Amending the Higher Education Act of 1965: The need to simplify the financial aid application

The Federal Pell Grant program is the most important mechanism the federal government has for ensuring that lack of money does not prevent academically qualified, low-income citizens from entering and completing college. The Pell Grant is targeted specifically to students from the lowest-income families. According to the College Board, nearly all (88 percent) dependent students who receive Pell Grants have family incomes of no more than $50,000 and nearly all independent students without dependents have family incomes of no more than $30,000. Research consistently demonstrates that need-based grant aid — like the Pell Grant — promotes college enrollment and attainment, especially for students from low-income families.

The Pell Grant is one of the student financial aid programs authorized under Title IV of the Higher Education Act. Last amended in 2008, the Higher Education Act is once again under review.

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During this current reauthorization, Congress should act to simplify the process of applying for and receiving this essential need-based student financial assistance. A bill proposed by Sens. Lamar Alexander (R-Tenn.) and Michael Bennet (D-Colo.) offers an attractive approach to achieving this goal.

Currently, in order to receive federal financial aid, students must complete the Free Application for Federal Student Aid (FAFSA). With 108 questions, completing the form is a daunting, time-consuming task.

It is certainly important to ensure that federal financial aid is awarded to individuals who are truly financially needy. But research indicates that financial need can be accurately determined with far fewer questions than are currently asked. Moreover, the benefits of simplifying the FAFSA far exceed the costs of inappropriately awarding aid to the small share of individuals who will try to game a simplified system.

A simpler process will likely encourage more people who are eligible for a Federal Pell Grant to apply for and receive this important aid. Awarding aid based on just two pieces of information (adjusted gross income and family size, as proposed by Alexander and Bennet) would also dramatically improve the transparency of the federal financial aid system and, consequently, students' and families' knowledge of available aid. Research consistently documents that few students and families have accurate or complete information about college prices or financial aid.

Simplifying the federal financial aid application process is an important step toward helping prospective students and their families determine the amount of financial aid they can expect to receive early in the college-going process. Currently, students and their families do not learn how much financial aid (from the federal government and other sources) they are eligible to receive until after they have taken a number of other steps: They must first apply to and be accepted for admission to a college or university, apply for student financial aid and receive a financial aid award letter from the admitting institutions. With a better understanding of the federal financial resources available to pay for college early in the educational pipeline, some individuals will make choices that enhance their likelihood of college attainment — such as aspiring to attend college and enrolling in the academically rigorous coursework in high school that will help to promote their college success.

Many changes and improvements are required in order to increase the educational attainment of the nation's population and reduce the gaps in attainment that persist based on family income and other demographic characteristics. Streamlining the Pell Grant application process is an important step in the right direction.

Perna is the executive director of the Alliance for Higher Education and Democracy, a professor at the Graduate School of Education at the University of Pennsylvania and coauthor, with Joni Finney, of The Attainment Agenda: State Policy Leadership for Higher Education.

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