Yesterday, the Obama administration said that a new Free Application for Federal Student Aid (FAFSA) is in the works. Some of the changes have been made, and others will be phased in the near future. This plan is designed to increase postsecondary enrollment, particulary among low- to middle-income students. Here is a list of some of the changes:
• Since May 2009, The Education Dept. started providing instant estimates of Pell Grant and student eligibility rather than taking weeks at a time to do so.
• Starting January 2010, students applying for financial aid will be able to retrieve their necessary tax information from the IRS for quick and easy completion of the online FAFSA form.
• Pell Grants and College Tax Credits will be expanded. The Recovery Act increased Pell Grants by $500 to $5350 for 2009-2010 and created the American Opportunity Tax Credit, a new tax credit of $2,500 for four years of college tuition. The President's 2010 Budget proposal would make these policies permanent and ensure the Pell Grant continues to grow. Together, they will provided around $200 billion in college financial aid over the next decade.
• The FAFSA form will also become easier to fill out. The administration is seeking authority from Congress to eliminate financial information from the aid calculation formula that is not available from the Internal Revenue Service (IRS). This will effectively remove 26 difficult financial questions from the FAFSA form. These questions tend to have little impact on aid awards. Only questions that applicants already submit to the IRS will stay.
• The President's 2010 Budget proposed to modernize and expand the Perkins Loan Program by providing an additional $5 billion in Perkins Loans and continuing the low five percent interest rate. This will expand the program to include over 2,600 additional schools and an estimated 2.7 million additional students each year. This will help the neediest of students to have access to federal financial resources they've not had before.
• Available summer 2009, enhanced skip-logic used in the new web-based FAFSA will reduce user navigation for many applicants by more than half. This is another step in making the financial aid process less of a hassle for students.
• Obama has also proposed a five-year, $2.5 billion fund to build federal-state-local partnerships aimed at improving college access and completion, particularly for students from disadvantaged backgrounds. The funds would be used to evaluate programs aimed at increasing college enrollment and graduation, and to improve programs that have show to be successful.
More information on federal financial aid for college is available at http://studentaid.ed.gov.