The Simplified FAFSA’s Complicated Rollout

They introduced a bill with two questions. You would have thought that they had introduced a bill that eliminated the Higher Education act because we had all of the DC Intelligentsia, trade groups coming and saying, you can't be, it can't be done. It can't be done. Like, you guys are bananas. This is crazy, you know. But the senator's response was, tell me why, like, push back.

That was Andrew lacosse, who was a senior education policy advisor on the US Senate Committee on Health, Education, labor and Pensions. He was in that role for eight years and saw the development of something that's been in the news a lot in recent months, the FAFSA or the Free Application for Federal Student Aid.

And Jeff, it's been in the news because the rollout of the new simplified fafsa, well, let's just say it hasn't gone smoothly. Some might even call it a disaster. But today we're going to hear a lot more from Andrew about what was really behind the new fafsa. And then we're going to hear about how one institution isn't playing the waiting game when it comes to awarding financial aid. On this episode of Future youe.

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I'm Michael Horn.

And I'm Jeff Salingo. So on a recent show, Michael, where it was just the two of us, we talked about the fafsa. It also came up in our Reporters Roundtable a few months ago with Chris Quintana of USA Today. And then there was this recent news from the National College Attainment Network, which tracks FAFSA completions. And it found through the end of February that submissions are down 38% compared to the same time last year. Now, what's probably more worrisome is that 47% fewer seniors from low income public high schools have submitted the form by late February compared to the last cycle, according to ncan. I guess we never thought we'd do a whole show on the FAFSA because, frankly, I wasn't sure we'd still be talking about it this far into the spring.

Neither did I. But here we are. And here it's starting to have more and more implications for the future of higher ed. Just to quickly catch up, folks, on this, if you haven't been paying attention, Congress passed the FAFSA simplification act, or FSA, as part of the consolidated appropriations act of 2021. And as we Will hear from Andrew shortly. The new FAFSA was supposed to be put in place last year, but it was delayed.

Yeah, Andrew will also catch us up on all the changes to the fafsa. Michael. But beyond overall simplification, there were a number of changes. Things like the Expected Family Contribution, or efc, was replaced by the Student Aid Index, which they're calling SAI now because there was concern that the EFC was misleading. It wasn't really a calculation of the amount of money a student's family was expected to pay.

Yeah, and we're just going down the acronym soup again, Jeff, but the another big change is that students can also list up to 20 colleges on their FAFSA. That's up from 10 in previous years, which, as you know, is probably a reflection of students applying to way more colleges than they did in the past. Now, one controversial change we should also mention is that parents no longer get a break for having multiple children in college at the same time. Now, colleges, of course, can still consider that when awarding their own aid, but it just doesn't factor into the FAFSA

itself, which, of course, Michael, will be something that will affect the both of us several years from now. But let Andrew tell us the rest of the story of how we got here. Here's Andrew lacoste, who, as we said at the top, was a senior Education Policy Advisor on the US Senate Committee on Health, Education, labor and Pensions until 2021 and is now head of Policy for Guild Education. Andrew, welcome to Future youe.

Thank you for having me.

So the 1992 reauthorization of the Higher Education act created the FAFSA, which is I did not know. And a favorite meme of mine, of course, was Senator Alexander unfurling that fafsa, which grew over time, as we know, to more than 100 questions. Can you give us a short history lesson on how the process for FAFSA simplification began and what really prompted it and really drove it to this point?

