within $100 or $500 of
the original amount.
EFCs, which are used for other types of aid, state aid, and
institutional aid, I completely understand the concern that
schools are using that for other purposes. It is true that some
of this simplification does make a difference for EFC
calculations, but at the high end of thinabove the range, well
above the range that most states are using to distribute their
need-based aid. So I think one thing--institutions that have a
lot of their own aid to distribute need to have accuracy. A lot
of them are already using a separate form. So I'm not sure how
many schools are in that window where they need the extra
complexity but they're not already using this other form.
Dr. Rueben. I would just add that I think it would be
important to--I would separate the two, right. It might be a
little bit of splitting the baby, but I feel like if we had
something like Pell Grant awards based on a couple of questions
that people understand, that would be step one, and it actually
might encourage them to keep going and put in the other
information.
But I do think we don't want to return to a world where
people are filling out different forms for different states or
different colleges. So having something that's easy at the
beginning, but then triggers them to go on and fill out the
more important questions--the other questions would be useful,
I think.
Senator Bennet. I'm actually out of time or over time. But
I wanted to just----
The Chairman. Go ahead, Senator Bennet, if you have
another----
Senator Bennet. I just wanted to make one other sort of
related observation to what both you and the ranking member
talked about at the beginning of this hearing. From Dr. Scott-
Clayton's testimony, she writes, ``while the levels of college
enrollment are higher across the board, the gaps in enrollment
between high and low-income families are actually greater for
recent cohorts than for those born in the early 1960's.''
What that means is that today, the gap between people that
are living in poverty and people that are not, with respect to
whether they're attaining any postsecondary education, is
greater than it was for people born in the 1960's.
That is intolerable, and it's my hope that this Committee
can--not just for the FAFSA but the other work we do--can
actually begin to answer that question or help us answer that
question about why we find ourselves in that position. It's not
a place where our kids should be in a world where we've
discovered that having postsecondary education, as Dr. McCallin
said, is so important to being able to fulfill the employment
needs of this economy. So I just didn't want to let this go
without underscoring that really important fact.
Thank you for being here.
Mr. Chairman, thank you for your leadership.
The Chairman. Thank you, Senator Bennet.
Senator Murray.
Senator Murray. Thank you very much to all of our
witnesses. This has been very informative.
Ms. Williams, I want to start with you. We're so happy
you're here today and just want to congratulate you on what
you've accomplished. You're inspiring, and I have to say it's
impressive you were able to make your way through a very
complicated financial aid process.
I actually have introduced legislation to streamline the
process for unaccompanied and homeless youth as well as foster
youth, and it's called the Higher Education Access and Success
for Homeless and Foster Youth Act. So thank you for your
comments on that.
But we know that's not going to solve all the challenges
that face students. I wanted to ask you once you were able to
get through the FAFSA, what kinds of financial pressures did
you experience that might inform us how we think about both the
form and the entire process?
Ms. Williams. Thank you, Senator Murray, for that question.
So for me, I think the financial pressure was having to work
full time while being a full time student to take care of those
basic needs like food, hygiene products, textbooks, and things
of that nature, and transportation back and forth to work.
So then after I received my financial aid package, it
covered tuition and room and board, but it didn't cover a meal
plan or having mental health services and things of that
nature. I would like to add that without that point of contact
person, I really didn't know how to get in contact with those
other wraparound services I needed at the university.
So for me, also, thinking about housing and how much it
costs to live on campus, and being that if you are facing
unstable housing and homelessness, you can't stay at home. Even
though I'm from Richmond, I couldn't stay at home and go to
school. So living on campus was a priority for me. Having to
take out--because I didn't qualify for a lot of grants, it was
having to think about how much I'm in debt now with loans,
because that's how I got through college, was taking out loans.
Senator Murray. It wasn't just your tuition. It was all the
other costs that you had to pay for to get through it.
Ms. Williams. Yes.
Senator Murray. Thank you. In your written testimony, you
actually clearly demonstrate that FAFSA and financial issues
were not the only obstacles that you faced. Talk to me a little
bit about the other kinds of supports you wish you had as a
student that would have helped you.
Ms. Williams. So I guess I really believe that that point
of contact person is really important on the university campus.
For me, if I had someone who could definitely help me navigate
financial aid and housing and being able to access those things
on campus--I was very fortunate that the nonprofit I co-founded
also supported me through my college years, so I had those
wraparound services, and I had people who supported me.
But when it came to being on campus and understanding how
to navigate being at a higher education institution, I needed
more services that wasn't there. So for me, it was more so like
trying to find my niche and how to advocate for myself, and not
having someone to help me, and feel like that people are
pushing back against me once I asked for help.
Senator Murray. You worked while you were going to school?
Ms. Williams. Yes.
Senator Murray. I had a group of college students I talked
to, and I asked, ``How many of you work and go to school?'' and
they all raised their hands. I asked, ``How many of you have
one job?'' and they kind of looked at me, and I said, ``Two,
three?'' Almost every one of them had three jobs they were
doing while still trying to do their work. So I think we have
to really recognize the full scope of the cost of education. So
thank you.
Dr. McCallin, you talked about the back end of FAFSA.
Colleges' responsibility to students doesn't end once they get
through the initial hoops of filling out that form. There are
additional hurdles, including verification and finding enough
advisers to help students with financial aid questions, all
important. I think it's important that our Committee think
about some of these issues in the context of simplification.
We're focused very much so on reducing the number of questions.
It's an important issue. But many of the proposals out there
still rely somewhat on double and even triple checking a
student's income information from their tax returns.
What are the challenges for our universities with
verification for community college students?
Dr. McCallin. We have to do significant amounts of fact
checking for the students, so much so that oftentimes they will
just say, ``Forget it. I am done.'' But in terms of exactly
what we end up doing, we first have to contact the students for
the verification process. We have to prepare the forms. We have
to make sure they're accurately completing the forms. We have
to advise them on what is an acceptable documentation through
completion of the form with a verification, update any
differences that they had input in the FAFSA form versus what
we're finding in the verification forms. Then once the
corrected data is returned to the processor, an additional
review needs to be made from that. So it's a pretty big
process, so much so that students are feeling it's a big
barrier, and it takes a lot of our time, 25 percent of our
time.
Senator Murray. Not just because of their work, but because
of your work on the back end.
Dr. McCallin. Absolutely.
Senator Murray. What kind of advising and wraparound
services would be needed in a world if we simplified the FAFSA?
Dr. McCallin. Far less. I mean, in particular, if we are
prepopulating with the IRS data, with data we already have in
the Federal Government.
Senator Murray. So what would that mean, that you didn't
have to contact the student as often or----
Dr. McCallin. Correct. I mean, it would be accurate data,
right, for those students who are filing or have families who
filed a Federal income tax form. So if we could reduce the
amount of time on the verification, we could put it in so many
needed student services, like the ones you were requesting,
where you could have a navigator on college campuses showing
students how they can find other resources to help them afford
their college.
Senator Murray. You agree that would be important to do?
Dr. McCallin. Absolutely.
Senator Murray. I'm over time, so I'll----
The Chairman. No, go ahead.
Senator Murray. I can go to a second round.
The Chairman. We'll come back to Senator Murray. Let me
pick up with her questions, if I may.
On verification, if I'm a student at one of your campuses
and you contact me about verifying, do I get my money, or do I
have to wait until it's verified?
Dr. McCallin. My understanding is you have to wait until
it's verified.
The Chairman. That's my understanding, too. Is that
correct, from----
Mr. Draeger. Yes, or you'd be putting at risk having to
return to money.
The Chairman. So you have students who are scrambling to go
to college, and all of a sudden, instead of having their bills
paid when they enroll, they might have to wait until October,
November, December until all this is figured out.
The verification--if we were to--the proposals that we've
all been talking about basically say that once you've given
your information about family size and income to the Federal
Government once, that can be imported to the Federal aid
application. Would that greatly reduce the need for
verification?
Dr. McCallin. Absolutely.
The Chairman. Because what you're really doing is comparing
the information you put on your Federal aid form to the
information you gave to the Federal Government earlier, right?
Dr. McCallin. Absolutely. I mean, that makes all the sense
in the world, too.
The Chairman. We do that here in the Senate. That way, we
catch people. We require them to fill out the same information
on three or four forms, and then they make a mistake, and then
we accuse them of being a crook. That's the difficulty with the
nominations process.
Let me--did you want to say something else about
verification?
Dr. McCallin. No, I'm good;thanks.
The Chairman. Mr. Draeger, you mentioned that a simplified
tax form would simplify the Federal student aid process. If,
say, 90 percent of those who filled out their Federal income
taxes didn't take any itemized deductions, would that create a
simpler Federal aid form?
Mr. Draeger. Yes. So our proposal is that for the majority
of Pell Grant recipients who don't have significant assets and
thereby don't have schedules attached to their tax form, we
could get almost all the information we need right off the
front of the tax form if we just took over the indexed items
from the front.
The Chairman. Without drawing you into the tax debate this
week, the proposals would move from 70 percent to 90 percent
the number of Americans who wouldn't itemize their deductions,
and I suppose that would simplify the process.
Dr. Rueben, basically, you're suggesting--and I believe
others are, too--that we separate out the Pell Grant and ask
two or three questions, and you identified what they were. Now,
that would be about 30 percent or 40 percent of all of the 20
million forms that are filled out now, right?
Dr. Rueben. I think that's right. I also think that if we
actually had people figure out their Pell Grant earlier, that
might actually incentivize them to go through the rest of the
process.
The Chairman. Those three questions were what?
Dr. Rueben. So it basically started with what is in the
FAST Act as original----
The Chairman. But what are the questions?
Dr. Rueben. What is your family income? What is your family
size? Then I would also ask about what your family structure
is, so whether there's a child----
The Chairman. So the first two, you've already reported to
the Federal Government, correct?
Dr. Rueben. Right, and the third one would also be a part
of that.
The Chairman. The third one as well. So, basically, you're
suggesting to take three pieces of information that a taxpayer
has already reported to the Federal Government and----
Dr. Rueben. Right.
The Chairman ----move that out and make a decision about
whether the Pell Grant--whether you're eligible for a Pell
Grant. In what amount?
Dr. Rueben. So I----
The Chairman. Because a Pell Grant can be from $500 to
$5,800-something.
Dr. Rueben. So I would basically use a formula, which
people don't have to see. It could be complicated, but we could
actually put in a formula----
The Chairman. But if I gave you the answer to those three
questions, you could figure it out.
Dr. Rueben. I would come up with a number, yes. It would be
based on how you compare to the Federal poverty line, and so
basically----
The Chairman. Mr. Draeger, do you agree with that?
Mr. Draeger. I agree with most of that.
The Chairman. Well, what don't you agree with?
Mr. Draeger. Well, so the nice thing about using imported
verified or prepopulated data from the tax return is we can get
more of a full picture of someone's financial circumstance and
strength without requiring additional effort on their part.
The Chairman. Right.
Mr. Draeger. So if I know, for example, somebody has real
estate investments but their AGI is zero because of losses
they've written off, or if their----
The Chairman. Do you need that for a Pell Grant?
Mr. Draeger. You don't necessarily need that for a Pell
Grant.
The Chairman. Well, I'm talking about Pell Grant here.
Mr. Draeger. I understand. So for Pell, I wouldn't dispute
it. For the 4,000 schools that award institutional aid, I would
say they would want it.
The Chairman. I did ask you what you didn't agree with. You
were answering my question. But to go back to the--but you
would agree that if it's 30 percent or 40 percent that we could
identify those three questions or so.
Mr. Draeger. I think this is--yes.
The Chairman. Import those from the information we already
have and make a decision about whether you're eligible for a
Pell Grant, and then with back end computations, say the amount
of your Pell Grant is X, between $500 and $5,800.
Mr. Draeger. If the Federal policy decision is to make this
very easy for Pell recipients, I think that's fine, yes.
The Chairman. Thank you.
Senator Franken.
Senator Franken. Thank you, Mr. Chairman. Thank you for
this hearing.
Thank you to all the witnesses for your testimony.
Thank you, Senator Bennet, for working on this for so long,
and I want to thank--I want to take a moment to agree with
Senator Murray that I hope we have broader conversations about
college affordability. In Minnesota, as in every one of our
states, this is so important. In Minnesota, students graduate
owing more than $30,000, and across the Nation, 44 million
Americans are working hard to pay off their student debt.
I was glad to hear the Chairman agree heartily with the
ranking member in his opening statement about trying to work
together with hearings like this, bipartisan hearings, that you
always have on the Higher Education Act.
Mr. Draeger, thank you for your testimony. The tradeoff
between simplicity and accuracy is a great way of talking about
this, of understanding it. In your testimony, you mentioned
that we can rely more on technology after students submit the
FAFSA to achieve both simplicity and accuracy.
Dr. McCallin, in your testimony, you say if we reduce the
time colleges spend on the verification process, we can
redirect the resources to support more students, and I think we
all agree with that.
Ms. Williams, I must say you are an amazingly impressive
person and thank you for the work you're doing.
I guess my question for Dr. McCallin would be if we do what
Mr. Draeger proposes and do more work using technology, would
this help nontraditional students, like, for example, foster
kids?
