‘Sooner, simpler, smarter’ college aid

In Sooner, Simpler, Smarter, the National College Access Network calls for simplifying federal financial aid, reports Clare McCann, a New America Foundation policy analyst, on Ed Central. Ideas include notifying families with young children about college aid eligibility and using tax returns, instead of FAFSA, to calculate Pell Grant eligibility.

“There is near unanimity on the fact that the financial aid ‘system’ is layered with inconsistencies, redundancies, and overlapping federal programs,” writes McCann. “Students find it confusing and un-navigable, so despite all the taxpayer investments in student aid, students often don’t know how to access them or which benefits to use.”

A Congressional Budget Office reports analyzes ideas for revamping Pell Grants. Replacing FAFSA with federal tax returns would raise costs by about $10 billion over 10 years, the CBO estimates.

. . . the Department of Education would issue about 2 percent more grants averaging $1,500 – some to newly eligible students who wouldn’t have to report that income now, and some to new would-be students who otherwise wouldn’t have applied because the application was too complex. Additionally, about 20 percent of the grants that are already awarded would be larger under the new formula, by about $350 on average.

Another option is to tie Pell Grant eligibility to the federal poverty level replacing the complicated formula now used. That would make it easy for families to predict college costs and aid. students know early where they stand.

Taxpayers would save $1.4 billion over 10 years if the maximum Pell Grant was reserved for families at or below 150 percent of the federal poverty level (about $35,000 for a family of 4), with smaller grants for families between 150 and 250 percent (almost $59,000 for a family of 4).