Yeah, I love this question because it's always a mystery of how a lawmaker kind of picked up a particular issue, like how did it get into their craw or become a priority or in this case, almost in obsessions. But the short of it is it really came from the best approach to policymaking. The push came from really smart expert witness researchers. So it was really a decade ago, the HEA, the Higher Education act reauthorization hearings, started in the HELP Committee, Senate HELP Committee, back in 2013. So a decade ago, this was Tom Harkin was chair Senator from Iowa, Lamar Alexander, Senator from Tennessee, was the ranking Republican. And we had done dozens of hearings to inform the reauthorization process. And I will do one quick plug. Michael Horn, your fabulous co host, was an expert witness at that hearing. 15 minutes of fame, I would say. He was no Taylor Swift of a witness, but he did well enough and avoided the curveballs. So hat tip to you, Michael, but we had this one hearing in November and we focused on college access and we had four great distinguished witnesses. Bridget Terry Long of THEN at Harvard, Dean of GSE and Judy Scott Clayton at Columbia, Kim Cook from ncan, excuse me, and Kristen Colquhoun from acm. And they basically the consensus was the FAFSA is a nightmare and if you want to improve college going rates, particularly among low income students, fix the fafsa. And they gave a kind of a bold recommendation and based on some research, I believe it was from Sue Dynarsky at Michigan. You can ask two questions and get all the information you need to award a Pell Grant. Simple as a postcard. And Lamar's ears perked up, was like, what? Like whoa, that's crazy. And I think it was really like two things that probably stimulated this in his mind or why he latched on was it's just a perfect example of the complex bureaucratic system of higher ed. And as you mentioned, props, like props are key for politicians and selling things. And it had a Prop 108 question page form he could unfurl. And it was just a representation of just this government barrier nonsense. And you know, Senator Alexander's long railed against overregulation of colleges. And while FAFSA isn't a regulation per se, it just was a natural extension to kind of weeding the garden, fixing, you know, the morass of higher ed, government bureaucracy. And then second, you know, I think it was just scale, right? Like FAFSA impacts everybody. 17 million Americans are going to fill it out. And if he could make some changes to it, it would be incredibly consequential. And so that was where it came from. And the backstory here is he ran over to his friend Michael Bennett, who was then on the committee and whispered it in his ear and said, hey, let's do this, like let's work on it. And so he and Senator Bennett of Colorado teamed up and we had a little working group and created a mock up of the FAFSA with two questions and that was his second prop. And held roundtables across Tennessee and Colorado and D.C. we did press stakeholders and at the end, the first generation before we have the current law was they introduced a bill with two questions. You would have thought that they had introduced a bill that eliminated the Higher Education act because we had all of the DC intelligentsia, trade groups coming in saying, you can't be, it can't be done, it can't be done. Like you guys are bananas. This is crazy. But the senator's response was, tell me why push back? And they did. And look, we knew it was never going to be two questions, which were what was your family income and what was your family size? But instead of starting from 108 questions and whittling it down, let's start from two and then you tell me what you want to add. And I think that was a successful strategy. And from there just the legislative sausage making process unfolded. Although it was 10 years and here we are with a law and obviously there's some issues with the rollout, but that's really the history here of pure good policy making with recommendations from experts, piqued lawmakers interests, and you got a bipartisan group interested in it and working to support college access, and it just took off.

Andrew, fascinating backstory on this. You mentioned impact in your answer. What was the overall goal of simplifying fafsa? I assume it wasn't just reducing the number of questions in the sense of bloat, but what was the larger public policy goal?

Yeah, I mean, look, the number of questions is easy, like to just, you know, point out, but the backstory and the goal here is really like the human element, which I know has been reported on a lot and discussed, but it's so true is when we had these roundtables when we, you know, met with folks, they don't care about the, you know, Lamar's interest in government bureaucracy. It was English as a second language. Students not know how to fill out the form. It was only in English and Spanish. Homeless and foster care kids couldn't find the documentation and the paperwork. First generation students whose parents were distrustful of why am I giving this information to a school? Or I remember we had a story from a student who was being raised by their grandmother and their grandmother just refused to give any documentation over to the school. And I remember we did a roundtable in Tennessee and a couple smart PhD level professors were like, I have a PhD in economics. And it took me and my kid like an hour and a half to figure out this damn form. So the human impact was it impacts real world people. And yeah, okay, that's a tough but, but what's the other impact was? Well, there's a lot of federal money there and folks were leaving it on the table. So I think one figure was graduating high school students left $2.6 billion in Pell grants unclaimed 1.2 million Americans start a FAFSA but never finish it. And so if we're concerned and we have this belief that some form of post secondary education is a key to the middle class and there's federal aid there, this form is just really a barrier and can uplift a lot of Americans. And so it was a policy goal for Republicans on detangling government bureaucracy. It was a policy goal for college affordability in a way that Democrats and Republicans could get aligned behind because it wasn't a new program, it wasn't a new funding stream. You know, it was existing aid. It was just a barrier of a form. And if you did that, you could unlock more college affordability on aid that's already there. And it was just kind of a recipe for success that both kind of Republican and Democrats kind of natural policy interest areas.

That never happens anymore, does it?

No, no, no.

So, Andrew, as you know, there's a lot of criticism about the rollout of the new fafsa. And we don't want to get into the particulars since you're no longer in in government, but I've been wondering something that maybe you can answer. If this wasn't really ready, would it have been so difficult to delay it a year? Can you just give us your take on that?

