Federal Relations

Department of Education Revamps Student Aid Application Process

**The following press release was made available by the Department of Education on June 24th**

The Obama Administration today announced a shorter, simpler, and more user friendly Free Application for Federal Student Aid (FAFSA) that will make it easier to apply for college financial aid. The changes—some of which are already in place while others will be phased in over the next few months—are designed to increase postsecondary enrollment, particularly among low- and middle-income students.

“President Obama has challenged the nation to once again have the highest percentage of college graduates in the world,” said Arne Duncan, U.S. Secretary of Education. “To do that, we need to make the college-going process easier and more convenient, and to send a clear message to young people as well as adults that college is within their reach. Simplifying the financial aid process is an important step toward reaching that goal.”

At his first White House press corps briefing, Secretary Duncan outlined the Administration’s plan for streamlining the FAFSA.

  • Since May 2009, the Education Department has provided instant estimates of Pell Grant and student loan eligibility, rather than forcing applicants to wait weeks. Links to graduation rates and other college information are also provided;
  • Available summer 2009, enhanced skip-logic used in the new web-based FAFSA will reduce user navigation for many applicants by more than half;
  • Starting in January 2010, students applying for financial aid for the spring semester will be able to seamlessly retrieve their relevant tax information from the IRS for easy completion of the online FAFSA. The Department of Education and the IRS will be working together to examine the possibility of expanding this option to all students in the future.
  • The Administration will also introduce legislation seeking statutory authority from Congress to eliminate financial information from the aid calculation formula that is not available from the Internal Revenue Service (IRS). This will remove 26 financial questions from the FAFSA form that have little impact on aid awards and can be difficult to complete. Only questions that rely upon information that applicants must already provide to the IRS would remain.

The simplified FAFSA is one of several recent steps taken by the Obama Administration to improve access to higher education and make it more affordable. Highlights of the Obama Administration’s Agenda for College Affordability include:

  • Expanding Pell Grants and College Tax Credits: The Recovery Act increased Pell Grants by $500 to $5,350 for 2009-2010 and created the American Opportunity Tax Credit, a new $2,500 tax credit for four years of college tuition. The President’s 2010 Budget proposal would make these policies permanent and ensure the Pell Grant continues to grow steadily by making it an entitlement. Together, they provide approximately $200 billion in college scholarships and tax credits over the next decade.
  • Modernizing and Expanding the Perkins Loan Program: The President’s 2010 Budget proposes to make this vital program available to over 2,600 additional schools and an estimated 2.7 million additional students each year. By providing an additional $5 billion in Perkins Loans and continuing the low five percent interest rate, President Obama hopes that the neediest of students will have access to federal financial resources they did not have before.
  • Creating a New College Access and Completion Fund: In his 2010 budget proposal, President Obama proposes a five-year, $2.5 billion fund to build federal-state-local partnerships aimed at improving college access and completion, particularly for students from disadvantaged backgrounds. These funds would be used to evaluate programs aimed at increasing college enrollment and graduation, and to grow and bring to scale programs that are proven to be successful.
  • To help families in special circumstances during these challenging economic times, the Department sent a letter in early April to financial aid administrators reminding them of their authority to make adjustments, on a case-by-case basis, to address circumstances, such as unemployment, not reflected on the original application.

“Simplifying the FAFSA is another significant action in our quest to keep a college degree within the reach of every person who aspires to higher education,” Duncan said.

More information on federal financial aid for college is available at http://studentaid.ed.gov.