As part of his campaign's focus on education, President Obama pledged his administration would address issues of the financial aid application process, such as the length and complexity of the Free Application for Federal Student Aid, or FAFSA. Education Secretary Arne Duncan has previewed some of the administration's proposed changes, with a formal announcement expected today. While not as sweeping as the two-page FAFSA EZ Congress already mandated when renewing the Higher Education Act last year, these changes are still a step towards simpler financial aid applications.
Changes will be rolled out in phases, with the first phase being a smarter FAFSA on the Web. Rather than forcing students to read fine print to determine whether they need to provide information requested by each question, as of next January, the application will use the information students have provided to determine which questions they need to answer. Students with independent status will not be shown the questions about parental income and low-income students will not be shown certain questions about assets that they don't need to complete. This is a fairly simple step to save time and hassle, and eliminate some of the barriers that keep students most likely to be eligible for federal grant programs from applying.
A pilot program has also been initaited to test the feasibility of allowing students to access their tax information online to complete the FAFSA. If successful, it could be expanded to all users, saving headaches involved in finding their 1040s, W2s and related forms, then scouring each for the correct lines to copy into the FAFSA.
Duncan also stated that the administration will seek permission from Congress to begin taking steps that could eventually result in eliminating the FAFSA entirely and relying solely on tax information to apply for federal student financial aid. While not explicitly stated by Duncan, it could be an end result of his request to Congress to remove questions from the FAFSA that do not pertain to information reported to the IRS on a student's (or their parents') 1040. Once the complicated need analysis formula of the FAFSA has been set aside in favor of this simplified process, the idea of allowing students to apply for aid by checking a box on their tax return seems almost within reach.