Yeah, so. So maybe let me share a little bit of insight into even how the deadlines came to be. So when we were drafting the law again, I was a partial drafter, there was many other folks in the room. We recognized that the impact was going to be huge and so we wanted to operationalize it quickly. And so we actually originally wrote in the legislation that we wanted it to be effective the following award year from when the President signed it. And as Ed, there's this back and forth between the agency and Congress when you're drafting legislation to make sure that they could even implement it. It's called TA Technical assistance. And the department actually pushed back and said, no, we can't actually do that year, push it back another year. And we're like, the impact's so great here and it'd be so consequential. That's annoying. But you know, we want to see this done right. And so we agree in the legislation to change it to the 2023, 2024 year so it was already pushed back once by the department. And then after passage, Ed asked Congress again to delay it. Congress agreed it got delayed. And so to your question, could the department have delayed it again? Sure, but at some point you kind of have to face the music. Right. I don't know whether this administration thought the rollout would have been smoother and would have been a win for them, but again, I just think three, three delays was, was probably just the tipping point. It was probably incumbent upon them just to get it out there.

To get it out there.

Yeah. Look, it's a rocky road with any kind of massive change. I just don't think there was the anticipation, even though many folks were raising the alarm bell that it would be this rocky of a rollout.

Do you think that we should be concerned at all that this just adds to the negative perception right now that higher ed gets in general, especially at a time when the college going rate in the US Is falling, or do you think, you know, we'll get over this, people will forget about it and it will all be good?

Well, one, I think the anger is certainly warranted, and I'm not speaking for policymakers anymore, but the rollout is really certainly at odds with their goals in passing the legislation in the first place, to be honest. And I don't know, the anger that you're sensing or that you're hearing is coming from individuals that, and there's, excuse me, they're directing it at schools. This is really government, right? This is a government form and process. And, you know, Justin Drager and NASA have done Yeoman's work trying to raise the alarm bells. And so look, is that going to impact the negative polling? Maybe. But my, my sense on those polls is that they're kind of reflective, more of. Is higher ed too woke, too ideological, too bloated, too expensive, which filling out

the FAFSA kind of reminds them of that.

Yeah, yeah. And not really like, you know, meeting the needs of students with faster and kind of clear career pathways with a strong roi or, you know, I think that's maybe the sentiment picked up in those polls. Now, is this FAFSA going to help? Absolutely not. But it's certainly a step backwards in, in higher ed's perception among the public, whether that rests at the feet of the institutions themselves or government. But it certainly doesn't help with people's perceptions. And I was looking at the enrollment number, excuse me, the FAFSA submissions, and we're down 50% from where we were the previous year. And so it certainly doesn't help with colleges enrollment woes. I just don't think that's a reflection of the people's perception of higher ed. It's just another data point that's just going to add to people's. I don't mistrust or concern about the direction the higher education system's going.

Andrew, lost in the news perhaps about the rollout is that beyond it just being a shorter form, there are also other good features about the new fafsa, like the direct transfer of federal tax data. I'm not quite sure that most of our listeners have keyed into just how big a deal that is. And I'm sure there's a backstory there as well.

Right. Yeah. No, you're, you're 100% correct that the tax data transfer is almost more consequential than the actual FAFSA form question shortening itself. That was a massive battle to begin with. So let me, let me back backtrack a little bit here and give you some history. So this proposal actually came from, I believe the Trump administration to Congress that they wanted the authority for the department to grab data from the IRS to kind of basically auto populate an individual's financial status to fix a really easy problem of Americans saying I already gave the government this information, why am I giving it to them again? And in order for the department to do that, they needed some statutory authority and that rested in the IRS tax code. And so this was not just the HELP committee, but the Senate Finance Committee and the Ways and Means Committee in the House. And so there was a proposal that we worked on among the chambers to fix this. And it was called the Future Act. And it would basically enable what I just said, the department to grab IRS data with taxpayers consent. And it saved money. Right. Like if there was greater verification of an individual's income and data, one, the individual wouldn't have to report it and two, the department wouldn't be making mistakes and making overpayments and then having to rectify it. So it was a huge win, but it was a huge hurdle because it amended the tax code. And lawmakers on that panel were hesitant to make the changes about disclosing taxpayer information, even to another agency. So it was tough, but it's really the key to fafsa. So we did that before the FAFSA Simplification act became law. It was called the Future Act. It was paired with some funds for HBCUs, but that was the first step, we call it the first step to FAFSA reform. It actually was able to eliminate 22 questions. And then, you know, we, quote, finished the swing later on with the true FAFSA amendments that really completed it. That brought the 108 down to around, you know, 3233. But you're 100% right that this tax data transfer was instrumental and I think is really key to, you know, responding to individuals who say the government already has my information on this stuff. Like, why am I having to self report it? Why am I having to go back and look at my old tax pay stubs, et cetera, and send it up when you already have it? This is again, government bureaucracy, government ineptitude at its finest. And I think this is underappreciated. And once the rollout gets a little bit smoother and we're into the next years, I think it'll be really, really impactful.

