The problem with streamlining FAFSA
Filed under: College
There has been a fair amount of complaining about the Free Application for Federal Student Aid (FAFSA), the government-administered form the calculates an "expected family contribution" for college students based on their families' financial situations.Apparently it was just too many hours of work to qualify for financial aid for college, and come on: Why should people have to fill out a detailed form to get money for college?
Mercifully, there are some changes on the way. The USA Today reports that "Education Secretary
Allowing families to provide IRS data instead of having to re-report the same information is a good idea. But the real problem with the FAFSA is that it doesn't present colleges with nearly enough information to determine how much a student and his family can actually afford to contribute to college.
Believe it or not, the FAFSA form does not include retirement assets or home equity -- the two largest assets that most families have. Given that most families are forced to pit paying for college against retirement saving, telling someone how much they can afford to put toward college without including these two data points is a bit like telling someone that she's fat because she's 5-foot-8.
Of course, lobbying for the need to make the FAFSA form more complex and labor-intensive is not a good way to make friends. But it might be the only way to fix the broken financial aid system.
Reader Comments (Page 1 of 1)
6-29-2009 @ 4:39PM
Bridge said...
Oddly, there is also no place on this form to submit information about bankruptcy. Because of that, my child got no financial aid until we followed up individually with EVERY school and submitted verified documentaion. It is a joke.
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6-29-2009 @ 4:50PM
Geneva said...
As the custodial grandmother of a teenager entering college, my retirement income was not allowed. We had to round up her mother and stepfathers income. The person who has custody should be the one whose income is used.
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6-29-2009 @ 5:12PM
Kevin said...
It is amazing that retirement assets and home equity are currently not figured into ones financial ability to afford helping out their children. When I filled out FAFSA for my two sons, I compared my sister and her husband with myself with a similar income and only a year apart in age. They have a well funded retirement locked in and live in a house worth three times as much as mine. Because my retirement is almost nil, I have lived in a small house and personelly saved a lot to offset. Per FAFSA I can afford to pay a lot more than they can even though they will be retiring soon and I know I will be working for at least 10 more years. (PS, I was just laid off as soon as my youngest son finished college, go figure.)
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