fafsa simplification easy as 1, 2, 3
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FAFSA SIMPLIFICATION Easy As 1, 2, 3. Gloria T. Green Director, Financial Aid Services May 2010. Session Overview. Historical Background Easy As 1. Student Perspective 2. Institutional Perspective 3. Aid Administrator’s Perspective Future of Simplification. - PowerPoint PPT PresentationTRANSCRIPT
Gloria T. GreenDirector, Financial Aid Services
May 2010
FAFSA SIMPLIFICATIONEasy As 1, 2, 3
Session Overview
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Historical BackgroundEasy As
1. Student Perspective 2. Institutional Perspective 3. Aid Administrator’s Perspective
Future of Simplification
Historical Background
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The “Advisory Committee on Student Financial Assistance” issued a mandated simplification study in January 2005 entitled
“The Student Aid Gauntlet” Includes ten recommendations:
Create a system of early financial aid informationMake federal need analysis transparent, consistent & fairExpand existing simplification to more studentsAllow all students to apply for financial aid earlierMake the FAFSA relevant and understandable
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Historical Background
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“The Student Aid Gauntlet” (cont’d)
Create a simpler paper form for low-income studentsPhase out the full paper form and increase the use of technology Simplify and streamline FAFSA on the WebSimplify the verification processCreate a national partnership to make access simple and certain
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Historical Background“The entire financial aid system – including federal,
state, institutional, and private programs – is confusing, complex, inefficient, duplicative, and frequently does not direct aid to students who truly need it.”
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“A Test of Leadership”Issued by the Commission on the Future of Higher EducationReleased on September 26, 2006
Historical Background
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Higher Education Reconciliation Act of 2005 (HERA) Federal means – tested benefit program as an
alternative to a tax returnSupplemental Security Income (SSI)Food stampsFree or reduced price lunch Temporary Assistance for Needy Families (TANF)Special Supplemental Nutrition Program for Women, Infants and
Children (WIC)
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Historical Background
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The College Cost Reduction and Access Act (CCRAA) 2009-2010 Need Analysis excludes the following
sources of untaxed income:Welfare paymentsEarned income creditSpecial fuel tax credit Foreign incomeUntaxed social security benefits
Historical Background
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Higher Education Opportunity Act of 2008 (HEOA)Required Government Accountability Office to issue a
report on efforts to simplify the FAFSA“Highlights of a Study Group on Simplifying the Free Application for Federal Student Aid” October 2009 Expert panel participants said:
Using federal income tax data and revising the FAFSA could reduce applicants’ burden
Changes to the design and contents of the form could streamline the application
Reducing the financial information required by the need analysis formula could ease the applicants’ burden, but some aid redistribution is likely
Technology and public outreach are central to implementing changes
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Historical Background
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Health Care and Education Reconciliation Act of 2010 (HCERA)
Provisions of the Student Aid and Fiscal Responsibility Act of 2009 (SAFRA) were included as a rider to HCERADirect LendingIncreases the Pell GrantExpanded income based repaymentLoan forgiveness after 20 yearsCollege Access Challenge Grant Program
Historical Background
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Provisions in SAFRA not included in HCERA
Changes to federal need analysis formula eliminating assets
The introduction of asset caps for Pell Grants and subsidized Stafford loans
The elimination of the Perkins Loan ProgramChanges to drug-related offenses and eligibility for
Federal Student Aid
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Impact of Simplification on Students
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New FAFSA Web Form with Enhanced Skip Logic Compared to Current Form
Source: Executive Office of the President. Council of Economic Advisors. “Simplifying Student Aid: The Case for an Easier, Faster, and More Accurate FAFSA.” September 2009
Student Perspective
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Enhanced skip logicSelective Service registrationDependency status questions for applicants over 24
years oldHomeless screening questionFirst –time college students will not be presented with
drug conviction questionIRS Data Share
VoluntaryTax filers
Student Perspective
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Pell Grant award estimate on Student Aid Report (SAR)
Potential loan eligibility on SARLink to College Navigator
Programs offeredTuition ratesRetention ratesGraduation rates Transfer rates
Graduate Students13
Institutional Perspective
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Federal expendituresPell shortfallLimits annual increases
State expendituresSome states impose earlier deadlines, reduce awards,
change eligibility standards Additional state specific questionsStatutory requirements
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Institutional Perspective
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Institutional packaging formulasReevaluate parametersIncreased loan offeringsIncrease in the number of loan programs
Institutional aid Unable to keep pace with demand
EFC changesEndowments affected by economic downturn
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Aid Administrator’s Perspective
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Individual students and familiesAll FAFSA filers benefitted from expanded use of
technology and fewer questionsMore families qualify for auto-zero EFC and SNT
Increased number of eligible applicants and their level of need
Increased the number of verification casesFunds managementEquity
Future Simplification
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IRS Data ShareExpected to begin with system start-up in January 2011
Within days of electronic tax filingWithin weeks of paper tax filing
Data retrieval process added to Corrections on the WebTax filing status to be added to data retrieval and transfer process
Spanish version Verification requirements
ISIR flags identify when income data obtained directly from IRS versus self-reported
Verification on Negotiated Rulemaking agenda17
Future Simplification
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Potential links from FAFSA On The Web (FOTW) to state and institutional websitesMay permit collection of state/institution specific data
Simple FAFSASavings and investment threshold
Statutory amendments required
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Discussion/Questions