Classic case of where the organization thinks it's department separation is more important than the individual or consumer on the other side, right?

100%. 100%.

Andrew, thank you so much for shedding light on all these topics and giving us this background. Really appreciate having you on.

Not a problem.

That was great, Michael. A bit like how I'm just a bill on Capitol Hill becomes a law, because I'm not sure in this hyper partisan city that still happens the way that Andrew just described it. But as we know, there's the law and now there's the rollout. And it's been rocky and I think some might say that's being kind. So the reaction in higher ed has been to give students estimated packages while institutions wait for the FAFSA numbers from the Education Department. A number of colleges and universities have pushed back their traditional May 1st deposit deadline for enrollment, assuming that even though students will know they are accepted by then, they may not have had time to fully look at the financial aid package they received. And then there is what Colorado Mesa just did. They announced in February what they called the wait is over, which is an early award process built on their financial aid calculator, which isn't all that unusual. Lots of colleges are given estimates. But what's different here is that Colorado mesa, with some 10,000 students in grand Junction, Colorado, is telling students that they can actually bank on the offer, that they'll actually get what the estimate is. So we called up John Marshall, its president, to ask him how they did this and why they did this.

John, welcome to Future youe.

Appreciate you guys having me.

You bet. So, as we mentioned earlier, Colorado Mesa is one of many institutions that have announced Responses to the FAFSA delay. Most colleges are simply moving their deposit deadlines from May 1 to a later date. Others are sending out estimated award packages. But you decided to go even further, not just providing students an estimate, but actually an offer that they can bank on. Can you walk us through what led to that decision?

Yeah, for us it's really mission central. You know, if you think about a lot of these regional comprehensive universities, which Colorado Mesa is one, we sit basically halfway between Denver and Salt Lake. And so we're 250 miles from everywhere and several mountain passes in between. And so for us, our student body is going to be low income, first generation students of color and rural kids. That is the bulk of our student body. And so said differently, we are going to be disproportionately reliant on student financial aid in terms of providing access to students who, you know, typically haven't had access. So for us, this was not a nice to have or maybe this would be a good idea. This is a must have for us very much, mission central and making sure that we keep doors open for students who, as I said, haven't typically had access to college.

So what's interesting about that, John, is that I mentioned what you all did to several other presidents recently and a couple of them said, well, that's a great idea, but we couldn't really take the risk of making such a promise. So how assured were you that you could do that? And, and have you mentioned, you know, have you estimated the potential exposure for the institution?

Yeah.

If you end up, for example, with a lot of students who you end up making that promise to, who really actually in the end didn't need as much as you thought they needed?

Yeah, well, I'm giggling a little because, yeah, welcome to my world. There is some risk, but there's some fairly significant risk. But again, the question is, what's the alternative? Is the alternative sitting on your hams and losing maybe an entire cohort to no college at all? I got asked the same question about some version of are you just trying to get a jump on the competition? Well, for the last several years, the number one competitor for Colorado Mesa University has not been Boulder or Fort Collins. It's no college at all. Which is to say, if we don't jump on this, we're concerned about a significant portion of our student body not going to college at all, period. So financially, the question becomes, do you have some exposure? Well, of course we do. Is that number 2%, 5%, 10%? You know, we have our Estimates. But the reality is, in conversation with our board of trustees, we really tried to frame it in the alternative. What happens if we don't do this? And I think it became really clear for us that yeah, there's some financial exposure and there's some risk, but the greater risk in our estimation was literally hundreds of students throughout rural western Colorado or first generation families not going to college at all.

No, that makes sense. So hopefully we hope the FAFSA mess will be fixed by next year. But given financial awards are annual, what thought have you given to how you retain students who will be coming under the weight is over initiative, knowing that what they might get the next year might be different from what they've gotten this year?

Yeah, you know, if you zero in on some of the detail around this new SAI versus the old EFC metric that the feds use, I think our estimate is that many of our students should see a little bit more pell, not less. And so the hope is that you're going to see that now that's, that may not be true for sole proprietors, that may not be true for kids coming off of farms. There's, you know, there are some wrinkles in particular for rural kids that we're a little nervous about and, and unclear what that's going to look like. So put an asterisk next to the answer. But I do think that this is probably over time, a good, really a good thing and maybe back up and just say we have, you know, for all the frustration and appropriately so, I would say with the federal kind of botching of this rollout, what was underneath it was the right thing. What was underneath it was simplifying the FAFSA which needed to happen. What was underneath it was this idea of trying to make it easier for low and middle income students to access college. So those are all the right principles. So directionally we're heading in, we think in the right direction. It's really bridging what was a good idea with where it ultimately lands, which we think will be a good place. And in between that time, we've just got to come alongside families, make sure they've got the ability to plan in real time and not continue waiting for months for a federal award.

