Earlier FAFSA Popular, but Problematic, Too

Advocates for students say a set of changes to the federal financial aid process for which they've long advocated will help many thousands of families who need federal aid to pay for college.

But those changes -- automatically populating the Free Application for Federal Student Aid with family income data already filed for tax purposes and releasing the application months earlier -- are causing uncertainty for both colleges and the advising professionals who work with students. Those concerns have focused most prominently on whether colleges will move up their financial aid deadlines in order to get award notifications to students sooner, a Department of Education priority.

In years past, high school seniors applying for federal student aid would have to estimate their family’s income information for the previous year. That can be a challenge even when applying close to the March deadline because many families don’t have their taxes completed until tax day in mid-April.

For low-income students, especially, that made the process more onerous and frequently led to burdensome verification checks of family incomes. The Education Department believes the use of the latest tax information filed with the Internal Revenue Service by a student’s family, combined with a new Oct. 1 release date of the FAFSA, will make the application process easier for low- and middle-income students who need federal aid to pay for college.

Higher education groups see the FAFSA changes this application cycle as a starting point for further simplification of the financial aid process down the road.

The prior-prior year income data, as the two-year-old tax information is known, was a policy idea that got kicked around for years before the department’s Federal Student Aid office was able to include an automated data retrieval tool in the online FAFSA. The idea had bipartisan interest and was talked about for possible inclusion in the next reauthorization of the Higher Education Act. Late last year, however, the department announced it would adopt the change without any congressional action. Along with that change, the department moved up the release of the FAFSA two months from Dec. 1.

Under Secretary of Education Ted Mitchell has urged colleges and universities to provide notification of financial aid awards to students earlier in the admissions process, so that they can make better-informed decisions about where they can afford to enroll. In response, a handful of institutions have moved up their deadlines for priority financial aid to as early as November. Some colleges have said that in order to get students news of financial awards sooner, they need to receive FAFSA forms from students earlier as well.

College access advocates have said those earlier deadlines could end up hurting lower-income students by compressing the financial aid timeline for high school seniors already neck-deep in admissions applications.

“We fully support the early FAFSA program,” said Carrie Warick, director of partnerships and policy for the National College Access Network, which advocates for low-income students. “What we are watching closely is how colleges react to these changes. In particular our goal for early FAFSA was to give students more time to go through the process, and if those deadlines are moved particularly into November, we fear that it really truncates the entire admissions process.”

NCAN had sought further clarification from the Department of Education on financial aid deadlines, joining a number of members of Congress who raised concerns to groups representing colleges and universities.

Mitchell released a letter this week asking institutions not to move any priority financial aid deadlines up from those used in previous years.

Justin Draeger, President and CEO of the National Association of Student Financial Aid Administrators, said colleges are experiencing a “bit of whiplash” from the communications urging them to make financial aid decisions earlier but not to move up application deadlines.

“From a school standpoint, I think you look at both of those things and you’re sort of left with conflicting guidance,” Draeger said. “From our perspective, it's about making students aware and letting schools implement what works best for their populations.”

Both groups were among several organizations to welcome the use of prior-prior year income and earlier release of the FAFSA. But each one brings its own perspective on the potential pitfalls and complications of the new process.

In some states, like Arizona, each institution has its own deadline for financial aid applications. Student advocates say that can make it difficult to communicate a cohesive timeline to applicants' families. A survey released by the American Association of Collegiate Registrars and Admissions Officers suggests that only a handful of colleges have decided to move up their financial aid deadlines so far. And although a separate survey indicated the numbers may be higher, it appears that most colleges opting to do so are tuition-dependent institutions, often private, nonprofit ones.

Draeger said if the colleges are being urged to get notifications of financial aid packages to students sooner, it’s to be expected that some would opt to push up deadlines. Others may have to account for state budget cycles that affect the institutional aid they are able to award.

The University of Akron, in Ohio, is this year moving its priority aid deadline from March 1 to Dec. 1. The financial aid director, Jennifer Harpham, said the earlier deadline will allow the university to get notifications of its offer to students and compare that to other institutions. But the deadline only applies to campus-based federal financial aid -- work-study and Supplemental Educational Opportunity Grants.

Harpham said she has been surprised during summer visit days at the number of incoming high school seniors and parents who know about the new deadlines.

“We bring it up with them in conversations and they’re already aware of it,” she said.

Linda Jensen, director of Arizona College Access Network, said various advocates in higher ed have come at the FAFSA issue from different angles.

“Some people see it as ‘let’s allow more time for students to get their FAFSAs submitted.’ Other people see it as ‘let’s get their FAFSAs submitted earlier and allow the universities to get them packaged that much earlier so they can make informed decisions based on how much financial aid they’ll get from their chosen institutions.’”

Northern Arizona University has moved its priority financial aid deadline to Nov. 15 from Feb. 1. Arizona State University has moved its deadline to Jan. 1 from March 1, while the University of Arizona kept its March 1 deadline.

The state's College Access Network, which works with high schools as well as community organizations across Arizona, is responding to the earlier deadlines by encouraging high schools to have students think about admissions and financial aid applications as part of one holistic package of college-going activities. The hope among higher education policy analysts on all sides of the FAFSA issue is that the data retrieval tool on this year’s FAFSA makes it much easier to complete the application.

And Jensen and other student advocates hope the process becomes easier later in the process, too. Many students fail to complete their FAFSA each year because of a burdensome verification process after students have submitted their family’s income information. For applicants marked for verification, financial aid offices must request additional forms documenting family income and assets.

“Verification kills us,” Jensen said.

That process won’t be completely eliminated for all students. Both student advocates and financial aid officers are hoping use of prior-prior year income data will significantly cut down on the issues that get an application flagged for additional review. Reducing those additional checks will mean less work for students’ families and financial aid offices.

The focus for many organizations right now -- at the national, state and local level -- is making students aware of the changes in the FAFSA process. David Hawkins, executive director for educational content and policy at the National Association of College Admission Counseling, said the group reaches 800,000 students through college fairs each fall and is telling families about the new process at every turn.

“We have our foot on the gas,” he said.

Policy experts are calling this a transition year for the financial aid process. Regulators, elected officials and colleges themselves will be paying attention to how the new timelines work out. It’s possible that institutions that maintained traditional deadlines this fall could opt to move them forward in subsequent years. Hawkins said observers will also be watching for potential undesired effects, like a drop in diversity on campus or a declining number of students from low-income backgrounds.

NASFAA’s Draeger said this year could also be a launching point for further simplification of the financial aid process -- steps that will likely require the intervention of Congress in addition to the Department of Education.

“This was the first step in really getting to true financial aid application simplification. It’s about creating this easy, seamless application process that's built on existing data and processes,” he said. “We can stop having poor people prove over and over again that they're poor.”

Draeger noted that there was bipartisan support for incorporating prior-prior year tax data into the FAFSA before the Department of Education took action. The outcome of this first year of the new application process could inform other possible changes to the financial aid application.

“To me this is the beginning of a multiyear process,” Draeger said.