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Financial Aid Professionals Propose Three Paths for FAFSA Forms

Although many proposals have been floating around Washington to simplify the Free Application for Student Financial Aid, professionals who deal with campus financial aid programs believe they have found a solution that strikes just the right balance.

A working group from the National Association of Student Financial Aid Administrators released a report today that outlines a new process it maintains will streamline the federal aid application process while still capturing important data that colleges need to make awards.

"If it's too simple, everyone starts to look the same, and it incentivizes colleges to introduce their own form," said Justin Draeger, president of NASFAA, a membership organization of financial aid administrators based in Washington, in a phone interview

The NASFAA proposal would create three different paths for filling out the FAFSA, depending on the complexity of a family's financial situation.

Low-income families with few assets who have already qualified for federal aid through other programs would answer the bare minimum number of FAFSA questions. Those with more complicated financial circumstances would have longer forms, depending on if they are simple tax filers (1040A, EZ, 1040 without forms or schedules) or 1040 tax filers with forms and/or schedules.

The NASFAA recommendations include letting families use records from their income from two years earlier to determine student aid eligibility. (Several organizations signed a letter in support of such a 'prior-prior' income policy last December.)  Now income from the previous year is used in the FAFSA calculation. The change would give families more time to apply for and consider financial aid officer. The NASFAA report also encourages expansion of the IRS Data Retrieval Tool DRT so existing information is imported directly from family's tax returns.

Ideas, such as the two-question FAFSA proposal led by Senator Lamar Alexander (D-Tenn) are drawing attention to the issue, but Draeger says many of them are not realistic to those who work on the ground with students. Without enough data, supplemental application forms would likely be generated.

Draeger notes that some simplification has occurred and, on average, students now can fill out the FAFSA in less than 30 minutes.

The next step for NASFAA will be for its members to approach lawmakers about its recommendations and see how to best weave them into the reauthorization of the Higher Education Act, said Draeger.

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