The FAFSA is Not Too Complicated Part One | Why the FAFSA Can Be Confusing

Part One: Confusing perspectives, confusing timelines A few weeks ago, Representative Elijah E. Cummings of Maryland issued a report that called out 111 private colleges for publishing financial aid instructions that did not clearly explain that the FAFSA was the only application students needed to submit to secure federal financial aid. In our February 6^th blog post, we pointed out that Representative Cummings’s claim about these instructions, while accurate, was more likely to hurt lower income students than help them because federal funds are not the largest source of financial aid for students from low and middle income households. Since Representative Cummings’s report was issued, a vocal group of critics have made an incredible assertion: that colleges which require students to provide more information than the FAFSA collects have erected an almost insurmountable barrier to college access for students from lower and middle income families. I would like to praise the colleges that recognize that the FAFSA is inadequate to assess a student’s family’s ability to pay and ask the federal government to reverse the recent FAFSA simplification trend by adding questions to this critical federal form. As regular readers of the College Coach blog know, I am a college finance specialist who was a financial aid officer at MIT and Babson College before coming to College Coach, where I work with families planning to send their children to college. And obviously, I am also a taxpayer who wants his federal and state tax dollars to be used wisely and for clearly defined purposes. I believe in higher education and believe that financial aid programs are instrumental in making college accessible to students at all income levels. Why am I telling you this? Because I am going to make the unpopular case that the Free Application for Federal Student Aid (the FAFSA) is too simple to meet its goal. The form is used to give colleges a sense of a family’s ability to pay for college, but it fails to meet this objective. It ought to ask more questions in order to accomplish its goal. If you’ve completed the FAFSA, or just heard about it from others who have, you must be shaking your head in disbelief right now. But give me a chance to convince you. I firmly believe that the FAFSA is a simple form to complete for parents of college upperclassmen, who are usually asked to submit it in the spring, after they have filed their taxes. Parents of first year students, on the other hand, are asked to complete the form before they have had a chance to complete their income tax returns for the relevant year. April 15^th is not only the deadline for completing income taxes for the year, but it is also a deadline colleges have set for themselves to answer all applicants’ admissions and financial aid applications. Colleges need to set a FAFSA deadline for first year students that is earlier than the income tax deadline, so that they have time to process the form by April 15^th. Families struggle with the FAFSA not because the questions are hard, but because of this timing issue! Here’s an example: The 2014-2015 FAFSA asks, “What was your parents’ adjusted gross income for 2013? Adjusted gross income is on IRS Form 1040—line 37; 1040A—line 21; or 1040EZ—line 4.” This is a pretty straightforward question on May 1st, after the applicant’s parents have filed their income tax returns. But it’s pretty tough to answer on January 30th, before the income tax returns have been filed. The question is not hard, but meeting the college’s deadline is! So why do I say the form is too simple? Because as a taxpayer who wants his tax dollars to be used wisely and for clearly defined purposes, I do not believe the FAFSA asks enough questions of a student applicant to make sure that limited financial aid funds are going to the right students. I have several concerns about information the FAFSA fails to collect. In my next blog, I will propose adding two questions to the FAFSA that I think can go a long way toward making the form more comprehensive. Check back later this week as we'll be outlining two important shortcomings of the FAFSA in determining how financial aid is allocated.