# Presentation: 023891

## Special Study of Simplification of Need Analysis and Application for Title IV Aid

**Advisory Committee on Student Financial Assistance**
- www.ed.gov/ACSFA
*Brian Fitzgerald*

## Agenda

**Simplification Study Background**
**The Charge from Congress**
**Study Approach and Consultation Process**
**Interim Legislative Recommendations**
**Simplification Study Next Steps**

## Executive Summary

**Recommendations will simplify the financial aid application process for all students. **
**Recommendations will **_***significantly***_** simplify the process for low- and moderate-income students.**
**Simplification and information, while important, are not enough to solve the access problem.**

## The Access Crisis

***Empty Promises *****(June 2002): access crisis for low- and moderate-income, college-qualified high school graduates over the next decade.**
_***4.4 million students***_*** will not enroll in a four-year college within two years of graduation.***
_***2 million students***_*** will not attend any college at all.***

## The Access Crisis 	Over the Next Decade

## The Role of Simplification in Access

**High unmet need and the student work penalty are the biggest barriers for college-qualified, low-income students.**
**An overly burdensome and complex financial aid application process also serves as a barrier to low-income students.**

## Simplification Study:  Background

**The Advisory Committee’s 2003 Reauthorization recommendations included:**
*Provide students with**** ***_***early assurances of adequate grant aid***_*** ****through strengthened**** ***_***federal-state-institutional partnerships***_***.***
*Simplify the financial aid application process.*

## Simplification Study:  Background

**Broad congressional support for simplification.**
**Financial Aid Simplification Act (H.R. 2956) introduced by Rep. Howard P. “Buck” McKeon (R-CA) in July 2003:**
-  Included the *Special Study of Simplification of Need Analysis and Application for Title IV Aid *– the Simplification Study.

## The Consolidated Appropriations Act 	of 2004 (H.R. 2673) 

**Signed into law on January 23, 2004.**
**Includes the current version of the Simplification Study:**
* **Directs the Advisory Committee to submit interim legislative recommendations in six months.*
* **Final set of recommendations to be submitted within one year from date of enactment.*

## Advisory Committee’s 	Charge from Congress

**Primary Objectives:**
***Reduce application burden and complexity.***
***Address two key problems in need analysis.***
***Abide by certain constraints.***

## Advisory Committee’s 	Charge from Congress

**Examine ways to reduce application burden and complexity:**
*Using participation in federal means-tested programs to qualify for the SNT.*
*Tailoring the form to students’ circumstances.*
*Providing students with an estimate of their eligibility for various types of aid.*
*Streamlining the timing of the application process.*
*Reducing the number of data elements.*

## Advisory Committee’s 	Charge from Congress

**Identify ways to simplify need analysis and address two key problems:**
***The student work penalty.***
***The current process for updating the state and local tax allowance.***

## Constraints from Congress

**Focus on the needs of low- and moderate-income students.**
**Identify and assess any potential adverse effects on:**
***Federal program costs***
***Program integrity***
***Delivery system***
***Distribution of Pell Grants***
**Consult broadly with stakeholders in higher education.**

## Simplification Goals

**Implement a paperless application and delivery system.**
**Minimize burden by tailoring the requirements of the application and other processes to individual students.**
**Address key problems identified by Congress.**
**Maintain the current federal-state-institutional partnership in aid delivery.**

## Advisory Committee’s 		Study Approach

**Exhaustive review of opportunities for simplification:**
*** ******Comprehensive literature review***
*** ******Review of reauthorization proposals***
**Extensive community consultation.**
**Analyses conducted by ED using the Pell Grant Cost Estimation Model.**
**Rigorous analysis of simplification options.**

## Advisory Committee’s 	Community Consultation

**Three public hearings.**
**Public request for comment.**
**Focus groups and site visits.**
**Individual interviews and consultations.**
**Consulted a variety of stakeholders in higher education.**

## Advisory Committee Members’	Constraints and Considerations

**Identify recommendations that:**
*Minimize adverse effects on program costs, integrity, delivery, and distribution.*
*Avoid significant redistribution of federal aid.*
*Maintain and enhance the federal-state-institutional partnership in the current delivery system.*
*Have broad community support.*

## Simplification Study     	Recommendations

**Expand the automatic zero EFC (auto-zero) income threshold from $15,000 to $25,000.**
**Adjust the auto-zero income threshold annually using the Consumer Price Index.**

## Simplification Study 	Recommendations

**Expand and streamline the Simplified Needs Test (SNT).**
**Implement a simplified, paper EZ FAFSA for low-income students.**

## Simplification Study 	Recommendations

**Phase out the current complex paper form.**
**Reduce the number of data elements required in FAFSA on the Web. **

## Simplification Study 	Recommendations

**Expand and integrate the use of appropriate technology.**
**Implement a comprehensive system of early awareness of financial aid information.**

## Simplification Study 	Recommendations

**Allow students to apply for financial aid earlier.**
**Reduce application complexity by eliminating data elements and questions wherever possible.**

## Simplification Study 	Recommendations

**Eliminate the drug conviction and Selective Service registration questions.**
**Reduce the work penalty:**
* **Increase the IPA by $1,000.*
* **Lower the assessment rate to 40 percent. *

## Simplification Study 	Recommendations

**Eliminate the unfairness associated with updates to the state and local tax allowance:**
* **Eliminate the allowance and raise the IPA as long as funds are available to hold the maximum number of students harmless. *

## Simplification Study Next Steps

**Develop a final set of recommendations related to a variety of issues, such as:**
*Implementing a comprehensive system of early awareness.*
*Enabling students to apply earlier.*
*Implementing a paper EZ FAFSA for low-income students.*
*Simplifying the verification process.*
*Simplifying the application process for students from non-traditional families.*

## Questions and Answers 

***The Special Study of***
***Simplification of Need Analysis***
***and Application for Title IV Aid***