Dr. McCallin. It would definitely help nontraditional
students, which are the vast majority of whom we serve in
community colleges. As Senator Murray discussed, many of our
students work. Seventy-four percent of our students actually
have to work in order to be able to afford college. So
simplification is important so that they can access all the aid
that they have available to them.
In addition to that, yes, we do rely on the Pell
eligibility in certain eligibility EFCs in order to distribute
aid. But we will adapt to whatever the new system is. I mean,
that is something that we have control over, and if we're able
to understand the income thresholds or whether or not somebody
is eligible for Pell, we'll adapt to that. It's not something
that's set in stone. So for me, from my standpoint, the more
simplistic, the better in terms of helping access student aid.
Senator Franken. We need to simplify FAFSA for students and
their families. We also need to help them better understand the
financial aid award letters that they receive from colleges
after they submit their FAFSA. Right now, these financial aid
letters are very often confusing.
Ms. Williams, I want to ask you about that. They often
clearly don't delineate what's a grant versus what's a loan.
Senator Grassley and I have introduced the Understanding the
True Cost of College Act. Our bill would just make sure that
students and their families get clear and uniform information
so they can make apples to apples comparisons between what the
different schools are offering them when it comes to financial
aid.
Ms. Williams, how would a uniform financial award letter
make it easier for families and students, in particular, low-
come and first-generation college students, to better
understand the true cost of college?
Ms. Williams. I would say that it would help. I know in my
experience, in particular, I think about if I understood what
unsubsidized loans were and subsidized loans were, maybe I
could reconsider trying to find other grants and scholarships
to help pay for college. Like you stated, it does not break
down what are grants, what are loans, what are unsubsidized
loans, and what other loans and grants that you may qualify
for. So I believe if that is understood in the financial aid
package, then, like you stated, you can make a decision on what
university you could go to based on how much they are able to
give you based on your needs.
However, for me, that wasn't a situation until I got to
VCU. It was more of a better understanding, because I had been
in the higher education institute for a year, so I understood
the financial aid letter. But a lot of students don't, and they
assume that when they see unsubsidized loans, they don't know
that it has interest, and then it's going to cost you more to
pay back on the back end. So I believe that simplifying it and
also breaking it down where students can understand it would be
more effective with helping them be able to pursue higher
education and making it more affordable.
Senator Franken. Thank you.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Franken.
Senator Warren.
Senator Warren. Thank you, Mr. Chairman.
I know we're here to talk about ways that the Federal
Government can help more students access financial aid by
simplifying FAFSA, and I agree. There is much we could do to
simplify FAFSA, and I'm happy to work with you on how to do
that.
But I honestly do not understand how we can sit here and
discuss FAFSA simplification as congressional Republicans are
as we speak jamming through a giant tax giveaway to
billionaires and corporations that would make college even more
unaffordable for millions of Americans.
So I appreciate the expertise that every one of you has
shared, and I'm going to submit written questions following
this so I'll get answers on the record for FAFSA
simplification.
[The following information can be found in Questions and
Answers in the appendix.]
Senator Warren. But I want to focus on what's actually
happening in Congress this week.
So, Mr. Draeger, let me ask you. One provision in the
Republican tax bill that passed the House would eliminate the
tax deduction for student loan interest payments. The cost to
students who borrow money to go to college would be $21
billion. Would this tax change help or hurt students who borrow
money to pay for college?
Mr. Draeger. The above--the elimination of the above the
line deduction would make loans more expensive and thereby
college more expensive.
Senator Warren. Dr. McCallin, do agree that this tax change
would hurt your students who have to borrow money to pay for
college?
Dr. McCallin. Yes, it would make it less affordable to go
to college and repay the loans. I would note that our students
are loan averse, in general, and 58 percent of our students do
graduate with zero debt. For those who have debt, it would make
it more costly.
Senator Warren. Make it more costly. All right. Another
provision in this tax bill would repeal tax exemption on
waivers that cover graduate school tuition. The cost to
students who get tuition waivers under this tax bill would be
$5.4 billion.
Dr. Rueben, you're a Senior Fellow at the Tax Policy Center
at the Urban Institute. Would this tax change help or hurt
graduate students?
Dr. Rueben. So we're going beyond what we're talking about
today, and my views are my own and aren't necessarily
attributable to the Tax Policy Center. In the work we've done
in analyzing the House bill, the changes in making college and
graduate school more expensive would hurt graduate students. In
general, between that and treating employer benefits as tuition
is going to make it harder for people to attain the education
and training they need going forward.
Senator Warren. So, Mr. Draeger, do you agree?
Mr. Draeger. Yes. As a general rule, tax and benefits that
are grounded in college access and affordability are doubly
punitive.
Senator Warren. Thank you. According to an analysis
requested by Ranking Member Patty Murray from Congress'
nonpartisan Joint Committee on Taxation, overall, the
Republican tax bill that passed the House would cost college
students an estimated $71 billion over the next 10 years, and
the Senate bill is projected to add more than a trillion
dollars to the national debt, which could lead to even more
cuts in Pell Grants and to higher student loan cost down the
road.
Just to put that trillion-dollar number into perspective
for everyone, we could totally forgive every penny of student
loan debt with the amount of money congressional Republicans
are using to slash the corporate tax rate and still have money
left over--every penny of student loan debt. But the
congressional Republicans don't plan to use that money to cut
student loan debt or to lower the cost of college. Nope. They
propose to use the money to give gigantic tax giveaways to rich
people and big corporations.
So I'm sorry. I do not understand how we can focus just on
helping students access Federal student aid while ignoring the
Republican plan to drive up the cost of college for millions of
families, a plan that could come up for a vote this week.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Warren.
Senator Murray, do you have additional questions?
Senator Murray. I do have some that I'll submit for the
record.
[The following information can be found in Questions and
Answers in the appendix.]
Senator Murray. I just want to make one point following
Senator Warren's comments. I am deeply concerned as well about
the impact on low-income students of the policies that you just
put forward. We already have income inequality. We know that
low and middle-income people earn wages and salaries. Higher-
income people tend to build investments. So these kinds of
policies will have a greater impact on our low-income students.
So I appreciate the comments.
Mr. Chairman, I think it's been a very productive
conversation today. We've heard a lot about the financial aid
process. I think this is an important issue. I hope we can work
together to broaden that to all the challenges that we have
within the higher education process and work together to have
hearings that really help us focus on that. So thank you.
The Chairman. Thank you, Senator Murray.
Senator Franken, do you have other comments or questions?
Senator Franken. Thank you, Mr. Chairman. I'd like to
associate myself with Senator Warren's remarks. This tax bill
will hurt students in so many of the ways that Senator Warren
underscored, and while FAFSA is a very important way to help
students get financing for college, the way this--the giveaway
to the wealthiest people in this country and to powerful
corporations and the provisions that Senator Warren spoke about
will have an enormous detrimental effect on students. I think
that--I would just like to associate myself with her remarks.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Franken.
This has been very helpful. Thanks to all of you for
coming, and our Committee staff, both Democratic and Republican
staff, will want to follow-up with you and get your specific
suggestions as we develop a bill as part of a larger package to
reauthorize the Higher Education Act.
One thing I've noticed is that sometimes if we take our
time, which sometimes people don't like, that just by bringing
up a subject and provoking a discussion, we can make some
progress. I think back to that Nashville meeting three or 4
years ago. We've made a lot of progress, really, since then in
terms of what we call the prior-prior year change, which is
unintelligible to most people, but you can put your--you don't
have to file your application before you pay your income tax,
in other words. So that was a common sense change, and the
Obama administration just did that.
We've also worked with--President Obama endorsed our
general idea on simplifying FAFSA and identified through his
Education Department a number of questions that can be
eliminated, and I think we all have a little better
understanding of what we're doing. So we're at a point where I
think we can come to a result.
Let me see if I can summarize a little bit. The suggestion
has been made by several of you, but Dr. Rueben, specifically,
that one approach would be to separate the Pell Grant, which
would be 30 percent or 40 percent of the 20 million
applications that are filled out every year--that's a lot of
applications, seven or eight million--ask three questions, all
of which could be incorporated from the Internal Revenue
Service that the people had reported, and let an applicant know
if they're eligible for a Pell Grant and the amount; and that
with that same sort of procedure, you could let a person know
that before they are admitted to college so they can use that
money to shop around, and you could even let them know in the
seventh, eighth, or ninth grade so they can raise their sights
a little higher and say, ``Oh, I might be able to afford
this.''
The fact is the average Pell Grant is about the same amount
as the average community college tuition in the country. Most
students hear all this talk about the expense of going to
college, and there is an expense, but that's important to know.
Now, is that just Dr. Rueben's view, or do the rest of you
agree that it would be practical to separate out the Pell
Grant? Then I'll get to the rest of it after that.
Mr. Draeger.
Mr. Draeger. With today's technology and the timing of
prior-prior year that you mentioned, I'm left with the
question: If we can get more data from the tax return, verified
data that the school doesn't have to follow-up with the student
on, why not just do that? Now, if we want to use a separate
index to calculate Pell eligibility, I think that's a fine
suggestion. But to the extent that we can just get as much as
we can from the information the Federal Government already has,
that's where I would lean.
The Chairman. So once is enough in that.
Mr. Draeger. That's exactly right. Once is enough.
The Chairman. Dr. Scott-Clayton.
Dr. Scott-Clayton. I think it's a great idea, and I think
the challenge of asking for more is the communication
challenge. If separating Pell out simplifies that, I think it's
an excellent idea.
The Chairman. Ms. Williams.
Ms. Williams. I also think so, but taking into
consideration for a homeless youth, who may be unaccompanied,
that may be very challenging to get parental information for
them to be able to identify what their income bases are.
The Chairman. That's a good point. Thank you.
Dr. McCallin.
Dr. McCallin. I would agree. I think, though, that we still
would have the challenge of what about those students who don't
have to file a tax return. We need to give consideration to
that.
The Chairman. Now, let me ask this--let me go to all the
other information. Mr. Draeger made the point that a lot of
people give out aid other than the Federal Government, and that
institutions and others and states would like to have more
information. What do we do about those applications? That's
two-thirds, maybe, or 60 percent of the applications.
One suggestion has been that the Department of Education
would gather that other information and make it available,
basically import it from the information already given to the
Federal Government from the IRS and make it available to states
and to institutions.
But my question is: If we were to separate out the Pell
Grant award in the way we just described, what about all the
other information that states and institutions want?
Dr. Rueben, let's start with you and go down the line.
Dr. Rueben. I still think that there's a role for the
Federal Government, and I feel like using technology and using
the tax returns, we could get most of that information in. As
my colleague mentioned, I think part of it is to simplify it
for those lowest-income students, but part of separating it
also would mean that we could disentangle some of the cost
restrictions from Pell on affecting the effective family
contribution and the affordability for other families.
So I feel like you could do a lot of this with technology,
but I think it's worth separating. But I do think there's still
a Federal role for providing that information. In the work that
NASFAA has done and in follow-on work that NCAN has done,
they've actually shown that if you actually have a fairly
simple form, you could get much of the way through, including a
separate state-specifics sheet which would get all of the
questions that most colleges and states would need.
The Chairman. Mr. Draeger, has your organization agreed on
a way to do that?
Mr. Draeger. So there are two pathways forward. One is you
could build in buckets of supplemental questions that may be on
a state-by-state or school-by-school basis that could be
appended to whatever the Federal form is. Right now, there are
about a dozen states that have supplemental forms to the FAFSA,
and there are about 200 schools that use the most well-known
institutional financial aid application, which is the profile.
I think our goal here is that we don't go too far down the
road of having more states and more schools introduce a
separate app. So there's a tightrope we're walking. But I think
if we could index more of the tax return and bring it over,
including the underlying schedule data, that gets us there. I
think for most schools----
The Chairman. The danger--it would put us back to pre-1992.
We did what you----
Mr. Draeger. If it's fragmented, that's right.
The Chairman. Dr. Scott-Clayton.
Dr. Scott-Clayton. I think it's totally doable. I think
that the additional information that's contained in the EFC,
which could be reproduced using information from the tax forms,
is valuable for state and institutional aid distribution. If it
is the thing that brings people on board, I think it's
worthwhile.
I think that my leaning would be toward a more simplified
system that maybe wouldn't even have something like an EFC. But
continuity is important. We're not starting from scratch. So I
think that's a fair consideration.
The Chairman. Ms. Williams.
Ms. Williams. I agree with what they said.
The Chairman. Dr. McCallin.
Dr. McCallin. I'm in general agreement. So the two things
we usually use within our system to determine institutional aid
are the EFC as well as Pell eligibility. So to the extent we
can get something that determines either of those, I think we
would adapt. I mean, really, the access is far more important
to us than having 100 percent accurate data for that
determination.
The Chairman. I would assume without asking that phasing in
what we decide to do would be a wise step so that states and
institutions and organizations could adjust to it and minimize
the chance of a mistake by us or by somebody else.
Senator Warren, do you or Senator Franken have any other
comments?
[No verbal response.]
The Chairman. Senator Murray.
