One and Done: A Proposal for a One-Time FAFSA
Millions of community college students leave grant money on the table because they don’t complete the Free Application for Federal Student Aid (FAFSA). A new paper from the Center for American Progress shows that a one-time FAFSA policy could reduce students’ burden completing the FAFSA and help them better access financial aid.
Every year, millions of community college students leave grant money on the table because they don’t complete the Free Application for Federal Student Aid. Better known as the FAFSA, this form provides access to more than $122 billion in federal financing for college annually, including nearly $30 billion in Pell Grants. And students don’t complete the FAFSA for a variety of reasons – some may not have the necessary income information, may not know that the form exists, or may assume they’re not eligible for aid. But students also fail to complete the form because the process itself is just too complex.
There have been several proposals over the last decade to simplify the FAFSA, but those have only addressed the length of the form, not the frequency with which students must complete it. But what if students only filed once, when they first enrolled in college? In a new paper from the Center for American Progress (CAP), with support from ACCT, I propose a one-time FAFSA and show that having students complete the form only once is indeed possible.
The report details how much students’ expected family contributions (EFCs) change while they are enrolled, using data from 27 colleges across the U.S. Half of all students who applied for financial aid experienced a change of $500 or less change to their EFC, which equates to almost no change in their aid eligibility. And aid is even more stable for low-income students, with 70 percent of Pell Grant recipients experiencing an EFC change of $500 or less.
The FAFSA Burden
The FAFSA has over 100 questions that are intended to measure a student’s (or their family’s) ability to pay for college. When the form is complete, the information it contains is used to generate EFC, the figure that determines a student’s eligibility for need-based aid. With a low enough EFC, students are eligible for more than $6,000 each year in a Pell Grant if they enroll full-time. But that’s not all: the EFC is often used to determine a student’s eligibility for state, institutional, and outside grant aid, opening the door to thousands of dollars that students can use to pay their way through college.
But there are lots of obstacles that can stand in the way of a student receiving consistent aid from year to year. Two stand out as the most pervasive:
1. Verification - Roughly half of all Pell Grant recipients are selected for verification each year, a process that requires them to submit additional information verifying that their FAFSA entries are correct. By one estimate, a quarter of Pell-eligible students don’t receive any federal aid because they fail to complete the verification process.
2. Annual FAFSA renewal - Federal law requires students complete the FAFSA annually, which opens them up to struggling to wrangle all the information they need, missing deadlines, and going through the seemingly endless verification process. At a minimum, FAFSA renewal leads to frustration, and at worst, it causes a student to drop out because they lose access to the aid they received the year before.
Low-Income Students Stand to Benefit from a One-Time FAFSA
Students with $0 EFCs—those who have the most financial need and receive the largest Pell Grants—have the most to gain from a one-time FAFSA. Forty-three percent of students in the CAP study had a $0 EFC when they first enrolled, and almost 90 percent experienced little to no appreciable change in their EFC for the entirety of their enrollment. These data show that requiring students who have a $0 EFC to refile each year is a fool’s errand, with a lot of resources being expended to produce the same result.
In fact, the students most likely to see a significant change in EFC started college with an EFC too high to qualify for need-based federal aid. For them, the FAFSA is capturing changes that have no bearing on their awards and are thus, frankly, a waste of time. So even though some students may experience more substantial EFC changes, the bottom line is that a one-time FAFSA not only works for low-income students, but for higher-income ones as well.
A one-time FAFSA policy would also remove the burden of verification for continuing students and guarantee they receive stable aid from year to year. Those who do experience a change in their family’s composition or income could re-file the form to get a new EFC. It would also free up a lot of resources in financial aid offices. Instead of spending countless hours on FAFSA processing and verification, financial aid administrators could instead spend more time counseling students on the aid they receive.
The idea of a one-time FAFSA has been batted around in Washington for some time, but this report is the first to show that it is, in fact, feasible. And there’s appetite on Capitol Hill for the idea. In their Aim Higher bill to reauthorize the Higher Education Act, House Democrats included a one-time FAFSA proposal, but limited it to traditionally-aged Pell Grant recipients. Fortunately, this report shows that the policy has even more merit for adult students, whose EFCs change very little while enrolled.
While it will likely take time to make this policy a reality, the federal government can act right now to move toward a one-time FAFSA. The Office of Federal Student Aid (FSA), which administers the FAFSA, could implement an experimental site on the policy. This would allow a subset of colleges to pursue a one-time FAFSA model with FSA measuring the policy’s efficacy in improving retention. FSA could also greatly simplify the FAFSA renewal process, requiring students to answer just a few questions to verify their circumstances are similar to the previous year instead of having them complete a whole new form.
Community colleges have a lot to gain from a one-time FAFSA. With a simpler aid application process and guarantee of consistent aid, students could instead focus on getting through their program of study. In addition to potentially improving retention and completion rates, a one-time FAFSA would also reduce operational costs in financial aid offices and allow community colleges to focus on what they do best – serving their students.
Colleen Campbell is the Associate Director for Postseconday Education at the Center for American Progress. She can be reached at email@example.com.