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December 21, 2009 6:47 PM Federal Student Aid Changes, Sort Of

By Daniel Luzer

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The Free Application for Federal Student Aid (FASFA) has long been one of the more irritating aspects of the college application process. Students, or their parents, fill out this mega-form to determine eligibility for financial aid. The six-page questionnaire, filled with redundancies, irrelevant questions, and lacking potentially important information, can take several hours to fill out (and is a significant source of confusion, particularly for low-income families). Even former Education Secretary Margaret Spellings once complained about the form:

It’s 6 pages long, has more than 120 questions and it asks how old you are three different ways. It makes you wish for tax day!
It’s red tape like this that keeps 40 percent of college students from even applying for federal aid. That’s nearly 8 million students. And we believe most would have been eligible for assistance.

Of course that was back in October, 2008 and it was Spellings’s department that was responsible for the form. Well Rome wasn’t built in a day; one administration and 14 months later, FAFSA just got a little better. According to an article in Kiplinger’s Personal Finance:

This year the job will be easier. The 2010-11 FAFSA on the Web, which can be filed starting in January, shortens the application by as many as 22 questions. It skips questions that don’t apply to your circumstances. (For instance, female students are not asked about Selective Service registration.) It also includes help boxes and prompts based on information you provide, and it more clearly identifies which sections apply to parents and which apply to students.

The new FASFA will also give the applicant potentially relevant information (e.g. retention and graduation rates) about the schools to which he is applying. The new FAFSA, when completed, also gives the family information about the financial aid their child is likely to receive.

All these changes, while helpful, are really only design fixes. The FASFA formula still counts assets against financial aid, to the detriment of responsible financial planning. Fixing that would be a structural change, requiring actual legislation. According to the article, that sort of modification won’t happen for at least a year.

Daniel Luzer is the news editor at Governing Magazine and former web editor of the Washington Monthly. Find him on Twitter: @Daniel_Luzer