House bill to simplify college aid application

On the Money

Your Money

April 01, 2007|By Gail MarksJarvis | Gail MarksJarvis,Tribune Media Services

If you have just finished applying for financial aid for a college student, you might have a few gray hairs.

Filling out a Free Application for Federal Student Aid (FAFSA) - the form required for obtaining low-interest loans and college grants and scholarships - is a grueling process. It's so confusing and time-consuming that parents often start to think of their tax return as a walk in the park by comparison.

Keep your eye on Congress if you are among them. A bill sponsored by two Democrats, Rep. George Miller of California and Rep. Rahm Emanuel of Illinois, is intended to make it easier to apply for financial aid. The "College Aid Made EZ Act" would simplify the FAFSA form.

"You shouldn't need a graduate degree in engineering to fill out a financial aid form," Miller said.

Yet the form is more complicated than many of the ones businesses must complete when they want government grants or loans, he said.

Emanuel contrasts the FAFSA, with about 100 questions, to the simpler form used by the Export-Import Bank.

"Multibillion-dollar corporations fill out 13-question forms to receive millions of dollars in Export-Import Bank loans," Emanuel said. "Shouldn't it be just as easy for high school seniors and their families to pay for college?"

Of course, businesses have hired guns to advocate for their positions. And they roll out estimates of dire consequences for companies and the economy if businesses are overburdened with paperwork. Case in point: the constant cry that Sarbanes-Oxley Act requirements cause businesses to struggle, or to go private.

The complaints on behalf of students have been more quiet as parents curse FAFSA forms in the privacy of their own homes. Yet the Institute for College Access and Success, a nonprofit student advocacy group, contends that the FAFSA deters families from seeking aid.

The American Council on Education estimates that 1.5 million students didn't apply for Pell grants - free money for low-income students - in 2004, even though they would have qualified for the aid.

"The costs of aid complexity falls heavily on low-income, non-white and non-English-speaking youth, whose lagging educational levels are repeatedly cited as a justification for financial aid," wrote Harvard economists Susan Dynarski and Judith Scott-Clayton in a recent report.

To make aid more accessible, the bill sponsored by Miller and Emanuel would create a simple financial aid form for people making less than $20,000 a year.

The bill to simplify the federal application would set up a system in which families would be relieved of about two-thirds of the questions they must now answer on their income and assets.

Instead, parents would give permission to the Department of Education to access personal Internal Revenue Service tax records, and transfer financial data automatically into appropriate slots in the FAFSA.

The system would be much like the mortgage-application process, said the Institute for College Access and Success. Instead of applicants filling in tax information, the IRS would route the required data to mortgage institutions.

The institute contends that the simple process would eliminate mistakes on FAFSAs, and allow college financial aid offices more time to evaluate the needs of students rather than checking calculations on applicants' paperwork.

According to the federal Advisory Committee on Student Financial Assistance, colleges spend about $432 million a year verifying that data in financial aid forms is correct.

Gail MarksJarvis writes for Tribune Media Services and is the author of the book "Saving for Retirement Without Living Like a Pauper or Winning the Lottery."

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