The Magic Trick That Could Help Students Pay For College

Mar 4, 2015
Originally published on March 4, 2015 7:29 pm

Read part one of our reporting on the FAFSA, "Shrink The FAFSA? Good Luck With That"

It's deadline time for the Free Application for Federal Student Aid. Better known as the FAFSA.

The daunting application — with its 108 questions — stands between many college hopefuls and much-needed financial aid.

One recent study found that some 2 million students who would qualify for federal Pell Grants don't even fill out the form.

These days, lots of politicians are talking about shrinking the FAFSA. One bipartisan group of senators has proposed a form with just two questions:

"What is your family size? And, what was your household income two years ago?"

That raises the most important question: Is that even possible?

"The answer is 'No, it's not possible,' " says Justin Draeger of the National Association of Student Financial Aid Administrators. "The more you simplify the federal form, the more everybody tends to look needy."

And that's a problem for lots of states and schools, as we explored earlier.

So let's set aside the postcard idea for now.

The Obama administration has tried lots of other creative ideas to make the FAFSA easier to fill out online. Technology now weeds out questions that don't apply to you. The president also wants to cut some questions.

And then there's this potential game-changer: a new IRS data retrieval tool.

Press a button, and the IRS fills out much of the form for you, because there's lots of overlap between what it wants to know at tax time and what the FAFSA requires. There's just one problem:

The aid form asks for last year's tax data (so, 2014). But to meet state and school aid deadlines, most students have to fill it out before they — or their parents — have done their taxes.

"And so that tool that makes it very easy to fill out the FAFSA, it's not useable by a lot of students," says Rachel Fishman, who studies education policy for the New America Foundation.

Believe it or not, though, this fix has a fix. It's called "prior-prior year."

Terrible name. Simple idea.

Instead of requiring last year's tax data, require the prior-prior year (so, 2013). In that case, just about everyone who fills out a FAFSA could use the tool.

Presto! It reduces the number of questions students answer without reducing the number of questions. It's an honest-to-goodness magic trick, courtesy of the IRS.

And it gets more magical. A switch to prior-prior could also move back the entire aid-application process:

"Maybe even back to May 1st," says Dan Madzelan with the American Council on Education, "when they're applying to college or making decisions about what college to attend."

In short: We would no longer be asking students to apply to college months before they know whether they can afford it. And research shows that, when students know how much college will actually cost them, they're more likely to go.

Here's the strange part: The Department of Education already has the authority to start using prior-prior. So, why hasn't it?

One big reason: money.

The department says switching to prior-prior would come with a lot of costs. For one thing, using older income would make students seem a little needier.

It would also increase the number of students who complete the FAFSA and thereby increase the amount of aid given.

And these costs, the department says, would ultimately have to be approved by Congress.

Translation: One reason Washington's not yet using prior-prior is because it would work.

Copyright 2017 NPR. To see more, visit http://www.npr.org/.

MELISSA BLOCK, HOST:

It's deadline time for FAFSA - that's the Free Application for Federal Student Aid. The daunting form with more than 100 questions can stand between college hopefuls and much needed financial help. One recent study found some 2 million students who would qualify for a federal Pell Grant don't fill it out. On Morning Edition today, NPR's Cory Turner explained why the form is so long. Now, he tells us about ideas to shorten it.

CORY TURNER, BYLINE: A bipartisan group of senators has proposed shrinking the FAFSA down to a postcard. To convey to you what a feat that would be, here's a taste of the current form.

UNIDENTIFIED WOMAN #1: As of today, what is the marital status of your legal parents?

UNIDENTIFIED MAN #1: Are you a U.S. citizen?

UNIDENTIFIED WOMAN #2: Have you been convicted for the possession or sale of illegal drugs...

(CROSSTALK)

TURNER: And this is the proposed postcard FAFSA.

UNIDENTIFIED MAN #2: What was your adjusted gross income? How many people are in your parents' household?

TURNER: That's it. Now, the most important question - is it possible?

JUSTIN DRAEGER: The answer is no, it's not possible.

TURNER: Justin Draeger runs the National Association of Student Financial Aid Administrators.

DRAEGER: The more you simplify the federal form, the more everybody looks needy.

TURNER: So let's set aside the postcard idea for now. The Obama administration has tried lots of other things to make the FAFSA easier to fill out online, and it is. Technology now weeds out questions that don't apply to you. The president also wants to cut some questions. And then there's this, says Rachel Fishman, who studies education policy for the New America Foundation.

RACHEL FISHMAN: There's a new IRS data retrieval tool where parents and students can log on to the IRS through FAFSA and it will pre-populate much of the form.

TURNER: And that, ladies and gentlemen, is a big deal.

FISHMAN: It will pre-populate much of the form.

TURNER: Press a button and the IRS does much of the work for you because there's lots of overlap between what it wants to know at tax time and what the FAFSA requires. There's just one problem - the aid form asks for last year's tax data - so 2014 - but most students have to fill it out before they or their parents have done their taxes. Again, Rachel Fishman.

FISHMAN: And so that tool that makes it very easy to fill out the FAFSA, it's not usable by a lot of students.

TURNER: But believe it or not, this fix has a fix.

FISHMAN: Prior-prior year.

UNIDENTIFIED MAN #3: Prior-prior year.

UNIDENTIFIED MAN #4: Prior-prior year.

TURNER: Terrible name, simple idea. Instead of requiring last year's tax data, require the prior-prior year - so 2013. In that case, just about everyone who fills out a FAFSA could use the tool. Presto, it reduces the number of questions students answer without reducing the number of questions. It is an honest-to-goodness magic trick, courtesy of the IRS. And it gets more magical - a switch to prior-prior could also move back the entire aid-application process.

DAN MADZELAN: December 1, November 1, October 1.

TURNER: Dan Madzelan with the American Council on Education is a fan of prior-prior.

MADZELAN: Maybe even back to May 1, when they're applying to college or making decisions about what college they're going to attend.

TURNER: We'd no longer be asking students to apply to college months before they know if they can afford it. Of all the FAFSA experts I spoke with, some like the postcard idea, some don't, but they all like prior-prior. And here's the strange part - the Education Department already has the authority to start using it.

So why hasn't it? Well, one big reason - money. The department says switching to prior-prior would come with a lot of costs. Using older income would make students seem a little needier. It would also increase the number of students who complete the FAFSA and thereby increase the amount of aid given. Who would pay for it? Well, these costs, the department says, would ultimately have to be approved by Congress. Translation - one reason Washington's not yet using prior-prior is because it would work. Cory Turner, NPR News, Washington.

BLOCK: And if you missed Cory's story this morning about the history of FAFSA, you can find it at npr.org/ed. Transcript provided by NPR, Copyright NPR.