Student Loan Debt's Identity Crisis
NEW YORK ( MainStreet) Last week the Department of Education (ED) unveiled a plan to disclose more information to state agencies and high school guidance counselors about students who submit the FAFSA, or Free Application for Federal Student Aid. FAFSA is the gateway to most student aid for undergraduate and graduate students. It determines the eligibility for financial aid, including federal loans, federal Work-Study programs and Pell Grants.
In an ED-sponsored event dubbed "Datapalooza" held on January 15 in Washington, D.C., the Department promised to share data "responsibly" with guidance counselors to identify students who have started filling out their FAFSAs with a view toward helping them finish the complex form. It is not clear what data would be disclosed.
The plan is wrapped into the Obama administration's goal to make college more affordable and tries to attack a nagging problem: the low FAFSA completion rate for disadvantaged college applicants. ED is considering the development of a FAFSA application program interface (API) that would, in a yet-to-be-specified way, help users deal with this document which is only available at FAFSA.gov and the ED Website.
It's also an opportunity for software developers and others in the IT space to get a piece of some vendor action. ED officials are expected to issue a formal request for information on how the API might be developed through third-parties for "key education data, programs and frequently used forms," including the FAFSA.
The ED's assistant deputy secretary for innovation and improvement, James Sheldon, told Datapalooza conferees that a FAFSA API would be useful in expanding the way students, families and others use the form. A solution that has been discussed would involve schools being able to submit all of their students' FAFSA forms simultaneously rather than filing them individually.
In the meantime, this is still a work in progress. Harried guidance counselors may find themselves struggling with this new data when it hits their computer screens in a similar way that parents struggle with the FAFSA forms when they land on their dining room tables. Some FAFSA critics believe that a simpler form or none at all - might be preferable to a new API.
"I would eliminate the FAFSA and use the parents' tax return when the child is in the 7th or 8th grade for the purpose of awarding federal aid," said David Bergeron, vice president of post-secondary education at the Center for American Progress. Family income is the key metric in determining aid eligibility.
Most FAFSA proponents acknowledge that the current application is extremely complex - less data, not more, would be ideal. Non-FAFSA data is often needed to determine awards. "The problem is that most institutions would still require other information in awarding their aid," said Bergeron. "But since most only award federal aid, it seems that we should see whether institutions can live without the additional data."