Senator Murray. No.
The Chairman. Well, thanks again for a very helpful
hearing. I look forward to working with Senator Murray in
developing a schedule of--the issues that she mentioned are
issues that I think we all care about. Our Committee has, in
between other big issues, has worked on the Higher Education
Act for about 4 years now, and we have lots of good bipartisan
proposals, and there'll be more to come. So I hope we can have
an aggressive schedule of hearings and roundtables and markups
and do something in the first quarter of next year, and your
participation today is a good beginning.
I ask unanimous consent to submit a statement for the
record from the National College Access Network, and it will be
included.
[The following information referred to follows:]
------
National College Access Network
Thank you for the opportunity to submit comments for the record
preceding the November 28, 2017 U.S. Senate Health, Education, Labor,
and Pensions Hearing, ``Reauthorizing the Higher Education Act:
Examining Proposals to Simplify the Free Application for Federal
Student Aid (FAFSA).'' This hearing is highly timely for students
pursuing higher education. Completing the FAFSA and related
verification process places undue burden both on students and on
colleges and universities. The ongoing bipartisan support to address
this topic, along with the increasing need for students to access
financial aid in order to pay for college, make this the perfect topic
to begin renewed conversations about higher education at the federal
level.
Simplifying the FAFSA is a topic about which the National College
Access Network is passionate. Founded in 1995, NCAN has a mission to
build, strengthen, and empower communities committed to college access
and success so that all students, especially those underrepresented in
postsecondary education, can achieve their educational dreams. NCAN's
400 members span a broad range of the education, nonprofit, government,
and civic sectors, including national and community-based nonprofit
organizations, federally funded TRIO and GEAR UP programs, school
districts, colleges and universities, foundations, and corporations.
Our members are dedicated to improving FAFSA completion rates among
students, but also tell us that a simpler form would allow them to
spend more time providing other types of crucial financial advising to
students--for example, by helping students pick a school with the right
academic match and financial fit to increase their likelihood of
gradation. NCAN and our members are grateful to the Senate HELP
Committee for addressing this important issue for our students.
Why FAFSA Simplification Is Needed
The current FAFSA, while enabling millions of students to apply for
college aid, also presents significant barriers for low-income and
first-generation students seeking to attend college. The application
process has improved with the implementation of an early start date for
form availability and the ability to use older tax income. But these
changes are the foundation upon which greater simplification, leading
to greater access to postsecondary education, can be built.
The recent changes to the FAFSA filing process reversed a four-year
decline in applications through June 30 of the latest FAFSA cycle,
leading to a six-percent increase in overall FAFSAs filed. \1\ Further,
61 percent of the high school class of 2017 completed the FAFSA by
graduation, up five percentage points from 56 percent for the class of
2016. \2\ However, this rate for high school seniors must continue to
rise if our country is to close the equity gap between low-income and
high-income students in college attendance and prepare our workforce
for the jobs of the future.
---------------------------------------------------------------------------
\1\ Warick, Carrie. (11 July 2017) ``FAFSA Completions Up After
Four-Year Decline.'' National College Access Network Blog. Retrieved
from: http:/lwww.collegeaccess.org/Blogltem?dg=77418b90dac14c51
b5676d5fa7fbaf79
\2\ ``National FAFSA Completion Rate for High School Seniors,''
(30 June 2017) National College Access Network. Retrieved from: http://
www.colleqeaccess.org/FAFSACompletionRate
---------------------------------------------------------------------------
As depicted in the graphic below, there are approximately 1.8
million low-income high school seniors annually. Approximately 55
percent of those seniors submit a FAFSA, lower than the overall
national rate. Not all of those seniors will complete the form and half
of those who do are selected for the burdensome verification process.
Of those selected for verification, 22 percent will not be able to
complete the process. In the end, only 31 percent of low-income high
school seniors end up enrolling in higher education and receive a Pell
Grant. The high school class of 2017 left over $2.3 billion in Pell
Grants on the table by not completing the FAFSA and enrolling in
college. \3\
---------------------------------------------------------------------------
\3\ Helhoski, Anna. (9 October 2017) ``How Students Missed Out on
S2.3 Billion in Free College Aid ,'' NerdWallet.com.https:/
lwww.nerdwa11et.com/blog/loans/student-loans/missed-free-financial-aid/
Why are so many students not exploring their financial aid options
as they consider their plans following high school graduation? An NGAN
study demonstrated that there is significant unfamiliarity with the
FAFSA application and completion process among 17- to 19-year-olds,
with most students who did not apply for aid failing to have any
contextual understanding of what aid is or their eligibility for it.
\4\
---------------------------------------------------------------------------
\4\ ``Financial Aid Eligibility Mindsets Among Low-Income
Students: Why Do Some Believe They Can't Receive Financial Aid for
College?'' (October 2016) National College Access Network and HUGE.
Retrieved from: http://www.collegeaccess.org/images/documents/
HugeResearch.pdf
NGAN has identified the following factors as the top barriers to
---------------------------------------------------------------------------
FAFSA completion:
A lack of understanding of financial aid or the
application process;
Overly complex questions and the length of the current
FAFSA; and
The multitude of separate financial and other sources
necessary to complete the form.
Proposed Ideas for FAFSA Simplification
These issues pose large, sometimes insurmountable, barriers for
some students, especially first generation college students. As
discussed earlier, low-income and first-generation students who do not
complete the FAFSA often fail to enroll in college or complete a
postsecondary education, shortchanging themselves, their families and
the American economy.
First created in 1992, the FAFSA is a universal and free electronic
form with 142 questions that is used by students to apply for financial
aid from the U.S. Department of Education, and by institutions of
higher education and states to allocate other non-federal financial
aid. Prior to the creation of the FAFSA, each state awarding aid had
its own form and, on top of that, some institutions had their own
forms, resulting in a complicated, multiform and multistep system for
students. A student applying to one college would need to fill out
three financial aid forms prior to 1992. If the student applied to the
recommended four colleges, the number of financial aid forms could rise
to six.
NCAN recommends that Congress focuses on simplifying the FAFSA in a
user-friendly manner that still maintains the free and universal nature
of the form. The goal should be to create an easier overall process for
students. Based on extensive research, development, and user-testing,
NCAN believes it is possible to design a financial aid application
process that reduces complexity for student aid seekers, meets the
needs of states and institutions and maintains the integrity and
universality of the current FAFSA form.
NCAN recommends targeting the FAFSA based on the complexity of a
student's financial situation, eliminating approximately half of the
current FAFSA questions for all applicants, and reducing the form to as
few as 20 questions (including contact information and demographics)
for the lowest-income students. While this system may sound
complicated, it would be implemented by enhancing the skip logic
already in place in the current FAFSA and would be very straightforward
from the student perspective.
NCAN recommends using this enhanced skip logic to group students
into one of three pathways:
Pathway One: as few as 20 questions for applicants from
families who receive benefits from one of most federal means-tested
benefit programs, allowing these individuals to automatically skip all
financial questions and receive an automatic Expected Family
Contribution (EFC) of $0, resulting in a maximum Pell Grant award
Pathway Two: as few as 23 questions for applicants who do
not participate in a federal means tested benefit program and do not
have to file tax schedules with their taxes
Pathway Three: as few as 25 questions for applicants who
file tax schedules with their taxes
One of the original goals of the FAFSA was to create a universal
form for students to fill out. At the state aid level, some states ask
far more questions than others based on the nature of their state aid
programs. So that states could continue using the federal form, but
also require additional information at their discretion, NCAN
recommends adding an optional state page. Only filers in states that
opt in to these questions would need to answer these additional
questions, which would be primarily focused on residency.
Additionally, the Streamlined FAFSA increases transparency and
reduces the uncertainty in the FAFSA filing process. For example,
applicants from families who receive benefits from a federal means-
tested program can be certain, prior to dedicating their time and
efforts, that they would receive the maximum Pell Grant award--if they
enroll full-time. Therefore, in addition to simplifying the application
process, the Streamlined FAFSA boosts awareness of student financial
aid as well as an applicant's eligibility.
According to research from the Urban Institute, NCAN's
recommendations would increase Pell Grant expenditures by approximately
$1.4 billion, a 5.1-percent increase in the cost of the Pell Grant
program, which is in line with other simplification proposals from
groups such as the National Association of Student Financial Aid
Administrators (NASFAA) and The Bill & Melinda Gates Foundation. Nearly
80 percent of the increase in Pell Grant expenditures would come from
Pathway One Pell Grant recipients. Thus, the Streamlined FAFSA could
ensure that our neediest, most vulnerable students have access to the
student aid they need for a postsecondary education.
Additional Problems Posed by Verification
Filling out the FAFSA is not the final step in accessing federal
student aid for all students. Annually, 30 to 33 percent of Pell-
eligible students do not receive a Pell Grant. \5\ This drop-off
results from a combination of incomplete FAFSAs, students not
completing verification, and students deciding not to enroll in higher
education. Forty-four percent of Pell-eligible students who were
selected for verification in 2015-16 did not go on to receive a Pell
Grant. There is no demonstrable difference between Pell-eligible
students selected and not selected for verification. Given that, NCAN
believes that half of the melt of students selected for verification is
a direct result of the verification process. Said another way, 22
percent of low-income students do not receive financial aid because
they were selected for this additional burdensome review process.
---------------------------------------------------------------------------
\5\ DeBaun, Bill. (13 July 2017) ``On Declines and Verifications:
Insights from the Annual Pell Report,'' National College Access Network
Blog. Retrieved from: http://www.collegeaccess.org/
Blogltem?dg=d6aa53e665a14c46a4f32a6f64614482
---------------------------------------------------------------------------
In its quest to simplify the FAFSA, Congress should also consider
verification as part of the overall burdensome process of applying for
federal student aid. More transparent data released more frequently
through the Office of Federal Student Aid would be a first step at
measuring the impact on students. Improving the linkages between the
Office of Federal Student Aid and other parts of the U.S. Department of
Education and other federal agencies would provide verification
information without putting burden on students and financial aid
administrators. Requesting that the Office of Federal Student Aid
review the risk models and associated triggers for verification
selection could ease the burden not only for students selected, but
also the financial aid administrators who must individually work with
each student. Finally, creating a system where students only need to do
the verification process once, rather than fill out different paperwork
and provide different documents to each school to which they apply,
would greatly simplify the process from the student perspective.
Conclusion
Students who complete the FAFSA are 72 percent more likely to
persist in college than those who do not file. \6\ Further, 86 percent
of four-year college students receive some form of financial aid. \7\
Improving the financial aid application process is crucial to college
access, affordability and retention.
---------------------------------------------------------------------------
\6\ Novak, H., & McKinney, L. (2011). The consequences of leaving
money on the table: Examining persistence among students who do not
file a FAFSA. Journal of Student Financial Aid, 41(3), 5-23. Retrieved
from http://publications.nasfaa.org/cgi/
viewcontent.cgi?article=1012&context=jsfa
\7\ ``Sources of Financial Aid.'' (April 2016.) The Condition of
Higher Education. National Center for Education Statistics. Retrieved
from: https:ffnces.ed.gov/programs/coe/indicator cue.asp
---------------------------------------------------------------------------
There is bipartisan support to improve this process so that more
students can access crucial funds to help support their higher
education. Congress has the ability to make great strides to impact
students' higher education experience and the National College Access
Network applauds the Senate Health, Education, Labor and Pensions
Committee for taking the next steps forward to improve this experience
for students. Whether the solution lies in a reauthorization of the
Higher Education Act or independent legislation, the time to address
FAFSA simplification is now.
______
The Chairman. The hearing record will remain open for 10
business days. Members may submit additional information and
questions for the record within the time if they would like.
The next scheduled hearing before the Committee will be
tomorrow, Tuesday, November 29, at 9:30 on the nomination of
Dr. Alex Azar to serve as Secretary of Health and Human
Services.
Thank you for being here today. The Committee will stand
adjourned.
[Additional Material follows:]
ADDITIONAL MATERIAL
Prepared Statement of Senator Hatch Submitted for the Record
I'd like to thank Chairman Alexander for holding this important
hearing. Like the Chairman, I think financial aid is a great starting
point to begin discussions on higher education because it touches many
different areas in the higher education landscape-access,
affordability, and transparency among them. I am hopeful Congress will
consider a two-prong approach to making higher education more
accessible by first, eliminating unnecessary barriers to the college
application process, and second, providing consumers with better
information and resources to choose a school that's the right fit.
To accomplish the first goal, Congress must act to simplify the
Free Application for Federal Student Aid (FAFSA) process. I was proud
to cosponsor Senator Alexander's FAST Act in the last session of
Congress to simplify the FAFSA form and make college more accessible.
During Tuesday's hearing, we learned that completing the FAFSA
oftentimes can be a cumbersome process that causes students to not
qualify for financial aid. This is particularly a problem in Utah,
where only 34 percent of eligible students fill out a FAFSA form. We
know that FAFSA completion is strongly associated with post-secondary
enrollment. So, the more difficult it is for students to fill out FAFSA
forms, the fewer low-income students in Utah go on to achieve higher
education.
