[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

                               __________

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                                Pensions


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          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.]