Student Loan Forms Are Still a Nightmare

Massachusetts Sen. Elizabeth Warren went to Charlestown High School in Boston recently with one message for students gathered in the gymnasium to hear her speak. It was about getting ahead—but not simply by studying hard or avoiding trouble. If they planned to go to college, the senator was there to tell the students, it was essential that they fill out the Free Application for Federal Student Aid.

“Is the form complicated? Yes,” Warren said during the January visit. But, she said, “If you don’t fill out the form, how much money do you get? None.”

Minutes later, Warren witnessed for herself how hard that was. She paced from station to station in a community room at the school—88 percent of whose students are low-income, 94 percent nonwhite, and more than half non-native English-speaking—where a dozen seniors were huddled around their computer screens struggling with the lengthy form, which is required to qualify for a piece of $159 billion a year in federal, state, and institutional grants and loans for college.

“What’s the problem here?” she asked. “Are you a U.S. citizen? You need your Social Security number to fill out the FAFSA.” Another hand shot up. “I don’t know what the Selective Service is,” the student said. “Are you registered with the draft?” Warren responded. “That’s what that means.”

On her way out, Warren gave the kids a thumbs-up and told them to “hang in there.”

They’ll need to. In spite of at least eight years of promise after promise from politicians that they would make the FAFSA easier, the form remains a barrier to college for many students. The first significant reform took six years to finally make its way to students, who are seeing it for the first time now, as they face deadlines this spring to complete and submit the crucial questionnaire.

It’s unclear whether these changes will have an impact on the estimated 2.3 million students a year the National Association of Student Financial Aid Administrators says would qualify for aid but don’t fill out the FAFSA. About 45 percent of high school seniors don’t complete the form, according to the Education Department. The White House has announced a push to increase those numbers, not by making more improvements to the FAFSA, but by imploring students to finish it and recruiting mentors to help them.

“All you have to do to access that aid is fill out this one little form,” First Lady Michelle Obama told a group of high school students in Virginia. “It’s so simple.”

In fact, there are still 100 questions on the FAFSA’s six pages, many of which have several parts and ask for sensitive financial data beyond what’s required even on a tax return. Some are straightforward, but many are so convoluted they require their own separate sections of instructions.

Take, for example, Question 45, which has 10 parts. It requires that students list any “untaxed income not reported in items 45a through 45h, such as workers’ compensation, disability, etc. Also include the untaxed portions of health savings accounts from IRS Form 1040—line 25. Don’t include extended foster care benefits, student aid, earned income credit, additional child tax credit, welfare payments, untaxed Social Security benefits, Supplemental Security Income, Workforce Investment Act educational benefits, on-base military housing or a military housing allowance, combat pay, benefits from flexible spending arrangements (e.g. cafeteria plans), foreign income exclusion or credit for federal tax on special fuels.”

And that’s just Part I.

“Imagine you’re a 17-year-old from a disadvantaged socioeconomic background,” said Tom Allison, policy and research manager at Young Invincibles, an advocacy group that represents the interests of 18- to 34-year-olds. “You’re a first-generation college student. You don’t have a parent that’s familiar with this form, which is over 100 questions long and asks for a lot of financial and tax information. You’re setting this kid up to fail.”

Bills introduced in Congress have tried but failed to streamline this process, beginning with the “College Aid Made EZ Act” in 2008. In the waning days of the George W. Bush administration, White House officials urged Congress to cut the FAFSA down to two pages by using only adjusted gross income and the number of tax exemptions to determine aid eligibility. That didn’t happen either.

During the 2008 presidential campaign, both Barack Obama and John McCain advocated for simplifying the FAFSA, though Obama went a step further, proposing to eliminate the form altogether and replace it with a box on federal tax forms that families could check to indicate their interest in financial aid. Once he was in office, Obama’s Council of Economic Advisers recommended removing questions about savings and assets beyond what the Internal Revenue Service requires for taxes, saying the “entire financial aid process hinders postsecondary educational attainment for low-income students from the very start.” And five years later, when the Obama administration unveiled a push to help those students get college degrees, a key piece of the plan was to provide FAFSA completion assistance because the form is so difficult.

But change has been unremittingly slow.

The persistent complexity is partly because the financial-aid formula itself is so confusing, said Barmak Nassirian, director of federal relations and policy analysis at the American Association of State Colleges and Universities.

“With the FAFSA, it’s better to own your home,” for example, said Nassirian, who advocates simplifying the form. “Better than that is to own a farm, and better than that is to own a small business with fewer than 99 employees.”

There is again some hope that Congress, which determines the financial-aid eligibility formula, may this year whittle down the FAFSA with the scheduled reauthorization of the Higher Education Opportunity Act. In hearings, education experts have been pushing for a form that asks about just two things: family size and income. But there’s another complication that worries student advocates—even the ones who agree the FAFSA needs to be simplified. States and colleges use the form to determine their financial-aid awards, too. If the FAFSA is slimmed down, students could wind up having to fill out two or three forms instead of just one.

“It really is a double-edged sword,” said Kim Cook, executive director of the National College Access Network. “Potentially every state and every college could decide they need their own form. If we really want to solve this problem, everybody has to buy into a simplified federal form.”

FAFSA defenders argue that the recent improvements have made it easier. But there is still much room for improvement, according to a new report from the College Board.

In 2008, lawmakers permitted the Department of Education to let users simply link to their own tax information from the IRS on the form’s online version, rather than having to re-enter it from scratch. That change has just taken effect—six years later, thanks to the red tape involved in having the two federal agencies talk to each other.

The department also has incorporated something called skip logic, which lets students bypass questions that don’t apply to them. These reforms have cut the average completion time from two hours to about 23 minutes, according to department officials, though they made that estimate based on focus groups and not an actual accounting of how long people stay logged in online.

Cook is skeptical.

“Did the DOE split hairs here?” she asked. “You might be able to fill out the form in 23 minutes once you have all the information gathered, but that probably doesn’t include the prep time the FAFSA takes before you even sit down in front of your computer.”

This year’s changes have provided little help to Kristyn Hughes’s students, she says. Hughes is a guidance counselor at Charlestown High, many of whose students are in foster care and have to document the lack of parent involvement. Others have to convince skeptical guardians to share financial information they don’t want to give.

For others, the problem is with timing. The earlier you file, the better, meaning families have to finish their taxes well before the April 15 deadline that they’re due to the IRS.

“It puts a lot on kids who are unfamiliar with the process,” Hughes said, noting that these experiences aren’t unique to Charlestown. “They think, why bother, and it’s sad because the people who need it the most are the most discouraged by the form.”

This story was produced by The Hechinger Report, a nonprofit, nonpartisan education-news outlet based at Teachers College, Columbia University.