The complicated nature of the FAFSA, in turn, leads to
misinformation about the actual process of attaining access to college.
For example, 44.7 percent of students who did not file a FAFSA did not
do so because they thought they were ineligible for Federal aid.
Verification issues on the back end only exacerbate problems and strip
institutions of valuable resources. The set of data elements subject to
verification-receipt of food stamps, household size, child support
paid, adjusted gross income, taxes paid, etc.-means students may be
flagged for additional verification steps, causing increased delay and
uncertainty. Furthermore, most of those flagged for verification are
low-income Pell-eligible students, yet the additional verification
steps rarely result in changes to aid eligibility. FAFSA simplification
is a commonsense solution that could solve many of the complications
students experience in applying for financial aid. It could also save
institutions valuable time and resources, which could otherwise be used
on financial literacy, student success, and retention and completion
efforts.
It is also vital that we provide students with the tools necessary
to make informed choices about higher education as Congress considers
necessary reforms to the college application process. Earlier this
year, I introduced the College Transparency Act with Senators Cassidy,
Warren, and Whitehouse, which would modernize the college reporting
system for postsecondary data to provide greater transparency for
students, families, institutions, and policymakers. The bill would
provide actionable and customizable information for students and
families as they consider higher education opportunities by accurately
reporting on student outcomes such as enrollment, completion, and post-
college success across colleges and majors, while ensuring the privacy
of individual students is securely protected. Most importantly, this
information will tell students how others with their backgrounds have
succeeded at an institution, and help point them toward schools best
suited to their unique needs and desired outcomes.
Applying to college is the first step on the road to postsecondary
education. We owe it to our students to reduce burdens that prevent
access and give them the tools necessary to choose the best college
that fits their educational needs. I look forward to working with
Chairman Alexander and the rest of the HELP Committee to accomplish
these goals and thank him for holding this hearing.
______
Responses by Justin Draeger to questions from Senator Murkowski,
Senator Warren, Senator Whitehouse, and Senator Hassan
senator murkowski
Question 1. What data elements are absolutely necessary to achieve
the balance between simplification of and access to the FAFSA and
sufficient information to ensure the appropriate distribution of
Federal and other financial aid at various income levels?
Answer 1. Financial aid administrators who have studied this issue
do not believe there is a ``one-size-fits-all'' number of questions or
data elements that perfectly achieves the balance of simplification,
access, and accuracy. Instead, NASFAA recommends \1\ a three-tiered
approach to FAFSA simplification that assesses applicants based on
their predicted financial strength, asking families with the least
complex financial situations the fewest number of questions, and
families with complicated financial situations more questions. For
example, under the NASFAA proposal, a family that indicates they are
already beneficiaries of the Supplemental Nutrition Assistance Program
(SNAP), another Federal means-tested program, would be eligible for a
full Pell Grant with no additional financial questions asked. A family
that files taxes with schedules that indicate business income, for
example, would be asked more detailed questions about their financial
situation. Under this proposal, all applicants would be asked fewer
questions than currently exist on the FAFSA.
---------------------------------------------------------------------------
\1\ ``NASFAA FAFSA Working Group Report'' NASFAA, 2015 https://
www.nasfaa.org/uploads/documents/fafsa--report--1.pdf
---------------------------------------------------------------------------
This proposal is based on the fact that low-income students are
least likely to have complex financial situations, but most likely to
be deterred by a long, intimidating form. It's a reasonable, equitable
solution that aims to strike the best balance possible between
simplification and ensuring the Federal Government, states, and
institutions have the most accurate information about an applicant.
senator warren
Question 1. What student-level metrics and FAFSA questions are
important for states and institutions to have in order to distribute
aid?
Answer 1. Institutions and states vary in the amount of data they
need from students in order to distribute need-based state and
institutional scholarships. The diversity of institutions of higher
education, their student populations and missions, makes it difficult
to narrow down the specific FAFSA data elements that would satisfy all
of their needs for determining eligibility for institutional resources.
Similarly, states' funding levels, policy goals, and other factors--in
many cases including state law--determine which student data will meet
the requirements for their awarding process.
While it's difficult to nail down the specific information that
each state and institution would need, it is reasonable to predict that
it would be problematic for them if the Federal Government moved toward
a two-question FAFSA, as has been proposed. A model that would use only
family size and adjusted gross income (AGI) would most likely not
provide enough information for institutions and states. However,
NASFAA's FAFSA simplification proposal was developed with a mind toward
ensuring that states and institutions would still be able to pull the
information they need from the FAFSA, while ensuring that the lowest-
income students don't have to continue proving they are poor. \2\
---------------------------------------------------------------------------
\2\ Ibid
---------------------------------------------------------------------------
Question 2. Components of the Republican tax bill seek to limit or
eliminate the need for personal itemized deductions. How might this
impact the accuracy of a simplified FAFSA, such as NASFAA's proposed
model?
Answer 2. NASFAA's simplified FAFSA model \3\ directs those
families who file a tax return with schedules to complete FAFSA asset
questions, on the assumption that families who aren't required to file
schedules are unlikely to hold significant assets. If a family's only
schedule was Schedule A (itemized deductions) and that family chooses
instead to take the standard deduction in the future, NASFAA's
simplification model would direct them to a simpler FAFSA filing path,
without most asset questions. This would be unlikely to impact the
accuracy of those families' FAFSAs since Schedule A does not contain
information related to assets other than property taxes on real estate,
and the value of a primary home is already excluded from need analysis.
Families with significant assets, as signified by filing additional
schedules that amount to more than a standard deduction, would be
presented with additional questions under the NASFAA model.
---------------------------------------------------------------------------
\3\ Ibid
---------------------------------------------------------------------------
Question 3. The FAFSA submission and verification process is
conducted annually to ensure accuracy with students' financial status.
Should certain student populations be allowed to skip the annual
submission of this information?
Answer 3. While the FAFSA is currently an annual requirement to
qualify for Federal student aid, verification is not required of all
applicants, nor is it a certainty that a student selected for
verification in 1 year will be selected in another year. Certain
populations, especially low-income students, would likely benefit from
the simplicity of a one-time FAFSA, especially since Pell-eligible
students are more likely to be selected for verification. The data
available suggest that the tradeoff of a one-time FAFSA versus accuracy
may not be significant. In examining the feasibility of the move to
using prior-prior year (PPY) income on the FAFSA, one study found that
PPY income is just 5 percent less ``accurate'' than prior year (PY)
income in predicting current-year income (87 percent vs. 82 percent)
\4\. Another study examining the distributional effects of PPY by
Dynarski and Wiederspan (2012) \5\, found that 77 percent of continuing
students would see a Pell Grant of within $500 of their current Pell
Grant award. In addition, Kelchen and Goldrick-Rab (2003) \6\ observed
a relatively low degree of family income mobility for students whose
families were eligible for Federal means-tested benefits in eighth
grade. NASFAA's own work has found that year-to-year variation in Pell
Grant eligibility is linked to dependency status, institution, and
family income. \7\
---------------------------------------------------------------------------
\4\ ``HEA reauthorization issue: Using ``prior-prior'' year
income'' (Unpublished manuscript) Madzelan, D., 1998
\5\ ``Student aid simplification: Looking back and looking ahead''
Dynarski, S., & Wiederspan, M., 2012: http://www.nber.org/papers/w17834
\6\ ``Accelerating college knowledge: Examining the feasibility of
a targeted early commitment Pell Grant program'' Kelchen, R., &
Goldrick-Rab, S., 2013: http://www.irp.wisc.edu/publications/dps/pdfs/
dp140513.pdf
\7\ ``A Tale of Two Incomes: Comparing Prior-Prior Year and Prior-
Year Through Pell Grant Awards'' NASFAA, 2013.
---------------------------------------------------------------------------
Ultimately, more data is needed to determine which populations
could complete a one-time FAFSA without significantly impacting data
accuracy. To that end, NASFAA is collaborating with the Center for
American Progress (CAP) and the Association of Community College
Trustees (ACCT), using funding from The Lumina Foundation, to model the
impact of a one-time FAFSA by examining changes to family income and
Expected Family Contribution (EFC) over several years. Results will be
published in summer 2018. It is important to note that a potential
drawback of the one-time FAFSA is that states and/or institutions might
add a separate annual application to award non-Federal funds.
senator whitehouse
Question 1. What would be the benefit of requiring all institutions
to accept the FAFSA as the application for institutional aid for any
student who is eligible for the maximum Pell Grant?
Answer 1. Students could benefit from the simplicity of having only
a single application to complete. However, institutions with their own
need-based funds to award would lose the ability to award those funds
with the precision that the data on an institutional application
allows. It is worth remembering that the largest source of higher
education gift aid comes from institutions' grants and scholarships.
Annual institutional scholarship volume is $59 billion, more than
double the Federal Pell Grant ($27 billion), and even exceeding total
annual Federal need-based aid from all sources ($40 billion). \8\
---------------------------------------------------------------------------
\8\ Testimony of Justin S. Draeger, to the Senate Health,
Education, Labor and Pensions Committee'' NASFAA, 2017: https://
www.help.senate.gov/imo/media/doc/Draeger.pdf
---------------------------------------------------------------------------
Given the volume of institutional aid, it is reasonable for
institutions to have discretion over how they choose to award their own
scholarship dollars and given the volume discrepancies, it would not
make sense to require them all to use Federal methodology.
In some instances, students that qualify for Pell Grants would not
qualify for institutional aid. For example, today Pell-eligible
families with so-called ``paper losses'' on their income tax returns,
or with significant home equity or retirement assets, could be eligible
for need-based institutional scholarships based on the FAFSA alone,
whereas a more detailed need analysis using data from an institutional
application would show their true financial strength. At one large,
public 4-year research institution, nearly 10 percent of their students
who received Federal Pell Grants did not qualify for institutional
need-based aid. \9\ At this school, institutional aid is awarded using
a more sophisticated financial need analysis model, suggesting that the
school's assessment of need was more accurate that the Federal
Government's.
---------------------------------------------------------------------------
\9\ Ibid
---------------------------------------------------------------------------
Question 2. The Department of Education has announced an initiative
to create a mobile app for the FAFSA and student aid information. What
should be the key features of such an app? What should be required of
institutions to ensure that students could use the app to receive and
compare financial aid awards? How should institutions use a financial
aid app to provide information and counseling to students?
Answer 2. The app should allow students and parents to complete and
correct the FAFSA, provide them with information about their financial
aid history and remaining aggregate eligibility, permit students to
complete all required counseling, and replace institutional disclosures
in instances where ED already has the information to be disclosed. It
should also provide accurate loan repayment information, including
assistance with repayment plan selection, and give students the ability
to change their repayment plans and make other changes that currently
require the student to contact their servicer. Institutions should have
the option to integrate their own financial aid awards into the app to
allow students to see their complete financial aid packages. Ideally,
the app could integrate with institutional systems to allow students to
accept or decline aid via the app, confirm that they have been provided
with required disclosures, etc. If the Federal Government is going go
down this path, efforts should be taken to ensure it is a one-stop
shop, which would require significant and ongoing collaborative efforts
with schools.
It is important that ED develop a technology framework that
permits, but does not require, institutions to utilize the app in ways
that best serve their students and are within their varying
technological capacities.
Question 3. What is the value of in-person counseling and guidance
for students, particularly for low-income, first generation, and
working adults? What are the barriers to providing in-person counseling
and how can the Higher Education Act reauthorization address them?
Answer 3. There is significant value in in-person counseling for
students, particularly for at-risk populations navigating a sometimes-
complex financial aid ecosystem for the first time. College and
university financial aid offices have staff available for students to
contact with questions regarding their financial aid status. Even for
students who complete online entrance counseling, institutions are
required to have financial aid staff available for in-person
counseling.
However, in a 2015 survey NASFAA conducted, \10\ over 80 percent of
respondents indicated ``not [having] enough counseling staff'' was a
long-term resource constraint--the top long-term resource constraint
identified. In that same survey, 87 percent of respondents identified
``greater compliance workload'' as a major factor leading to resource
constraints. Of the survey's respondents, 68 percent noted resource
constraints greatly or somewhat affect face-to-face counseling. Limited
institutional resources combined with the administrative burden
institutions face in implementing the Federal student aid programs
(such as verification) hinder institutional ability to offer more
robust counseling.
---------------------------------------------------------------------------
\10\ ``2015 Administrative Burden Survey'' NASFAA, 2015: https://
www.nasfaa.org/uploads/documents/ektron/f5fdae89-a23f-4572-9724-
15e5a9f614d2/0d73bf4cd48a43a6a9414b6ec1a6ab9d2.pdf
---------------------------------------------------------------------------
In addition to reducing regulatory burden associated with
compliance, another way to address shortfalls in counseling without a
one-size-fits-all mandate is to provide the authority for institutions
to mandate additional counseling. Currently, colleges and universities
cannot require students to complete any additional counseling beyond
the required entrance and exit loan counseling described in the Higher
Education Act, as amended. The PROSPER Act, passed out of the House
Committee on Education and the Workforce in December, would mandate
annual counseling. NASFAA supports the authority (not a mandate) for
additional counseling as it provides institutions the flexibility to
determine how best to serve and support their students--particularly
low-income, first-generation, and working adult students.
