The American financial aid system is notoriously complex and helps to perpetuate inequality, even as it attempts to help break the link between family finances and educational opportunities.
In 2015, the federal government introduced two different approaches to simplifying the system:
2. Simplifying the college pricing system via America’s College Promise, a free college model
The former initiative is receiving a great deal of attention and bipartisan support, while the latter is mainly popular among progressives and has been adapted/adopted by several states.
There are important differences in these simplification efforts that have been overlooked. These differences illustrate why FAFSA simplification is a technocratic fix with limited benefits, whereas America’s College Promise has the potential to be a real game-changer with widespread results.
Let’s compare and contrast the two:
FAFSA simplification is an effort to reduce the number of questions students are asked when applying for financial aid, and to ensure that some answers to those questions are provided by existing tax data, reducing the length of the application process. It promises to help students access college who already apply but are deterred by the form itself.
Research indicates that simplifying the FAFSA will increase college attendance rates by younger students who are already planning to attend college, and it will somewhat increase the amount of grant aid that they initially receive during their first year of college. It may increase the amount of aid they receive after that time — by helping them continue to receive the Pell Grant, for example — and may in turn improve persistence or graduation rates, but we don’t yet know much about that.
These are positive changes, to be sure. But in many important ways, FAFSA simplification is a minor policy change with major limitations:
- FAFSA simplification doesn’t eliminate means-testing — the process of sorting college students into the ‘deserving’ and ‘undeserving.’ Incredibly, it even asks “who’s your daddy?” Students left out of the financial aid system now because they aren’t “poor enough” still don’t get aid. And with the destruction of the middle-class, that population is rapidly growing. Undocumented students are entirely excluded.
2. FAFSA simplification does not substantially reduce the net price of college, even for the low-income students it focuses on helping. It invites students to fill out the form, acting as if once that’s done, college is affordable. But frequently that is nonsense. After FAFSA, the price people pay for college is incredibly high — over $8,000 per year at community colleges, and $12,000 per year at public universities. (Note: #FixFAFSA advocates never admit this, instead claiming college is already free for the poor.) Simplifying the form doesn’t improve political support for the Pell Grant, which is a voucher providing a too-small discount. It (and prior-prior-year) increases competition for the scarce resources of state and institutional aid. It doesn’t increase accountability for states or institutions whose behaviors drive up college prices. In other words, just because a student files a FAFSA doesn’t mean that there’s more money waiting for them — in fact, as more eligible students file, the fraction of students getting state and institutional grant aid will very likely shrink. So in many ways, simplifying the FAFSA may simply invite students to more debt.
3. FAFSA simplification doesn’t address the many barriers students face to keeping their financial aid. Two major issues remain. Students facing too-high net prices often have to work instead of enrolling full-time, thus reducing their aid eligibility. And, students still face complex Satisfactory Academic Progress standards they don’t even know about, which cause them to lose aid and face rising prices as they move through college.
4. FAFSA simplification won’t last. The current financial aid system is hardly a compact between the federal government, states, and institutions. Since those pieces aren’t bound together, one or more actors can violate the terms set by the other. If states and/or colleges introduce new forms or more questions, the FAFSA will once again grow in length.
Given all of these major limitations, it is notable that many prominent advocates of FAFSA simplification are so focused on this policy and not saying anything about its shortfalls and how to address them. I’m astonished by pitches for FAFSA simplification that make it sound like it’s some sort of silver bullet and do not stress the importance of actually making college affordable. You might call this incrementalism, but I think another (political) dynamic is at work: satisficing. Watch as Republicans, and some Democrats, claim #FixFafsa as victory and tell advocates for genuinely affordable college “Be thankful, you got what you asked for.” Voters, believing the rhetoric that college is now affordable, will do the same.
Now, let’s consider another approach to financial aid simplification — America’s College Promise. This policy takes a universal approach to higher education pricing that eliminates means-testing and aims to increase public investments in public higher education so as to make college much more affordable. It does this via a first-dollar scholarship program that eliminates upfront tuition and fees in the public sector and allows students who qualify to use existing financial aid to cover living expenses. Right now it’s a proposal, and it could be improved up0n. But it’s a very good start and a far bolder idea than the vast majority of higher education policy proposals.
Research on this specific approach is nonexistent because it’s never been tried on a broad scale. However, components of it have been evaluated at local and state levels. The Kalamazoo Promise increased rates of college enrollment and completion among students who would never have otherwise attended college. A simpler program in Texas achieved similar results.
This approach could upend the current financial aid system entirely. In contrast to FAFSA simplification it gets rid of the FAFSA. It brings together all American families, serving them with a unified system in which they are jointly invested. Yet at the same time, even as it provides benefits to all, it disproportionately assists low-income families. That is because education has heterogeneous returns. Low-income students are most affected by the failings of today’s financial aid system (especially high prices and complexity) and will be the most responsive to changes that reduce the price and the complexity. Moroever, while upper-middle-class people will also get educated by America’s College Promise, the personal and social returns to their education will pale in comparison to the returns accruing to low-income people (and especially undocumented students).
America’s College Promise substantially reduces the net price of college by eliminating tuition and fees entirely — about half of the current price. That price is reduced whether or not a student is enrolled full or part time. This will, in turn, reduce the shift in prices students face as they move through college.
Most critically, America’s College Promise brokers a new compact between governments, schools, and students. It is a similar approach to Social Security, in which all pay in and all benefit. Support for this effort, once it is put into place, is very likely to last. Accountability mechanisms for resource allocation are included to ensure continuation and quality.
Clearly, FAFSA simplification and America’s College Promise are dramatically different approaches with very likely drastically different benefits. One is a technocratic, and very likely temporary, fix. The other is the sort of fundamental change that students all of the country deserve. Isn’t it therefore remarkable (and telling) that 90% of the focus of higher education lobbyists, researchers, and foundations is on FAFSA simplification? Are we really about doing what’s easy, or about doing what’s needed? In 2016, let’s start playing the long game — it’s how the true reformers got free public high schools, changing the nation forever.