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Student loan fixes will generate heat
Kim Clark
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TEXT OF COMMENTARY
KAI RYSSDAL: As the presidential campaigns continue to squabble over the economy, social policy and cosmetics on barnyard animals, parents and students might be glad to hear this: They're at the heart of one of the few places the two parties actually agree. Both candidates say they'll reform the federal government's $150 billion student financial aid program.
Commentator Kim Clark says that's great, but it's going to come with political costs.
KIM CLARK: It's no surprise that politicians who bill themselves as change agents are campaigning on something that looks like such a no-brainer. Just ask anyone who's ever had to gather their tax forms, pay stubs and bank statements to fill out the 145-question federal aid application.
They'll all back plans to simplify that process. And just about every parent would support political candidates who promise to get more dollars to needy students: More than 90 percent of those who qualify now aren't getting the aid the government says they need to afford a four-year-university.
Great improvements could be made fairly easily and cheaply. Research by economist Susan Dynarski shows that using tax returns instead of the federal aid application would save students and parents 10 hours of teeth-gnashing a year. It would also save colleges more than $2 billion worth of bureaucratic paper-shuffling. That's money that could be funneled into savings for students. Using IRS information could also make it a lot easier to alert parents early on about how much aid they'd qualify for, and how much they'll have to pony up for college. That would give parents time to save and plan.
If this is such an easy, great idea, why hasn't it happened already?
Well, tax simplification is a great idea too, but the tax code just gets more complicated every year. Why? Because people cheat. Nearly every nit-picky rule was developed because somebody tried to exploit a loophole.
Whoever simplifies the aid application for the rest of us could inadvertently create loopholes for wealthy families to snag scholarships they don't need.
You can just imagine the attack ads political rivals would run against whoever does that.
Both presidential candidates say they have the backbone to make real changes in Washington. Both say they'll reform our financial aid system. Let's hope that whichever candidate wins in November does have the courage to take the heat that change generates. Then the real winners in November will be parents and students.
RYSSDAL: Kim Clark covers money and education for U.S. News and World Report.
The FAFSA measures more than a families income, meaning that tax returns are not going to answer the question for the majority of the middle class. This is why the private colleges with the largest endowments and most generous financial aid, use the CSS Profile, supplements or their own financial aid forms. Should families who scrimp and save be penalized? Our family lived with one car and 4 bicycles for 10 years while our neighbors bought new SUV's. Does this show up on our income tax? Hard working Students who save from every summer job can often find themselves no longer eligible for federal work study. Families living in high real estate markets like California have long been at a disadvantage when applying for financial aid. Financial aid forms are complicated. As a college admissions advisor, I often wonder if many students and families do not explore their options within the private colleges because they find the financial aid forms daunting. I have a degree in Economics from UC Berkeley and found filling out my son and daughter's financial aid forms terrifying. When the students apply as freshman, I filed to over 10 different schools including estimates for early applications! However, the FAFSA is really very easy. It is the private college forms that were so difficult. If I find this process difficulty, how is a single mother working two jobs, with limited online access and a gifted student going to find their way into America's elite colleges, where they have every right to attend. These same colleges offer great financial aid and receive more than their share of federal research and financial aid. The political realities of making a college education affordable for the entire population is perhaps more than either party is willing to discuss.