Question 4. What burdens does the verification process place on
students and families? What burden does this process place on
institutions? Does it add additional complexity to the financial aid
process? How does verification affect FAFSA completion? What steps can
we take to minimize the need for verification?
Answer 4. Collecting the documents necessary for verification can
be a burden for some families and students. Some students who are
selected for verification and would be Pell-eligible, never complete
verification out of confusion or frustration. Institutions cannot
disburse aid until verification is completed, which puts the burden on
students to find ways to pay their tuition, room and board, and book
expenses out of pocket to avoid late fees or getting behind in classes.
If the student or family can't pay out of pocket, they can be charged
late fees, or have their next semester registration held.
Financial aid administrators are required to not only verify tax
forms but to also notify and have parents or students make adjustments
to their tax forms if they notice discrepancies, even though they are
not tax professionals. While using prior-prior year (PPY) tax
documentation alleviates some of the time constraints for financial aid
administrators completing verification, as documents begin to flood
offices before the start of the award year and tuition bills are due,
extra burden is placed on administrators to complete the process as
quickly as possible. In addition, Pell-eligible students are more
likely to be selected for verification, creating an extra burden for
institutions that serve more students from that population.
To reduce the number of verifications, ED and the Internal Revenue
Service (IRS) should support the use and expansion of the IRS Data
Retrieval Tool to its maximum capability so institutions are receiving
already verified income information from as many families as possible.
NASFAA has also suggested \11\ that ED suspend and further research
the verification of non-filing requirement to ensure its value in
calculating the Expected Family Contribution (EFC) as it has caused a
significant uptick in verifications for institutions and creates burden
for low-income students and families.
---------------------------------------------------------------------------
\11\ NASFAA Letter to Department of Education on Verification of
Non-filing, 2017: https://www.nasfaa.org/uploads/documents/
NASFAALetteronVONF.pdf
---------------------------------------------------------------------------
More generally, NASFAA believes that ED could undertake a more
nimble, thoughtful, transparent, and data-driven approach in the
process it uses to decide the items to be verified and the documents
required. By conducting a robust investigation of the usefulness of the
required items and documents before implementation and then more
frequently after implementation, ED can ensure the documents and items
requested are still serving a succinct purpose for the verification of
student and parent income information and not creating additional
burden for institutions and families alike.
Question 5. In the past, Congress has taken steps to significantly
simplify the FAFSA for our lowest income students, including by raising
the income level for an automatic determination of zero expected family
contribution. Some of these advances were undone when Congress faced a
budget shortfall. With Republicans poised to pass a partisan tax plan
that adds at least $1 trillion to our national debt, what might be the
consequences for FAFSA simplification, the Pell Grant program, and
other forms of Federal student aid?
Answer 5. Over the last decade we have seen a trend, in higher
education and beyond, of budget politics dictating policy. Our strong
preference is that policy decisions be handled through the authorizing
committees to ensure a thoughtful, deliberative process. More often
than not, when policy decisions get pushed through a budget process it
is done to solve a funding issue, not because it was necessarily a
well-thought out policy change. Anytime there is a squeeze for Federal
dollars, particularly within the Labor-H funding pool, there is always
a risk of damaging cuts to the Federal student aid programs. Ensuring
that these important programs are funded to their maximum levels is of
utmost importance to NASFAA, and is a significant component of our work
each year.
senator hassan
Question 1. One potential side effect of overly simplifying the
FAFSA is that it may lead colleges to rely more on the College
Scholarship Service (CSS) profile as an additional supplement for
determining financial aid. This profile requires substantially more
information from students, which may intimidate families who are
unfamiliar with the college and financial aid process.
Question a. Do you share these concerns?
Answer 1, a. The main concern with oversimplifying the FAFSA is the
impact on accuracy. If institutions--which are the largest source of
grants and scholarships--do not feel they are getting enough financial
information from the FAFSA, they may choose to institute their own
financial aid applications. It is true that many institutions,
particularly those that award a significant amount of institutional
aid, use the CSS profile to supplement FAFSA information. But there are
also a significant number of institutions (nearly 4,000) that do not
use the CSS profile and award their own institutional aid based on at
least some information from the FAFSA. \12\ While we respect the right
of any institution to use its own application to award institutional
aid, we believe the Federal form should do as much as possible to meet
the needs of schools and states so they are not incentivized to create
their own separate form, which would work against the goal of
simplification.
---------------------------------------------------------------------------
\12\ ``Testimony of Justin S. Draeger, to the Senate Health,
Education, Labor and Pensions Committee'' NASFAA, 2017: https://
www.help.senate.gov/imo/media/doc/Draeger.pdf
---------------------------------------------------------------------------
Question b. If schools do start to rely more on the CSS profile,
how can we ensure that socioeconomically disadvantaged students still
have the opportunity to receive as much financial aid as possible?
Answer b. Regardless of what financial aid form students are
utilizing, it is important to make thoughtful and deliberate efforts to
ensure the questions are not a barrier, particularly for low-income
students. Many schools offer fee waivers so that students do not have
to pay to fill out the CSS profile, but the most effective way to
prevent more institutions from using their own form is to set up a
Federal system that does not incentivize them to do so. It is important
to note that NASFAA's FAFSA simplification proposal \13\ is structured
in a way that would simplify the process for the lowest-income students
and families, but still provide enough information for states and
institutions to utilize the data. Under this proposal, there is little
risk of states and institutions moving to their own form.
---------------------------------------------------------------------------
\13\ ``NASFAA FAFSA Working Group Report'' NASFAA, 2015: https://
www.nasfaa.org/uploads/documents/fafsa--report--1.pdf
---------------------------------------------------------------------------
Question 2. Another issue with the FAFSA is that it assumes that
parents are always comfortable giving financial information to the
government. One potential way to reduce this burden could be to
highlight potential eligibility when parents file their taxes.
Question a. How effective do you think putting prompts for
potential financial aid eligibility on tax forms would be?
Answer 2, a. NASFAA has long been interested in exploring avenues
to improve the availability, transparency, and predictability of
Federal student aid. We support efforts to provide additional
information for students and families in creative ways, including
through the tax process, which could range from providing potential
eligibility information to using the tax form as the application for
aid. In fact, NASFAA in 2013 recommended directing the Department of
Education to perform a feasibility study with the IRS to develop a
process in which the tax return could be utilized as the primary
Federal financial aid application vehicle. \14\ Results from the study
could provide valuable insight into the efficacy of this
recommendation.
---------------------------------------------------------------------------
\14\ ``NASFAA Task Force: Reauthorization Recommendations''
NASFAA, 2016 (updated): https://www.nasfaa.org/uploads/documents/
updated--rtf--report.pdf
---------------------------------------------------------------------------
Question b. Do you have any other suggestions for how to ease the
burden some families feel in terms of finding out if their financials
make their children eligible for certain financial aid?
Answer b. One idea to improve early information for students is to
develop a ``Pell Promise'' program where the Federal Government would
provide a ``commitment'' of Pell Grant dollars to low-income students
in ninth grade. \15\ This early information would offer a tangible
incentive for at-risk students to earn their high school diplomas while
providing advance information to aid in financial planning. Section 894
of the Higher Education Opportunity Act (HEOA) of 2008 authorized a
demonstration program similar to the Pell Promise called the Early
Federal Pell Grant Commitment Demonstration Program. Unfortunately,
while the authority to enact this program exists in law, it was never
given funding to get off the ground.
---------------------------------------------------------------------------
\15\ ``Reimagining Financial Aid to Improve Student Access and
Outcomes'' NASFAA, 2013: https://www.nasfaa.org/uploads/documents/
ektron/67439aeb-419d-4e9c-9035-4278d0bbed61/
d19119911e864c39abb555e99f130d122.pdf
---------------------------------------------------------------------------
Responses by Nancy McCallin to questions from Senator Murkowski,
Senator Warren, Senator Whitehouse, and Senator Hassan
senator murkowski
Question 1. What data elements are absolutely necessary to achieve
the balance between simplification of and access to the FAFSA and
sufficient information to ensure the appropriate distribution of
Federal and other financial aid at various income levels?
There has been much research on the number and types of
questions that should be asked and many of the panel experts are far
better versed on the impacts of reducing these questions than am I,
thus I would defer to their expert judgment. However, minimally, FAFSA
applicants should provide demographic, dependency information, and
college selection information. The majority of other data elements can
be obtained through the Income Tax Return through the data retrieval
tool (DRT). Students and families who meet Federal means-tested
benefits such as SSI/SNAP should be automatically eligible for maximum
Pell.
In order to determine dependency status of the student
(and therefore the amount the income to use in Pell determination), the
following demographic data are necessary:
Age of Student (calculated by the date of birth)
Marital Status
Veteran Status-is the student active duty or a veteran?
Is the Student enrolled in a Graduate Program?
Does the student have dependents for whom they provide
more than 50 percent support?
If a student is under 24, does he or she have extenuating
circumstances that entitle him or her to independent status such as
being orphaned, a foster youth, homeless or at-risk of being homeless,
or self-supporting? Consideration should be given to lowering the age
of an independent student to 21 or 22.
Other demographics needed:
Marital status of the parents--this is used to determine
whether one or both parent's incomes should be included in the
calculation.
Household size and number of students in the household in
college
Citizenship status for eligibility of Title IV
For students and/or families who do not file a tax
return, the DRT can be used to verify that no tax return was filed. We
would then need to request them to self-report any income, including
non-taxable income information (such as child care payments, pension
exclusions, etc.)
Question 2. Can you tell us more about what verification steps your
financial aid administrators have to go through and the impact it has
had on your students?
Answer 2. As stated in my testimony, our financial aid
administrators spend approximately 25 percent of their time supporting
the FAFSA verification process. Generally, this includes preparing the
verification forms, assisting students in accurately completing the
verification forms, advising the students on acceptable documentation
required for verification, updating the differences in the FAFSA data
to conform with the information given for verification, and then
reviewing the corrected data that is returned by the Federal processor
to assure the proper amount of aid gets to the student. The following
outlines the specific verification steps and the impact on our
students.
Verification Steps:
i. The first step in verification is that the financial aid
offices must read, understand, and adhere to the Federal Student Aid
Handbook Application & Verification Guide (AVG) each year. For the
2017-18 award year, the AVG is 115 pages long. This guidance changes
every year and has many nuances that may be subject to varying
interpretations.
ii. Colleges need to develop and publish verification documents
in accordance with each verification group for dependent and
independent students.
iii. Once colleges begin processing applications from the FAFSA,
colleges need to identify students who have been selected for
verification from the U.S. Department of Education (ED).
iv. Colleges then need to contact students who have been selected
for verification and request the required documents needed to review
their application based upon their specific verification group and
dependency status. Of the 94,169 students who applied with the FAFSA at
one of our 13 colleges, 37,008 were selected for verification.
v. Once the college has received all the requested verification
documents, we review the data elements submitted on the most recently
received FAFSA against the documents/information submitted to the
school in accordance with the Federal Student Aid Handbook Application
& Verification Guide to verify the data accuracy. If data elements
conflict between the most-recently submitted FAFSA and the documents
submitted for verification, the college is required to make corrections
to the FAFSA and send the information back to the Department of
Education.
vi. The Department of Education then sends a subsequent file with
the corrected information to the college financial aid offices and then
the schools need to ensure no additional changes were made by the
student or another school before they continue processing the aid
application.
Impact on Students:
i. For community college students, verification creates an
additional barrier in regard to timely notification of their financial
aid eligibility due to the document requests, processes, etc.
Verification also adds more complexity to a confusing process for many
of our students. Students selected for verification are generally our
most vulnerable students with limited resources.
ii. In addition, all financial aid administrators need to
understand broad, technical, and changing income tax data elements,
filing statuses, and financial aid guidelines. Furthermore, there are
times when very little guidance is provided by the Department of
Education about what is acceptable documentation. This makes it
difficult to communicate with students and families about what
constitutes acceptable verification documentation.
senator warren
Question 1. You mention that many of your students, who tend to be
first-generation and low-income, are ``loan or debt averse.'' Would
simplifying the FAFSA improve these populations' likelihood of applying
for Federal financial aid?
a. Yes, a simplified FAFSA application would increase the
likelihood of students from these populations applying for financial
aid. For these families, the application process is unfamiliar and
difficult to navigate. Simplification would also enable improved
communication from aid offices to students. Meanwhile, the type of
questions and documentation asked on the FAFSA are often similar to or
the same information that is typically asked when taking out a loan.
Thus, we collectively need to inform and educate students and their
families about the grants that are available to them through the FAFSA
process.
Question 2. In your written testimony, you highlight a table that
presents reasons why individuals did not apply for Federal student aid.
