Next year, my daughter is starting college. Consequently, a few weeks ago, I had the experience of filling out financial aid forms. This is a topic that I think should be discussed in this forum, but I haven’t seen anything on it to date. I don’t know if I can make a coherent diary out of it, but maybe I can inspire someone to do a better job of it than I will do here.
The main thing that I came away with was the impression that a large part of the purpose of the financial aid application requirements was to give the impression that financial aid was available, but at the same time, making the process so onerous that many people, especially those with modest financial resources, would be discouraged from applying for it or unsuccessful in meeting the deadlines or getting acceptable documentation.
Let me start with a few basic comments about the process.
The main instrument for collecting financial data from students’ parents is the FAFSA, an online questionnaire on a U.S. government-run web page. The FAFSA requires information from the previous year’s tax returns, and some universities require that the information be supplied by dates as early as February 15. (Different universities have different deadlines; March 1 is a fairly common deadline.) I personally did not receive the W-2s and other information that I needed to do my taxes in time to meet the earliest deadline, and I suspect that many other parents had the same problem. Because I could not meet the deadline and barely made the March 1 deadline, my daughter was excluded from being considered for significant financial aid at some institutions.
The FAFSA is also complex in the way that the 1040 is complex, and that complexity could certainly discourage some parents. I have heard that some well-to-do families hire people for around $1000 to handle the application process for them, and they almost always get significant financial aid for their children. People who do not have $1000 to spend on the process are much less likely to receive financial aid.
Several institutions where my daughter applied also had other requirements, such as the CSS/Financial Aid Profile, which is administered by the College Board. That form requires additional information that is intrusive, and I found it difficult to find the answers to some of the questions, some of which seemed to require advanced knowledge of accounting or tax law. Moreover, there is a basic cost of $9, plus $16 per school to which the information is sent. This cost adds to the cost of applying for college, and it undoubtedly limits the possibility that the people who need it most will apply for and receive financial aid.
A few institutions also had other requirements that were unnecessarily burdensome. For example, one university required that all supporting documents for financial aid be submitted as a single pdf file. The requirement seems to imply that applicants must have access to a scanner, a computer, and software that can produce pdf files. Some schools allow documents to be sent by fax, and again, not everyone has easy access to a fax machine.
One fairly common requirement is to submit complete signed tax returns, including schedules and W-2 forms. Besides requiring documents that one might not have prepared so early and adding significantly to the volume of materials that must be submitted (and in my case, mailed), this also raises the issue of privacy. I felt very uncomfortable sending detailed information about my income and finances to several different universities, including some where my daughter will never study.
The ideal solution would be to eliminate the financial aid application process altogether. Make college free to everyone who is admitted, or make interest-free government loans available to anyone for paying college costs, with loans paid off along with income taxes (some variant of the system in Australia or Oregon).
Needless to say, that ideal solution is unlikely to be implemented soon. In the meantime, the current system is generally unpleasant and burdensome, but some universities and colleges have much more unreasonable requirements than others. I would like to call for a boycott of all institutions that require the CSS/Financial Aid Profile or copies of income tax returns or W-2 forms. The FAFSA is more than enough.
If institutions need more information, they should make suggestions to change the FAFSA. If they think that people have misrepresented their financial circumstances on the FAFSA, there should be a provision for the FAFSA to check submitted information against the tax returns that people submit in April to confirm the accuracy of the figures on the FAFSA. (The FAFSA can already check information against tax returns, but an early application deadline limits the utility of that capability.)
Working through the FAFSA framework could have the effect of reducing to some extent the amount of personal financial information that winds up in college financial aid offices. For example, it would be easy to prevent the FAFSA web page from sending parents’ social security numbers to schools.
The FAFSA form is also excessively complex, and there ought to be a movement to simplify it, or simply to allow parents to permit universities to access selected information from the parents’ tax returns.
This system has gotten out of control, and it is unfair to people with very limited financial resources. We need to make it known that the current system is unreasonable and unacceptable. Before students apply for college, they should see what the requirements are for financial aid. They should not apply to any school with burdensome requirements like submitting the CSS/Financial Aid Profile, copies of income tax returns, or copies of W-2s. I urge students to join a boycott even if the price of a CSS Profile is not excessive for them. I hope that if there is a significant reduction in the number of students applying to those schools, it will lead their financial aid offices to rethink their application procedures.
It would be nice, too, if politicians got involved.