You had mentioned rural and farms and it's something that I've heard from a number of people about the impact of the SAI versus the efc. Had you been thinking about that? Anyway, given your. I'm assuming that because you get a lot of rural students, there might be a lot of farm families there that you're dealing with. Is that something that you had like thought about looked into as an institution before this to see how those students would be impacted?

Yeah. In fact, we had sent a letter to our, our federal delegation on this topic asking him to, to review it because it's a fairly important distinction and you guys, you know, track this stuff closely. So, you know, this is sort of toggled on and off over time. Again, if you look at the macro, there are some things in this new policy that are concerning and frankly that are going to reinforce some of the negative departures between rural and urban America. And, and I'll, I'll give you one additional one. In addition to the farm and sole proprietorship. Right. In a rural area, you're going to see disproportionately, you know, small businesses and farm incomes. There's also this thing of more than one kid. Right. If you have more than one kid in college, well, who's got more than one kid? Disproportionately undereducated rural families. Who has one kid? People that are better educated in, in the metro areas. So it, there is a larger narrative as a part of this that I think we are really focused on trying to continue to come alongside the portion of Colorado that is going to be disproportionately first in their family to go to college, low income rural students of color who are being, I would argue, disproportionately impacted, intentionally or not, by some of these policies or sort of policy rollout mistakes.

John Marshall, president of Colorado Mesa University, thank you for being with us today.

Yeah, yeah. Appreciate the conversation. Nice to visit with you guys.

Take care and we'll be right back on Future youe.

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welcome back to Future.

You two, very interesting interviews there with a lot packed in. And we're going to let them mostly speak for themselves on this episode. Jeff. But, but maybe just a quick wrap up. I'd love your own thoughts. You know, You've been in D.C. for so long. I'd love your own thoughts about what you think the department could have done better and really importantly, what the longer term impact is here.

Yeah, Michael, I doubt they wanted this to really happen in an election year. This has not exactly been very smooth at all. And it's not something you kind of want out in the news on a regular basis, especially in an election year. So clearly, you know, this is, you know, it's not that they ever planned this, but I don't think they really are enjoying this moment right now. Look, they're going to get this solved. But as S and P just said recently, for colleges that are on the brink, it does matter, right? They need to get that enrollment kind of in place in April and May and June. And if they don't get that enrollment kind of in place, and for many of these colleges, they're so dependent on federal financial aid for their state students that it really does matter for them. And so if they miss their enrollment targets by 10 or 20 or 30 students, they are so close to going out of business that they might, or that they might end up closing some programs. And that's exactly what S and P said recently in a warning that they put out about this delayed fafsa. And I also don't think we've seen the full fallout from the two kids in college change the issues that John mentioned around family farms. So I think that there's this initial blowback to the delay to the new SAI and what that means. But just wait until the awards start coming out in the next couple of weeks, next couple of months. I think then people might say, well, wait a second, why am I getting this kind of award? And last year I would have gotten this kind of award. That's when I think we'll start to really dive into what is the real meaning of these other changes in the fafsa and that might lead to more changes in the future. I don't think we're done tweaking it, but I think it's important to remember the larger policy goals here that Andrew talked about in his interview. And I think that probably in a few years we'll think this is great. But I think for now, you know, beyond being an election year, I think it does remind people, just like healthcare.gov and its problematic rollout years ago, that, wow, health care in this country is really broken. And I think this is reminding people that higher education in this country is really broken and truly reminding them how expensive college is, that we have to fill out this FAFSA to begin with. So I think again, long term this will be solved, but I think in the short term, this is not good for what's happening in higher ed writ large right now in terms of just faith that the public has in institutions of all kinds, from both the government to colleges and universities, makes a lot of sense.

Jeff largely echoes how I'm thinking about this as well. And we're going to leave it there. Just a lot of fascinating insights about the behind the scenes and then what goes into a college. Making a really a bold decision in this environment right now around given everything with fafsa, something to stay tuned on. And with that we'll wrap and just say thank you to all our listeners for joining us on yet another Future you. And a reminder to follow us at FutureYou Podcast on social media. Jump on our website. Subscribe to our newsletter, Follow me and Jeff on social media. Of course, we'll interact with you gladly there.

So until we see you next time, keep thinking about the future of higher education.

Sa.