Although 9 percent suggested the ``forms were too much work,'' a
staggering 44 percent indicated ``thought ineligible'' for aid was
their reason for not applying. Based on this information, what else can
be done to improve the likelihood of students applying for Federal
financial aid--particularly Pell Grants?
a. Individuals who thought they were ineligible are likely those
who believe they earn too much money to qualify for grant aid. In many
of these cases, these individuals would likely qualify for some aid,
even if it is a lower Pell Grant amount. Therefore, to improve the
likelihood of students applying for Federal financial aid, simplifying
the way students obtain their Federal Student Aid ID, the FAFSA itself,
and the verification process would improve the likelihood of
individuals applying for aid. On the college side, improved
communication would also encourage more students to apply for aid
regardless of their income level.
Question 3. Many argued that the verification process is a
cumbersome additional step in the FAFSA filing process. There are
proposals to move this process away from an annual requirement and to a
one-time verification process. What are the positives and negatives of
this proposal based on the student population CCCS serves?
a. The positives include making the process less burdensome for
students and removing barriers by streamlining and utilizing more IRS
data available through the Data Retrieval Tool (DRT). The possible
negative is that a student's circumstances could change and that
inequities could occur for aid eligibility, depending on when the one-
time verification took place. Currently, financial aid administrators
address circumstances surrounding life events and income changes for
students and families that may alter their eligibility within the aid
year and this same process could be used if you switch to one-time
verification to ameliorate the concern noted above.
Question 4. You highlight in your testimony that, in Colorado, the
FAFSA is utilized to establish eligibility for both state and
institutional aid. Are there specific components of the FAFSA that the
state and institutions rely on? Does Colorado or any colleges in
Colorado currently require students to complete additional forms for
financial aid?
a. For most state aid and some institutional aid, the primary
components utilized are the Estimated Family Contribution or the
household size, adjusted gross income (AGI) and dependency status. Our
community colleges do not require additional forms for financial aid.
We do not know of the aid requirements for Colorado colleges and
universities outside of our 13-college system.
senator whitehouse
Question 1. Based on your financial aid administrators' experience,
what is your estimate for the portion of students who fill out or
attempt to fill out the FAFSA on a smartphone?
a. We do not have data on this and it is our understanding that
the FAFSA is not yet available on a mobile app.
Question 2. What would be the benefit of requiring all institutions
to accept the FASFA as the application for institutional aid for any
student who is eligible for the maximum Pell Grant?
a. Requiring all institutions to accept the FAFSA as an
application for institutional aid may drive more students to complete
the FAFSA.
Question 3. The Department of Education has announced an initiative
to create a mobile app for the FAFSA and student aid information. What
should be the key features of such an app? What should be required of
institutions to ensure that students could use the app to receive and
compare financial aid awards? How should institutions use a financial
aid app to provide information and counseling to students?
a. First and foremost, the app should be easy to download and
navigate. The app should have all the resources a student needs to
apply for and obtain financial aid, including the Federal Student Aid
(FSA) ID, FAFSA, Loan Counseling, the PLUS application, and more.
b. The app should make the Federal Student Aid (FSA) ID easier
for students to obtain. It is currently a complicated process and is
the first step to FAFSA completion.
c. The app should have one login for everything related to the
process. Currently, there are separate logins for the FSA ID, the
FAFSA, the National Student Loan Data System (NSLDS) where students
find information about borrowing and their borrowing status, the master
promissory note (MPN) for the Direct Loan application and loan
counseling, and the PLUS loan application. Currently, all of these are
separate logins and any app or simplification should consolidate all of
these.
d. Consistent formatting of the student's tentative award letter
with defined fields and explanations of which costs are direct and
which costs are indirect would be helpful. When students see the total
cost of attendance, they often think this is their out-of-pocket costs,
but many of these costs--such as living expenses, room, and board--
would be incurred regardless of whether or not a student attends
college. The shopping sheet is a good example of consistent and
prescriptive award notifications.
e. For the app to be useful for institutions to provide
information and better counsel students, there would need to be a link
between the Federal school code on the FAFSA with the app. This would
make possible linking to the college's primary website, which could
allow more information exchange. The ability to link the student's
personalized shopping sheet at the institution would allow a student to
compare financial aid awards.
Question 4. What is the value of in-person counseling and guidance
for students, particularly for low-income, first generation, and
working adults? What are the barriers to providing counseling and how
can the Higher Education Act reauthorization address them?
a. The value of in-person counseling and guidance is tremendous.
Providing hands-on assistance to the individual student increases the
likelihood of the student following through with the financial aid
process and coming prepared for college. One of the primary student
barriers at our community colleges is limited staffing and funding.
Colorado ranks 47th in the Nation in state funding of higher education
and our community colleges explicitly keep our tuition low in order to
assure access. The limited funding is a key barrier to providing
counseling for students. Meanwhile, aid administrators find it
difficult to balance mandatory compliance items with time available for
in-person counseling. Addressing unnecessary and complex regulations in
the Higher Education Act reauthorization like Return of Title IV funds
and verification processes, would free aid administrators up to provide
more in-person counseling.
Question 5. What burdens does the verification process place on
students and families? What burden does this process place on
institutions? Does it add additional complexity to the financial aid
process? How does verification affect FAFSA completion? What steps can
we take to minimize the need for verification?
a. Within Colorado's Community College System, 94,169 students
applied for financial aid through the FAFSA, but only 53,582 students
completed the financial aid process. Of the 94,169 students who applied
for financial aid, 37,008 were selected for verification and only
16,728 of those selected for verification completed the process.
b. Impact on Students/Families
i. For our population of students, verification creates an
additional barrier to timely notification of their aid award due to the
document request processes. It also adds more complexity to a confusing
process for many of our students. Students selected for verification
are generally our most vulnerable students with limited resources.
Oftentimes, gathering the information for verification is a barrier for
students.
ii. In addition, all financial aid administrators need to
understand broad, technical, and changing income tax data elements,
filing statuses, and financial aid guidelines. Furthermore, there are
times when very little guidance is provided by the Department of
Education about what is acceptable documentation. This makes it
difficult to communicate with students/families about verification,
which creates additional barriers for students/families.
iii. Verification increases the complexity of the process
and causes students to not complete the financial aid process.
c. Impact on Colleges: As stated in my testimony, our financial
aid administrators spend approximately 25 percent of their time
supporting the FAFSA verification process. Generally, this includes
preparing the verification forms, assisting students in accurately
completing the verification forms, advising the students on acceptable
documentation required for verification, updating the differences in
the FAFSA data, and then reviewing the corrected data that is returned
by the Federal processor to assure the proper amount of aid gets to the
student. The verification process (as outlined under 2.a for Senator
Murkowski's questions) is burdensome for colleges. There are many steps
and regulations, and the guidance changes each year. The time aid
administrators spend keeping abreast of changing guidelines and
overseeing the verification process is time not spent counseling
students.
To minimize the complexity of the verification process,
we support significantly reducing the number of questions on the FAFSA.
There has been much research on the number and types of questions that
should be asked and many of the panel experts are far better versed on
the impacts of reducing these questions than am I, thus I would defer
to their expert judgment. However, as stated in Senator Murkowski's
question, minimally, FAFSA applicants should provide demographic,
dependency information, and college selection information. The majority
of other data elements can be obtained through the Income Tax Return
through the data retrieval tool (DRT). Students and families who meet
Federal means-tested benefits such as SSI/SNAP should be automatically
eligible for maximum Pell.
As long as the Pell determination includes dependency
status, the following information is necessary to determine dependency
status of the student (and therefore which income to use in Pell
determination):
Age of Student (calculated by the date of birth)
Marital Status
Veteran Status-is the student active duty or a veteran?
Is the Student is enrolled in a Graduate Program?
Does the student have dependents for whom they provide more
than 50 percent support?
If the student is under 24, does he or she have extenuating
circumstances that entitle him or her to independent status such as
being orphaned, a foster youth, homeless or at-risk of being homeless,
or self-supporting? Consideration should be given to lowering the age
of an independent student to 21 or 22.
Other demographics requested:
Marital status of the parents--this is used to determine
whether one or both parent's incomes should be included in the
calculation.
Household size and number of students in the household in
college
Citizenship status for eligibility of Title IV
For students and/or families who do not file a tax return,
the DRT can be used to verify that no tax return was filed. We would
then need to request them to self-report any income, including non-
taxable income (such as child care payments, pension exclusions, etc.)
senator hassan
Question 1. You mentioned in your testimony that many community
college students do not fill out a FAFSA because they did not have the
correct information about how to apply for financial aid and how to
fill out the FAFSA form. Even if the FAFSA is simplified, we will still
need to ensure that prospective students have access to information
about financial aid availability and the process to apply.
Question a. From your experience, is in-person advising
during the financial aid process important to ensure that students
understand what resources are available to them?
i. Yes, in-person advising is important because it increases the
likelihood the student will complete the financial aid process. By
lessening the burden on the college to collect documentation and verify
FAFSA items, the college can focus more time on in-person advising and
improved communication.
Question 2. We know that students are more likely to complete their
degree or credential when they receive wrap-around services and support
to help them navigate the different barriers they face. Often those
barriers can include access to childcare, transportation, and housing.
Question a. As this Committee considers the
reauthorization of the Higher Education Act, what are some ways you
think we can better assist higher education institutions like yours to
meet the needs of students facing these barriers?
i. Reducing barriers students face in accessing higher
education is an important goal of ours. To that end, decreasing the
administrative burden of the FAFSA and verification removes barriers
for students and frees up college staff to spend more time addressing
the needs of our students. In addition, we encourage continued and
strengthened support of Department of Education grant programs like
TRIO, Perkins, the Supplemental Educational Opportunity Grant, etc.
These programs not only improve access to higher education, but also
student success and credential attainment.
With respect to the recently introduced Higher Education Act (HEA)
Reauthorization legislation from Congresswoman Foxx and Congressman
Guthrie the Colorado Community College System is in favor of the
following provisions:
The allowance of Pell Grants for short-term programs.
This helps address the critical skilled workforce shortage as we offer
many programs that are short-term skills training in response to
business needs.
The additional $300 annual increase in Pell for students
who take 15 or more credit hours.
The restoration of access to the Pell Grant for students
in the ability to benefit category--those students without a high
school diploma or GED.
Provision of financial aid access for some apprenticeship
programs.
The elimination of the Gainful Employment and state
Authorization regulations. These regulations are very onerous for
community colleges in terms of administrative costs; however, we do not
support the elimination of the requirement that 10 percent of an
institution's revenue must come from non-Title IV sources. We are also
supportive of the proposed process that the Department of Education
must go through in order to add and/or change regulations.
The extension of financial aid eligibility to competency-
based education.
The simplification of the Federal Application for Federal
Student Aid.
The following aspects of the bill are problematic for the Colorado
Community Colleges:
The ``risk sharing'' proposal that changes the Return to
Title IV funds provision. These provisions would create substantial
liabilities for community colleges related to students who do not
complete their period of enrollment. They also have a disproportionate
impact on community colleges who are open access institutions and admit
students that have higher risk (both academically and financially) than
traditional students with higher income and family support mechanisms.
The requirement that students earn their financial aid
and receive it in increments delivered like a paycheck will add
substantial administrative burden.
The elimination of the Supplemental Educational
Opportunity Grant (SEOG). The SEOG provides $2 million in aid for our
students, making college more affordable.
The elimination of the Title III-A Strengthening
Institutions grants.
Responses by Kim Rueben to questions from Senator Murkowski, and
Senator Whitehouse
senator murkowski
Question 1. What data elements are absolutely necessary to achieve
the balance between simplification of and access to the FAFSA and
sufficient information to ensure the appropriate distribution of
Federal and other financial aid at various income levels?
Answer 1. This is a great question. The answer depends in part on
how much you weigh the value of simplification over potentially
distributing funds to people who are cash poor but asset rich.
I think having a simplified application for Pell based either on
two or three items or directly on information from 1040 tax forms is
key. This will allow potential students to realize that higher
education is attainable. Allowing students to estimate their expected
Pell Grant while they are in junior high school or early in high school
is important.
For higher-income families, and those that have complicated tax
returns, answering a simple question about whether they have any
earnings from assets or business gains or losses could signal or
indicate that more information is needed. I would have families with
capital assets (say, interest or dividends above $200) or significant
earnings from business or non-wage income answer more questions about
the value of their assets. For these individuals, I would want
additional information based on the actual value or stock of assets
rather than information from tax returns that reflect income flows.
While not based on my work, the other testimony given at the
hearing was compelling. I do feel like having a one-time authorization
process for homeless students or those who have been in the foster care
system would be an important step toward access and simplification.
Question 2. You have advocated for a plan that phases out
eligibility for Pell Grants and ending eligibility when a family's
income reaches 250 percent of the poverty level. Have any of the groups
that have modeled calculations or made recommendations in this regard
determined how that threshold would impact families in very high cost
areas, where living at 200 or 250 percent of poverty on a national
scale actually means the family is really barely able to make ends meet
in their local community? If so, what recommendations have been made
for adjusting the calculations to account for this?
Answer 1. Our tables and formulas use 250 percent (and other
multiples) of the poverty level to phaseout Pell as an example. In our
estimates, we were aiming for a largely revenue neutral alternative to
our current system. With more money, this limit can be raised, but as
under the current system, if eligibility increases more program funds
would go to higher-income students.
