Tuesday, December 12, 2006

Simplifying FASFA: An Idea

By Richard Vedder

One of the advantages of teaching forever is that as senility sets in, your former students, now brighter than you are, come to the rescue. Brian Fruchey is one such student, a fellow who has aided CCAP in numerous ways, including establishing our initial web site. Brian's work (his day job) involves interaction with student financial aid issues, and he has superb ideas on how to simplify the FAFSA without sacrificing needed information.

Brian points out to me that the overwhelming majority of information on the FAFSA form is already reported to the Internal Revenue Service. Unfortunately, under current law, it is illegal for the IRS to share information with other government agencies, like the U.S. Department of Education. What if there was a little box on the 1040 Form, similar to the box asking whether you want to devote money to presidential campaigns, allowing a person to permit the IRS to give data to the Department of Education for college financial aid purposes? The IRS could report the data to the Education Department and the information could be electronically entered into a FAFSA form. Or, have a short FAFSA form for those who check a box on that form allowing IRS to provide the Department of Education with income tax data (a copy of the form would be sent electronically to IRS). To be sure, there are a few things that require information, such as the number of students in a family attending college, and possibly some financial asset questions. I am already uneasy, however, about those financial asset questions (which are of secondary importance in determining aid) since they are used to "tax" those who have prudently saved for college as opposed to those who have spent irresponsibly and not saved at all. I suspect the national savings rate has been reduced by our current financial aid policies.

The FAFSA form could be reduced to a postcard, with just a few questions about family members attending college. A significant "access" obstacle would be removed. No privacy would be violated, as the information in question is already provided by individuals, and permission is required before the information is released.


Anonymous said...

Ah... Senility huh?

God, grant me the Senility to forget the people I never liked anyway, the good fortune to run into the ones that I do, and the eyesight to tell the difference.

I think this idea of using data from a tax return for FAFSA needs a little more thinking - at least for me. The reason I'm leaning that way is because I don't believe it's a lot of effort to do on my own. I can pull my own return and transcribe the numbers I should think. I am just so wary of the government beauracracy floating my tax returns and mucking it up.

However, at least someone is thinking and developing ideas for improvement which is a good thing and should be further encouraged.

Poly Muthumbi said...

After learning about the FAFSA financial aid program and realizing just how helpful it can be for your future, you need to go for it. At least there must be a way to take you to the actual process. You do this by filling up a FAFSA (Free Application for Federal Student Aid) form that requires you to fill in all important and detailed information supposed to determine your eligibility for financial aid.

Poly Muthumbi is a Web Administrator and Has Been Researching and Reporting on Student Loan Consolidation for Years. For More Information on FAFSA form, Visit Her Site at FAFSA FORM

Poly Muthumbi said...

FAFSA FINANCIAL AID could be an important step one can take for college education. As long as one has taken the initiative and on time, it is no big deal. You will be assured of it.