Gates Takes Aim at Complicated Financial Aid Process

In this era of instant credit checks, you would think that applying for federal financial aid for college would be a fairly quick and straightforward process. But as millions of high school seniors and their parents learn each year, it is neither quick nor straightforward. Rather, it requires future college students and their parents to wade through a lengthy application that consists of more than 100 questions, requires the most recent tax return, and takes more than an hour to complete.

The time and complexity of the Free Application for Federal Student Aid, or FAFSA, has acted as a disincentive for many students to apply for financial aid, which is all but necessary to handle the high cost of a college education. According to a report by Edvisors, about 2 million students who would have been eligible for federal Pell Grants did not apply for any financial aid. More than 20 percent of those students said they either did not know how to apply or that the FAFSA was too complicated.

Many experts are concerned that the time and red tape associated with applying for financial aid may discourage many low-income students from seeking the assistance. A growing number of voices — in philanthropy, academia, and even Capitol Hill — are calling for action to streamline the financial aid qualification process. The Bill and Melinda Gates Foundation recently added its large megaphone to this chorus. The funder reported that simplifying the FAFSA would open college doors to 2 million more students without compromising the accuracy of the information being collected, according to an ABC News report.

According to ABC, Gates is asking for three major changes:

  • Eliminate most of the complex questions on the FAFSA, which apply to only a small percentage of applicants;
  • Allow a direct link to IRS data to automatically complete the form;
  • Allow students to use tax information from two years ago so they do not have to wait until their parents start the current year's tax return to complete the application.

U.S. Department of Education officials and some congressional leaders endorse the idea of simplifying the FAFSA — an encouraging sign when so much of what happens on Capitol Hill seems to involve maneuvers by congressional Republicans to derail initiatives from the Obama White House. Republican Sen. Lamar Alexander of Tennessee, who served as U.S. education secretary under President George H.W. Bush, wants to slash the number of questions on the FAFSA from over 100 to just two: family size and parents' household income from two years ago.

The push to reform financial aid is not a new step for Gates, which has taken aim at the process as a key strategy in its Postsecondary Success program, but it is one of the most public pronouncements the world's largest philanthropic foundation has made on the subject. In the last few years, Gates has been compiling ammunition to support its push for FAFSA reform. In 2012, the funder awarded grants to multiple organizations, including the New America Foundation, the Alliance for Excellent Education, the National College Access Network, and the Institute for Higher Education Policy, to fund whitepapers and advocacy around FAFSA reforms.

With college costs soaring and higher education a requirement for most of the jobs being created in today's economy, a simpler process to apply for federal financial aid is essential. Let's hope Gates and other players can move the effort forward.