I am not aware of studies that have looked at geographical
differences in affordability with respect to Pell eligibility. Though
the cost of living differs in different areas and the current program
is more generous to people living in low-cost areas, I would discourage
adding cost-of-living differences to the Pell eligibility program.
Given that the Pell Grant follows the student and is not tied to a
specific geographic location, other state or school sources of aid
might be better targeted to address regional affordability questions.
Others, including colleagues of mine at the Urban Institute, have
studied the question of regional price differences and what they mean
for safety-net eligibility far more than I have, and it is an important
and complicated question. See, for example, a 2013 Urban Institute
report done for ASPE that considered different ways to adjust measures
of poverty. \1\ We could use supplemental measures of poverty that
adjust for geography. But thus far there isn't consensus, and any index
depends in part on which goods are considered. Many of the current
price indexes do not, for example, focus on the spending patterns of
low-income families.
---------------------------------------------------------------------------
\1\ Lisa Dubay, Laura Wheaton, and Sheila Zedlewski, Geographic
Variation in the Cost of Living: Implications for the Poverty
Guidelines and Program Eligibility (Washington, DC: Urban Institute,
2013).
---------------------------------------------------------------------------
senator whitehouse
Question 1. What are the potential consequences of decoupling the
application for Pell Grants from other Federal student aid?
Answer 1. Decoupling would let applicants know their calculated
Pell Grant amounts first, then ask if their family filed an income tax
return and if their tax return information can be accessed. This may
make students more likely to continue the process. Families that are
not required to file taxes could automatically be given an EFC of zero
and would be done with the process after just a handful of questions.
Federal policy would set the specifics of such a system, including
the maximum Pell Grant and how quickly Pell amounts decline with
income. Decoupling Pell awards from the EFC would also prevent changes
in Pell policy from directly affecting eligibility for other forms of
aid. At the same time, states and institutions would have the
information they need to award a total aid package.
There is a chance encouraging more students to participate will
raise the cost of the Pell Grant program, and proposal details can be
adjusted to meet desired cost targets. The actual simplification plan
adopted undoubtedly would differ from the ones we modeled, but
understanding the costs and tradeoffs of different changes will make
simplification easier.
Question 2. Given that students who receive a Pell Grant are more
likely to also borrow for their education, how would decoupling Pell
Grants from loans ultimately help those students?
Answer 2. I think decoupling would not necessarily affect students
who end up getting Pell Grants and who also access subsidized borrowing
as they'd have to continue the process. However, I feel that if
prospective students see their Pell amount and have that information in
hand, they might be encouraged to continue completing the FAFSA form.
There could also be ways of simplifying the loan program that could
also simplify the information that is required--for example if we
eliminate the subsidized loan program and instead limit borrowing but
encourage students to enter income-based repayment programs.
There is an advantage of separating the two parts if this helps
highlight what aid and support was coming from Pell Grants and what was
provided by loans that ultimately must be paid back. Beyond simplifying
both the application for Pell Grants and the FAFSA form, there should
be clearer information about what types of aid students are receiving
so students understand what debt they are taking on. I agree with much
that was said in the recent hearing about simplification and
transparency of the loan process at all stages.
Question 3. How could Congress ensure that with decoupling the
Federal financial aid system did not return to the patchwork system
that used to exist and that students did not have to fill out multiple,
repetitive forms for financial aid from states and institutions?
Answer 3. Decoupling would actually permit a more complicated FAFSA
form that reflects the information states and institutions might need.
As noted in my testimony, a process like the one advocated and tested
by NCAN includes fewer questions and a more user-friendly interface and
allows for some state-specific questions if states want them.
With changes in technology and the adoption of prior-prior income,
it will be easier for people to automatically enter their information
or for institutions that want more information to use a process like
the College Board Profile that similarly begins by requiring the
uploading and scanning of parents' tax forms.
Indeed, some institutions now require additional information, and
we want to allow them to do so--just in the least onerous way possible.
For example, it seems legitimate for schools to want information on a
noncustodial parent's income or assets, which private schools now
largely get through requesting students fill out the College Board
form. This process now largely relies on parents sending their tax
forms, which seems less onerous than entering information and as a
process has also become easier with the use of technology and the
ability to use prior-prior year information.
Question 4. What would be the benefit of requiring all institutions
to accept the FASFA as the application for institutional aid for any
student who is eligible for the maximum Pell Grant?
Answer 4. As noted above, I do not think requiring all institutions
to accept the FAFSA and only the FAFSA for students for institutional
aid is a good idea. It seems appropriate to me for schools to request
noncustodial parental tax information as long as there is a simple way
for students to show the noncustodial parent is not in the picture.
Question 5. The Department of Education has announced an initiative
to create a mobile app for the FAFSA and student aid information. What
should be the key features of such an app? What should be required of
institutions to ensure that students could use the app to receive and
compare financial aid awards? How should institutions use a financial
aid app to provide information and counseling to students?
Answer 1. This is an interesting proposal, and I think having an
app where you can enter information like your income and number of
family members and possibly including a picture of your tax return as
proof would be a good start for Pell. For an app to work for the entire
FAFSA system, you would need much of the information to be prefilled
through something like the DRT system. Having an app that also could be
individualized for each institution and include information about where
students should go for help with either filling out the forms or
understanding what their aid package is would be useful. This would
allow students to immediately call or text for help in completing the
forms. Allowing access through a cell phone or tablet would recognize
and use the technology that students are increasingly most comfortable
with.
Question 6. In the past, Congress has taken steps to significantly
simplify the FAFSA for our lowest income students, including by raising
the income level for an automatic determination of zero expected family
contribution. Some of these advances were undone when Congress faced a
budget shortfall. With Republicans poised to pass a partisan tax plan
that adds at least $1 trillion to our national debt, what might be the
consequences for FAFSA simplification, the Pell Grant program, and
other forms of Federal student aid?
Answer 6. In the end, budgets (and taxes) are documents that
reflect our national priorities. Much of my work involves tax policy at
the Federal, state, and local levels, and I worry that a consequence of
the recent tax bill (TCJA) and the future drop in Federal revenue will
be less support for spending programs, including Pell Grants, in future
years. While much of the discussion about the tax bill involved ways to
grow our economy and strengthen our country, I firmly believe investing
in the human capital of our people is a more effective way to reach
these goals.
Pell funding, along with the access to higher education that it
gives, can very well face cuts if Federal revenues are tight. My desire
to see application for Pell Grants separated from other parts of the
FAFSA is rooted in the need to expand access. But it would also help to
maintain affordability and access to other financial aid even if the
Federal Government limits Pell Grants in the future. Right now, because
Pell eligibility is tied to EFC, limiting levels of Pell spending might
mean that calculated EFC or the amount of money families are supposed
to contribute would increase. This could have unintended consequences
on other forms of financial aid.
Finally, if there were limits put on Pell Grants, I hope it would
be done in a way to maintain enough funding for the neediest students
to access higher education.
Responses by Judith Scott-Clayton to questions from Senator Murkowski,
Senator Warren, Senator Whitehouse, and Senator Hassan
question from senator murkowski
Question 1. What data elements are absolutely necessary to achieve
the balance between simplification of and access to the FAFSA and
sufficient information to ensure the appropriate distribution of
Federal and other financial aid at various income levels?
Answer 1. The absolute minimum elements required are adjusted gross
income and family size. All simplification proposals have included
these two elements. The next most important, if the goal is to
replicate the current distribution of aid, are the demographics to
distinguish dependency status and family structure (i.e. marital status
of student/parent, student's age, whether student is a parent, orphan,
homeless, foster youth, veteran, etc.).
Number of students in college is also needed if the goal is the
closely replicate the current distribution of aid; however, its role is
modest and using it creates arbitrary inequity between families with
the same number of children, depending upon whether their children
attend college simultaneously versus sequentially. Dependent students'
income is another variable that is modestly important under the current
aid formula, but is not obviously a good thing to consider as it
penalizes students who work while enrolled.
As important as pointing out what is absolutely necessary is
pointing out what is absolutely not necessary: assets. The FAFSA
question regarding savings and net worth are arguably the most
challenging questions on the form to answer, yet they contribute
virtually nothing to aid eligibility for the vast majority of students,
due to exclusions of home equity, retirement, and further asset
disregards. Dynarksi, Scott-Clayton, & Wiederspan (2013) show that
dropping assets completely changes Pell eligibility by less than $100
for 97 percent of applicants, and affects EFC by $100 or less for 80
percent of applicants.
The EFC is the primary criteria used for the distribution of state
and institutional aid. If dropping assets has essentially no effect on
EFC for 80 percent of applicants, it will have little effect on other
forms of state and institutional aid for these students. The remaining
20 percent whose EFCs are affected are concentrated in the upper ranges
of EFC (i.e. above an annual expected family contribution of $50,000,
well above the typical cost of college). While disregarding assets
would lower EFCs for these families, the changes are not likely to be
relevant for the vast majority of state/institutional aid programs. For
example, a four-person family earning $160,000 and with $200,000 of
eligible assets, with one dependent student in college, would see their
EFC fall from about $57,000 to $47,000 if assets were completely
disregarded. \1\ The small number of elite institutions that do offer
need-based aid to such families typically already use the more
comprehensive CSS Profile rather than the FAFSA to determine awards.
---------------------------------------------------------------------------
\1\ Estimates calculated using online calculator available vi
https://www.collegeconfidential.com/efc/.
---------------------------------------------------------------------------
senator warren
Question 1. Through your work, have you found students' eligibility
for Pell Grants or expected family contribution change dramatically
from year-to-year? In other words, if a simplified FAFSA set students'
Federal student aid eligibility for several years, then what is the
likelihood that students who shouldn't be eligible for Pell Grants
would become eligible for Pell Grants or other forms of need-based aid
at the state and institution level?
Answer 1. This is a legitimate concern and one that was also raised
in the context of switching from the use of prior-year tax data to the
use of prior-prior year tax data for the determination of awards.
Reuben, Gault, & Baum (2015) examine how Pell and EFCs would change if
the formula were unchanged but were based on tax information from a
prior year. They found that the resulting Pell and EFC estimates are
highly correlated regardless of which year of income data is used (the
correlation is about 0.90 for both Pell and EFC). Three-quarters of
applicants would see Pell eligibility shift by less than $500,
regardless of which year income is measured. EFC is more sensitive
(with 48 percent experiencing a larger than $500 difference), but the
authors show that most of this sensitivity is at very high levels of
EFC that are unlikely to affect Federal, state, or institutional need-
based aid.
In addition, nationally representative survey data from the U.S.
Department of Education show a high degree of persistence in Pell
receipt from year to year, among students who remained enrolled for at
least 3 years (as far as the data currently track). \2\ For example,
among beginning students who do NOT receive a Pell Grant in their first
year, 88 percent did not receive one in either of the next 2 years.
Among those who DID receive a Pell Grant in their first year, 85
percent received a Pell in one of the two subsequent years, and two-
thirds received Pell in all 3 years. Further, note that some of the
variation in Pell receipt from year to year is due not to income
variability but due to the failure of eligible students to consistently
apply--which is one of the concerns motivating efforts to simplify.
---------------------------------------------------------------------------
\2\ Authors' calculations via NCES Quick Stats, using Beginning
Postsecondary Students 12/14 data base (2011 first-time beginners
tracked through 2013-14 school year).
---------------------------------------------------------------------------
In the case of prior-prior year income data, a consensus emerged
that the benefits of making the process easier and earlier for students
outweighed concerns about the modest variability of income over time.
In my opinion, a similar logic holds when considering fixing aid
eligibility for multiple years.
One additional concern is that if many years of aid are connected
to a single year of income, it increases the incentives for some
families to strategically manipulate income in the focal year. It is
not clear whether this is a large enough concern to outweigh the
significant benefits of fixing eligibility over time. To the extent it
is a concern, however, it could be ameliorated by basing the initial
EFC/Pell calculation on more than 1 year of income data (e.g., the
prior-prior tax year and the year preceding that). If a simplified
formula relied only on tax data and did not require a separate
application, this would add little to the applicant burden and would
make it much harder to strategically shift income over time.
senator whitehouse
Question 1. What would be the benefit of requiring all institutions
to accept the FASFA as the application for institutional aid for any
student who is eligible for the maximum Pell Grant?
Answer 1. This question is primarily an issue at highly selective
institutions (the majority of institutions rely on FAFSA data even for
institutional aid determination). Students who apply to highly
selective institutions are often required to submit an additional, more
extensive financial aid application known as the CSS Profile in order
to be considered for institutional aid. If the FAFSA is dramatically
simplified, but low-income students applying to selective institutions
still face the CSS Profile, then these students will still face
significant complexity and disincentive to apply. Some of these
students may decide to avoid such institutions altogether, even though
they might provide a better educational match for them, in order to
avoid having to fill out the CSS Profile (this may happen already, but
might happen more if FAFSA simplifies and CSS Profile does not).
Requiring all institutions to accept the FAFSA for institutional
aid determination, for students who are eligible for the maximum Pell,
thus has some obvious appeal. This would help ensure that low-income
students are not dissuaded from applying to highly selective
institutions just because of their complicated aid forms. Frankly, this
is a policy I would hope institutions would consider even if it were
not a Federal requirement. However, some timing issues may arise:
students may not have the luxury of waiting to learn whether they are
eligible for the maximum Pell, before they need to begin working on the
CSS Profile in case it is ultimately required.
