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THE SECRETARY OF EDUCATIONWASHINGTON, DC 20202

January 16, 2009

Honorable Edward M. KennedyChairmanCommittee on Health, Education, Labor,and PensionsUnited States SenateWashington, DC 20510

Dear Mr. Chairman:

I am providing you with the U.S. Department of Education's report regarding simplification of the federal student aid process and the Free Application for Federal Student Aid (FAFSA) as required by section 483(0(2) of the Higher Education Act HEA), as amended by the Higher Education Opportunity Act (HEOA).

The complexities of the federal student aid process have been well documented and discussed over time. Many options to simplification exist, and additional time would be necessary to fully review all of those options. For the past two years, the Department has consulted with various outside sources, including financial aid officers, economists, and higher education researchers, to examine ways to simplify the federal financial aid system. This report focuses on the outcome of those consultations -- the sample FAFSA form I unveiled in October of 2008, which uses adjusted gross income and number of taxexemptions as eligibility criteria for receipt of federal aid. The use of these two items is simple, easily understood, and verifiable, and it would constitute one approach to rationalizing federal student aid.

This new approach would open doors for many students who are unable to dream of continuing their education beyond high school. It would also allow students and families to concentrate more on academic preparation and planning and less on forms and paperwork. As my bipartisan Commission on the Future of Higher Education found in its report (*A Test of Leadership - Charting the Future of U. S. Higher Education*), the current federal financial aid system "is confusing, complex, inefficient, duplicative, and frequently does not direct aid to students who truly need it." We know that this red tape is one hurdle to the 40 percent of college students, nearly eight million, who never even apply for federal aid, even though most of them would be eligible for assistance. The sample FAFSA form outlined in the attached report would help remove one of the barriers facing these students as they undertake the challenges of postsecondary   education.

Simplification of the student aid process, both its eligibility formula and its application form, has long been a priority for me. I applaud your commitment to seeking a simple, efficient, and effective means for students who wish to pursue a postsecondary education to apply for and receive financial aid. As I prepare to leave office, this report continues the dialogue we have had and will hopefully help to create a student aid system that informs students and families about available financial aid early and that paves the way to postsecondary education, rather than stands in the way. But it will take action on the part of Congress to achieve the goal of real reform and simplification of the financial aid process and application form. The approach outlined in the Department's report cannot be implemented without changes to the HEA.

I urge Congress to work with the new Administration and career staff at the Department to develop a federal student aid system that is clear, relevant, and straightforward, and, at the same time, meets the intent of the programs and protects taxpayers' interests. Department staff is available to brief you and your staff on the specifics of the information contained within this report and to work with you in the implementation of a process that achieves our shared goals.

Sincerely,

/s/

Margaret Spellings

Enclosure

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