1. Gloria T. Green Director, Financial Aid Services May 2010 FAFSA SIMPLIFICATION Easy As 1, 2, 3

2. Session Overview H IGHER E DUCATION S TUDENT A SSISTANCE A UTHORITY 2 Historical Background Easy As 1. Student Perspective 2. Institutional Perspective 3. Aid Administrator’s Perspective Future of Simplification

3. Historical Background H IGHER E DUCATION S TUDENT A SSISTANCE A UTHORITY The “Advisory Committee on Student Financial Assistance” issued a mandated simplification study in January 2005 entitled “The Student Aid Gauntlet” Includes ten recommendations: Create a system of early financial aid information Make federal need analysis transparent, consistent & fair Expand existing simplification to more students Allow all students to apply for financial aid earlier Make the FAFSA relevant and understandable 3

4. Historical Background H IGHER E DUCATION S TUDENT A SSISTANCE A UTHORITY “The Student Aid Gauntlet” (cont’d) Create a simpler paper form for low-income students Phase out the full paper form and increase the use of technology Simplify and streamline FAFSA on the Web Simplify the verification process Create a national partnership to make access simple and certain 4

5. Historical Background “The entire financial aid system – including federal, state, institutional, and private programs – is confusing, complex, inefficient, duplicative, and frequently does not direct aid to students who truly need it.” H IGHER E DUCATION S TUDENT A SSISTANCE A UTHORITY 5 “A Test of Leadership” Issued by the Commission on the Future of Higher Education Released on September 26, 2006

6. Historical Background H IGHER E DUCATION S TUDENT A SSISTANCE A UTHORITY Higher Education Reconciliation Act of 2005 (HERA) Federal means – tested benefit program as an alternative to a tax return Supplemental Security Income (SSI) Food stamps Free or reduced price lunch Temporary Assistance for Needy Families (TANF) Special Supplemental Nutrition Program for Women, Infants and Children (WIC) 6

7. Historical Background H IGHER E DUCATION S TUDENT A SSISTANCE A UTHORITY 7 The College Cost Reduction and Access Act (CCRAA) 2009-2010 Need Analysis excludes the following sources of untaxed income: Welfare payments Earned income credit Special fuel tax credit Foreign income Untaxed social security benefits

8. Historical Background H IGHER E DUCATION S TUDENT A SSISTANCE A UTHORITY Higher Education Opportunity Act of 2008 (HEOA) Required Government Accountability Office to issue a report on efforts to simplify the FAFSA “Highlights of a Study Group on Simplifying the Free Application for Federal Student Aid” October 2009 Expert panel participants said: Using federal income tax data and revising the FAFSA could reduce applicants’ burden Changes to the design and contents of the form could streamline the application Reducing the financial information required by the need analysis formula could ease the applicants’ burden, but some aid redistribution is likely Technology and public outreach are central to implementing changes 8

9. Historical Background H IGHER E DUCATION S TUDENT A SSISTANCE A UTHORITY 9 Health Care and Education Reconciliation Act of 2010 (HCERA) Provisions of the Student Aid and Fiscal Responsibility Act of 2009 (SAFRA) were included as a rider to HCERA Direct Lending Increases the Pell Grant Expanded income based repayment Loan forgiveness after 20 years College Access Challenge Grant Program

10. Historical Background H IGHER E DUCATION S TUDENT A SSISTANCE A UTHORITY Provisions in SAFRA not included in HCERA Changes to federal need analysis formula eliminating assets The introduction of asset caps for Pell Grants and subsidized Stafford loans The elimination of the Perkins Loan Program Changes to drug-related offenses and eligibility for Federal Student Aid 10

11. Impact of Simplification on Students H IGHER E DUCATION S TUDENT A SSISTANCE A UTHORITY 11 New FAFSA Web Form with Enhanced Skip Logic Compared to Current Form Source: Executive Office of the President. Council of Economic Advisors. “Simplifying Student Aid: The Case for an Easier, Faster, and More Accurate FAFSA.” September 2009

12. Student Perspective H IGHER E DUCATION S TUDENT A SSISTANCE A UTHORITY 12 Enhanced skip logic Selective Service registration Dependency status questions for applicants over 24 years old Homeless screening question First –time college students will not be presented with drug conviction question IRS Data Share Voluntary Tax filers

13. Student Perspective H IGHER E DUCATION S TUDENT A SSISTANCE A UTHORITY Pell Grant award estimate on Student Aid Report (SAR) Potential loan eligibility on SAR Link to College Navigator Programs offered Tuition rates Retention rates Graduation rates Transfer rates Graduate Students 13

14. Institutional Perspective H IGHER E DUCATION S TUDENT A SSISTANCE A UTHORITY Federal expenditures Pell shortfall Limits annual increases State expenditures Some states impose earlier deadlines, reduce awards, change eligibility standards Additional state specific questions Statutory requirements 14

15. Institutional Perspective H IGHER E DUCATION S TUDENT A SSISTANCE A UTHORITY Institutional packaging formulas Reevaluate parameters Increased loan offerings Increase in the number of loan programs Institutional aid Unable to keep pace with demand EFC changes Endowments affected by economic downturn 15

16. Aid Administrator’s Perspective H IGHER E DUCATION S TUDENT A SSISTANCE A UTHORITY 16 Individual students and families All FAFSA filers benefitted from expanded use of technology and fewer questions More families qualify for auto-zero EFC and SNT Increased number of eligible applicants and their level of need Increased the number of verification cases Funds management Equity

17. Future Simplification H IGHER E DUCATION S TUDENT A SSISTANCE A UTHORITY IRS Data Share Expected to begin with system start-up in January 2011 Within days of electronic tax filing Within weeks of paper tax filing Data retrieval process added to Corrections on the Web Tax filing status to be added to data retrieval and transfer process Spanish version Verification requirements ISIR flags identify when income data obtained directly from IRS versus self-reported Verification on Negotiated Rulemaking agenda 17

18. Future Simplification H IGHER E DUCATION S TUDENT A SSISTANCE A UTHORITY 18 Potential links from FAFSA On The Web (FOTW) to state and institutional websites May permit collection of state/institution specific data Simple FAFSA Savings and investment threshold Statutory amendments required

19. H IGHER E DUCATION S TUDENT A SSISTANCE A UTHORITY 19 Discussion/Questions