Question 2. The Department of Education has announced an initiative
to create a mobile app for the FAFSA and student aid information. What
should be the key features of such an app? What should be required of
institutions to ensure that students could use the app to receive and
compare financial aid awards? How should institutions use a financial
aid app to provide information and counseling to students?
Answer 2. Key features of such an app should include the ability to
quickly estimate Federal aid eligibility, as well as state aid
eligibility (for the main, large state programs). One problem with many
existing aid calculators is that they require almost as much
information as the full FAFSA. This takes a long time, and also can
cause students to quit the app if they don't know the answer to one of
the questions. Ideally, an aid estimator would enable a quick estimate
based on just a few key pieces of information (family income, family
size, dependency status). Students could then decide if they want to
fill in more details to get a more accurate estimate. It's also
important that student don't need to sign up or provide any identifying
information in order to get an estimate.
It would also be useful to provide some definitions of basic higher
education and financial aid terms, and perhaps a list of questions
students should ask institutions about their financial aid. For
example, many students do not recognize the difference between public,
private, and for-profit institutions or realize that student loan
burdens and default rates differ dramatically across these sectors. It
would also be valuable to have an interactive tool linked to the
College Scorecard where students could explore individual institutions.
Question 3. What is the value of in-person counseling and guidance
for students, particularly for low-income, first generation, and
working adults? What are the barriers to providing counseling and how
can the Higher Education Act reauthorization address them?
Answer 3. The critical importance of guidance is summarized (among
other places) in a Pell reform proposal I co-authored with Sandy Baum
(Baum & Scott-Clayton, 2013), which recommends that the Pell program
include guidance services both before and after initial enrollment, to
complement its financial support. I highlight a few conclusions from
that report here; see the original report for more details and complete
research citations.
One problem under the current system is that the main sources of
guidance prior to enrollment are high school counselors and college
financial aid offices. Both of these are woefully understaffed to
provide the sort of one-on-one guidance that students need. For
example, many institutions have student-to-counselor ratios as high as
1,500 to 1 (Bettinger, Boatman, and Long 2013). Beyond that, many
prospective students are not currently enrolled in high school, and
colleges themselves cannot provide third-party guidance prior to a
student's decision to enroll.
It's no surprise, then, that students' college decisions are not
always well informed. Students attending community colleges and for-
profit colleges often make their institutional selection haphazardly
and fail to investigate more than one option. Studies have also found
worrisome evidence of undermatching (in which high school students from
low-and middle-income families often do not even apply to the most-
selective institutions for which they academically qualify) and summer
melt (in which high school seniors graduate on time, are accepted to
college, apply for financial aid, and then fail to matriculate in the
fall).
Students also make mistakes after enrollment, taking courses
without understanding whether they meet program requirements. The
choice of major field is critically important, particularly for
students seeking specific occupational education, because of large
variation in earnings by field of study.
As increasing amounts of information about individual institutions
and programs become available online, it is becoming clear that
students need more than just better information: they need guidance in
choosing appropriate paths given their goals, academic preparation, and
circumstances. Research on workforce development also finds that
programs are most successful when participants receive not only money,
but also guidance about their choices and support for managing the
combination of their responsibilities.
While more in-person guidance would be valuable, evidence is also
mounting that simple, low-to-modest-cost coaching interventions that
reach out to students before and during enrollment can have substantial
impacts. For example, in a series of randomized experiments, Castleman,
Page, and Schooley (2013) found that text messaging, peer mentoring,
and proactive outreach were all successful at reducing summer melt,
with costs of no more than $200 per student served. A randomized study
of a student coaching service provided by InsideTrack (a for-profit
company that contracts with individual institutions) found significant
impacts on persistence for a cost of approximately $500 per student per
semester (Bettinger and Baker 2014). In addition to their modest cost,
because these interventions are largely based on phone calls and/or
text messages rather than relying on in-person meetings with a
counselor, they are more accessible for students and potentially easier
to scale up.
Just as some other Federal programs have in the past provided
``navigators'' to help program applicants make the best use of Federal
assistance, the Higher Education Act could authorize some funds to be
directed toward postsecondary navigators. The Federal Government could
contract with organizations to provide such services directly, or could
provide funds to institutions earmarked for guidance and support
services for Federal aid recipients.
Question 4. In the past, Congress has taken steps to significantly
simplify the FAFSA for our lowest income students, including by raising
the income level for an automatic determination of zero expected family
contribution. Some of these advances were undone when Congress faced a
budget shortfall. With Republicans poised to pass a partisan tax plan
that adds at least $1 trillion to our national debt, what might be the
consequences for FAFSA simplification, the Pell Grant program, and
other forms of Federal student aid?
Answer 4. I have two concerns. First is that the language of
simplification that was used to motivate the recent tax reform may have
weakened trust regarding what the term implies. This raises the
importance of extensive evidence showing that when it comes to Federal
student aid, it is possible to radically simplify the eligibility
process without changing the overall distribution of aid, and
emphasizing the degree of consensus, across the political spectrum,
regarding the value of simplification for low-income, minority, and
first-generation students.
With newly tightened budget constraints, higher education may
become a target for cuts at both the Federal and state level. But with
the returns to college as high as they have ever been, now is not the
time to disinvest in college access and completion. We know that
student aid has an impact on enrollment and completion, and that
simplification would increase the ``bang for the student aid buck.'' By
increasing the effectiveness of every Federal dollar spent on higher
education, simplification would further strengthen the argument for
also increasing the level of investment overall.
senator hassan
Question 1. As discussed in the hearing, efforts to simplify the
FAFSA, and the entire college applications process, are bipartisan.
Removing barriers to lower and middle-income students, including first
generation college students to access postsecondary education--
including high quality credentials and apprenticeships, should be one
of our greatest priorities. In 2014, the New Hampshire Higher Education
Assistance Foundation, ``NHHEAF'' launched the campaign, ``I Am College
Bound/ I applied.'' During the campaign, students in participating high
schools are urged to submit at least one postsecondary admission
application. Last year over 1000 students participated. Participating
students receive follow-up assistance with financial aid documents,
including the option to have direct counseling through the Center of
College Planning (CCP) to complete the FAFSA. This campaign is part of
the American College Application Campaign, which is similar to other
national efforts like Better Make Room.
Question a. What role do you see for these types of programs in
helping students complete the FAFSA and subsequently access a more
affordable higher education?
Answer 1,a. Based on research that demonstrates the effectiveness
of other programs providing application assistance and guidance (see my
response to Senator Whitehouse, Question 3 above), I believe these
programs have a significant impact on college access. In our current
context, given the complexity of the financial aid system, many of
these organizations report that a significant focus of their time and
resources centers around helping students with the aid application. If
the aid application could be simplified at its root, so that students
did not require such intensive assistance, this would enable these
organizations to spend more of their time and resources helping
students navigate all of the other aspects of college-going, including
how to find the right school and program, and how to navigate other
logistical and academic hurdles beyond just financial aid.
Question 2. One potential side effect of overly simplifying the
FAFSA is that it may lead colleges to rely more on the College
Scholarship Service (CSS) profile as an additional supplement for
determining financial aid. This profile requires substantially more
information from students, which may intimidate families who are
unfamiliar with the college and financial aid process.
Question a. Do you share these concerns?
Answer 2,a. I understand the concerns, but I think it is not as
serious as commonly thought. First, only 208 institutions out of 4,583
in the US currently use the CSS Profile for domestic applicants. \3\
The vast majority of these schools are highly selective private
institutions which have extensive endowments and significant
institutional aid to distribute, including to families well above
median income levels. One of the main added values of the CSS Profile
is that it helps draw better distinctions between families at higher
income levels, who may have more complicated financial situations. But
the vast majority of institutions, serving the vast majority of
students (and an even larger majority of low-income students), simply
do not have enough institutional aid going to families at these higher
income levels for requiring the CSS profile to be worthwhile.
---------------------------------------------------------------------------
\3\ The full list of current CSS Profile schools can be found
here: https://profile.collegeboard.org/profile/ppi/
participatingInstitutions.aspx.
---------------------------------------------------------------------------
Even if the number of institutions using the CSS Profile doubled--
which I consider extremely unlikely--this would still represent less
than 10 percent of institutions. I believe that the benefits of
simplifying Federal aid for all students outweigh concerns about a
small number of institutions opting to add the CSS Profile.
Question b. If schools do start to rely more on the CSS
profile, how can we ensure that socioeconomically disadvantaged
students still have the opportunity to receive as much financial aid as
possible?
Answer b. First, institutions must make clear that they cannot
require a student to fill out the CSS profile in order for them to
receive Federal student aid. Some students may be confused about this
and may think that if a school uses the CSS profile, they have to
submit it. Second, some have proposed that for students who qualify for
the maximum EFC, institutions should be prohibited from requiring
additional information in order to determine institutional aid. I am
not sure whether such a prohibition would be feasible, but think that
even without such a formal requirement, public pressure could be placed
on institutions to adopt such a policy voluntarily.
Question 3. Another issue with the FAFSA is that it
assumes that parents are always comfortable giving financial
information to the government. One potential way to reduce this burden
could be to highlight potential eligibility when parents file their
taxes.
Question a. How effective do you think putting prompts
for potential financial aid eligibility on tax forms would be?
Answer 1,a. I think this could be very valuable and could lead to
increased college enrollment and completion. Some families/individuals
may never even have heard of the Pell Grant program and may have no
idea how much they could receive. Proactively communicating aid
eligibility could lead more people to consider college in the first
place. Evidence from the Bettinger, Oreopoulos, Long, and Sanbonmatsu
(2012) experiment with H&R Block supports this idea.
Question b. Do you have any other suggestions for how to
ease the burden some families feel in terms of finding out if their
financials make their children eligible for certain financial aid?
Answer b. This is another excellent argument for making the
financial eligibility determination run automatically using IRS tax
data. Parents would not need to reveal their income to their children
directly, just enable them to use the IRS data retrieval tool. It could
even be possible for the data to be pulled from IRS and used in the aid
calculation without ever disclosing it to the child directly.
Simplifying the eligibility formula to the point that parents could
quickly estimate their likely aid even before filing taxes or beginning
the college application process would also help, by helping parents
understand how much money is at stake for their children.
Responses by Elaine Williams to questions from Senator Whitehouse and
Senator Hassan
senator whitehouse
Question 1. What would be the benefit of requiring all institutions
to accept the FASFA as the application for institutional aid for any
student who is eligible for the maximum Pell Grant?
Answer 1. The benefit of requiring all institutions to accept the
FASFA as the application for institutional aid for any student who is
eligible for maximum Pell Grant is that it will afford individuals the
opportunity to be informed on the financial responsibility that the
student will be taking on before committing to the institution. In
addition, it will help students be able to gain knowledge of their
eligibility for other state and federal aid that the student could
potential received once the allotment of qualified Pell Grant is
disclosed to the institution and student.
Question 2. The Department of Education has announced an initiative
to create a mobile app for the FAFSA and student aid information. What
should be the key features of such an app? What should be required of
institutions to ensure that students could use the app to receive and
compare financial aid awards? How should institutions use a financial
aid app to provide information and counseling to students?
Answer 2. The key features of the mobile app should consist of an
explanation of the student's award letter, a way to submit
documentation for forms, reminders, information on ways to contact
financial aid counselor and a Q & A section. The institution should be
required to provide information to each student about the app when
arriving at the institution and through transfer orientation. It should
also be readily accessible on all campus technology for individual who
may not have certain devices to access the app.
Question 3. What is the value of in-person counseling and guidance
for students, particularly for low-income, first generation, and
working adults? What are the barriers to providing counseling and how
can the Higher Education Act reauthorization address them?
Answer 3. The value of a point of contact, who works specifically
with low-income, first generation, and working adults students is being
able to have someone who will help them navigate the different entities
of the institution while helping eliminate the challenges that prevents
students from being successful. One barrier to providing adequate
counseling is the lack of knowledge on laws that protects foster and
homeless youth who are accessing higher education. In addition, the
lack of having an access point person for youth experiencing homeless
and foster youth, which makes it challenging to navigate the challenges
that youth face at the institution.
senator hassan
During the hearing, you mentioned that you had struggled in college
to access the basic help you needed to truly succeed as a student--
including housing and mental health services.
Question a. Can you describe how having gaps in supports affected
your ability to earn your degree, and how it affects the students you
work with in Richmond?
Answer a. The gaps in the support that affected my ability to earn
my degree were the lack of knowledge about the services offered at the
university such as mental health services, over the break housing on
campus and assistance with navigating the different entities of the
institution.
Question b. What kind of supports do you think would be most
helpful for students navigating financial aid and on other important
areas?
Answer b. The supports that would be most helpful are having
mentors or point-of-contact person s who assist with explaining the
process and help troubleshoot problems that may arise when navigating
financial aid and other areas.
______
[Whereupon, at 11:38 a.m., the hearing was adjourned.]