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A Policy Prescription to Fix the FAFSA

As millions of young people are set to graduate college in the next few months, policymakers and stakeholders wait to see if recent improvements to the FAFSA will translate into more students getting much-needed aid to access and graduate from college going forward.

In 2016, the Department of Education implemented a set of reforms to make filling out the FAFSA easier. Applicants can now use older, more readily available tax information from the year prior, can apply starting on October 1 instead of January 1, and can use a data retrieval tool (DRT) that auto-fills a majority of the required financial information. Despite initial problems with the DRT that caused it to be suspended for the latter months of the FAFSA filing process last year, the number of overall FAFSA applications filed increased by 10 percent.

Advocates are now waiting to see if a full year of the DRT – combined with more time for students, parents, and administrators to familiarize themselves with the recent FAFA reforms – will yield an even larger jump in 2017-2018.

While results have been positive thus far, there is still more that Congress can do to improve the FAFSA going forward. The Class of 2017 left $2.3B on the table in federal financial aid by not completing the FAFSA. Reform and simplification of the FAFSA already has bipartisan support and was the subject of a Senate Health, Education, Labor and Pension Committee hearing in late 2017.

Some things Congress could do include:

  • Codify the new improvements into law: the use of prior-prior year tax data, the October 1 start date, and the usage of the data retrieval tool
  • Allow low-income students to only have to fill out the form one time, upon entering college, to maintain eligibility for need-based aid and loans
  • Raise the threshold for a household to get an automatic zero estimated family contribution from roughly $24,000 to $33,000, ensuring more low-income families receive maximum Pell Grants and need-based aid is going to the people who need it most
  • Make participation in income-assistance or health care programs like SNAP, TANF, SSI, or Medicaid an automatic trigger for students to receive the maximum Pell grant

Throughout this week, Young Invincibles is lifting up the voices on students on their experience with the FAFSA. Too many students still face challenges that prevent them from completing the form and getting the aid they depend on to attend college. To learn more about their stories, check out our Millennial Voices page. To stay in touch about policy debates on improving the FAFSA, join our higher education email list here.