A group of policy experts charged with the arduous task of rethinking strategies for student financial aid recommends an overhaul of the financial aid process, beginning with simplifying the financial aid application by tying it to a family’s tax return in addition to creating a better college savings program for low-income families.
These recommendations and others emerged from a study conducted by a consortium of policy experts, academic researchers and higher education professionals called the Rethinking Student Aid group. The group’s cochair Dr. Sandy Baum, a professor of economics at Skidmore College and senior policy analyst for the College Board, outlined the recommendations Thursday during an online forum hosted by the Hechinger Institute on Education and the Media and the College Board.
A key proposal called for the elimination of the Free Application for Federal Student Aid (FAFSA) form entirely from the financial aid process, basing federal Pell Grant eligibility on family size and adjusted gross income. The group would also allow automatic annual increases to the Pell Grant by indexing the maximum award to the Consumer Price Index.
The group, also led by Mike McPherson, president of the research grant-making organization Spencer Foundation, was commissioned to design a federal financial aid system that increases enrollment and college completion rates for low- and moderate-income students.
Eliminating the FAFSA form is necessary, Baum said, because the complex nature of applying for financial aid is interfering with the effectiveness of the student aid system. “We want the system to be simpler for students, institutions and the government,” Baum said.
Currently, most institutions rely on the federal computation of an expected family contribution (EFC) as the basis for allocating their student aid, but the study revealed that by diminishing the bureaucratic hurdles of the process, those aspiring to improve their prospects through higher education have a better chance.
Instead of the form, Baum and team suggest institutions retrieve the financial data required for Pell Grant allocation from the Internal Revenue Service. Eligibility criteria for Pell Grants should be based only on Adjusted Gross Income and family size.
