The FAFSA's Midterm Grade

Changes intended to make filing for financial aid easier were accompanied by major structural hiccups.

A pile of $1 bills
Mark Lennihan / AP

When Marie Groark, the executive director of the Get Schooled Foundation, contacted the California Student Aid Commission in January, she was expecting to hear good news about students completing their Free Application for Federal Student Aid (FAFSA) application. That’s not what she got.

This past October saw some significant changes to the FAFSA, designed to make it more accurate and easier complete and, as a result, allow more students more time to make an informed college decision. While the full effects of the new FAFSA won’t be clear until the aid cycle ends this summer, preliminary lessons can be gleaned from the rollout of the new application. While the big-picture takeway is encouraging—the number of FAFSA completions is up nationally and is nearing a new high—the news is not quite as good for the low-income, first-generation, and minority students policymakers hoped the FAFSA changes would help the most.

Get Schooled is a college-access organization that serves those students. It has partnered with the California Student Aid Commission (CSAC) for several years to promote a college-going culture, in part by sponsoring school-based contests that reward students for completing the FAFSA. The contests had always taken place in January because, traditionally, it wasn’t until January 1 that students could fill out a FAFSA. Meanwhile, the deadline for CalGrants—which help cover tuition for two- and four-year colleges as well as other costs for students with financial need—is in early March, so, in the past, that meant students and families had a relatively small window to get the FAFSA completed, often having to estimate their income if they hadn’t already filed their taxes.

The contests created an atmosphere of excitement around one of the least-exciting things in the world—filing federal forms—not only with financial incentives like scholarships, but also by tapping into students’ instinct for competition, leading to a 10-15 percent increase in FAFSA completion on average.

This year, the FAFSA changed in two important ways. Thanks to an executive order issued in 2015, the window for applying now starts on October 1 instead of January 1, and students can use tax data from the prior-prior year (PPY) to fill out the form. Someone completing the FAFSA this year, for instance, would use her tax filing from 2015 instead of estimating what would be on her family’s 2016 filing, and she could do so relatively easily using a data-retrieval tool, introduced in 2010, that auto-populated much of the application with information pulled from the IRS. The aim of these changes was to make FAFSA completion easier and to give students a clear picture of their aid eligibility much earlier in the college-application process than in the past. The Obama administration, schools, and college-access organizations expected that the updates would get more people to complete the FAFSA, to do so earlier in the year, and, ultimately, to attend college.

Given these expectations, Groark wondered whether Get Schooled even needed to run the FAFSA challenge again this year. She contacted Patti Colson, a communications director at CSAC, to see if she thought it was worth doing. “She wrote back,” Groark said, “all caps ‘YES! These schools need your help.’” Despite the early start, the number of Californians completing the FAFSA for the first time at the end of January was almost 100,000 behind what it was the previous year. Was early FAFSA about to fail in California, home to the largest population of high-school students in the country?

Not if Groark and Colson could do anything about it. The California Student Aid Commission jumped into action. It pushed districts to get the word out and help students complete the application, as they had in the fall. Get Schooled took to Facebook and Twitter to raise awareness about the FAFSA. It started a campaign that entered any student who simply used the hashtag #FAFSA on Twitter into a drawing to win a $1,000 scholarship. Over 18,000 students did just that in February alone. This is one of the three winning tweets:

The strategy seemed to work. When the California financial-aid deadline hit on March 2, FAFSA completion numbers reached new highs for both first-time and returning applicants. To be sure, some of the more than 80,500 first-time applications that were completed in the final two weeks can be attributed to procrastination, which makes it hard to measure the effect that Get Schooled, CSAC, school counselors, and other organizations had in that time span. Whatever the cause, early FAFSA had passed an important test: More people applied in the state that educates the most students.

Overall, news about the FAFSA has been positive. In the first week that FAFSA opened last year, 135,387 applications were completed; this year, 196,736 were. The word on early FAFSA, it seems, got out.

Nick Hillman, a University of Wisconsin professor who studies higher-education finance and policy, and his graduate students Ellie Bruecker and Valerie Crespin-Trujillo have been tracking FAFSA completions for several years using federal data. For the latest FAFSA cycle, their graph shows a steep climb in the opening months. After hitting 1 million completed applications by December, the number of new FAFSAs slowed down until another, small surge in late February, as financial-aid deadlines approached.

Katharine Meyer, a Ph.D. student in education at the University of Virginia, has also been tracking FAFSA completion this year and, like Hillman, has observed significant growth over last year. Comparing filing rates for districts where 80 percent of students receive free or reduced-price lunches to those where just 20 percent do, Meyer’s data suggests, however, that students in wealthier districts took advantage of the changes to the FAFSA more than their counterparts in poorer ones.

Similarly, in an unpublished paper, Hillman, Bruecker, and Crespin-Trujillo show that over the last three years, high schools in western states, schools with higher shares of African American students, and schools with high numbers of low-income students have lower FAFSA-completion rates than the typical high school nationally, which is a bit shy of 50 percent.

These gaps are not exactly surprising. In wealthier suburban and urban districts, students generally have more resources, including greater access to counselors, and might well have been pushed to file earlier. There’s also the fact that poorer students are less likely to apply to four-year colleges than their more-affluent peers, and many people who apply to community college often fill out the FAFSA later in the financial-aid cycle.

Closing the gaps in FAFSA rates won’t be easy—and it’ll take more than email and text campaigns pushing students to file on time. At a recent Congressional hearing, witnesses reiterated the importance of simplifying the FAFSA, which has long been criticized for being too long and too complicated.

Thanks in part to research by Susan Dynarski, Judith Scott-Clayton, and other economists, the Obama administration made the FAFSA simpler by having the IRS create the Data Retrieval Tool (DRT), which automatically transfers data from tax filings into the aid application. Debuting in 2010, the DRT only realized its full potential this year, when families could use their already-filed taxes from the prior-prior year. Some of the growth in FAFSA filings can almost certainly be attributed to the DRT’s making the process easier.

But then the FAFSA got harder when the DRT stopped working. On March 3, Shannon Grimsley, the director of outreach at the Mississippi-based Get2College, was running a FAFSA workshop at Provine High School in Jackson, Mississippi. Provine’s student body is 99 percent African American and every student in the school is eligible for free lunch. At approximately 2 p.m., the workshop came to a halt, when applicants received a notification that the tool was temporarily out of service.

Grimsley wasn’t worried; she had seen this before. She told the students to wait an hour, but an hour later nothing changed. Two hours later, the next day, Sunday—nothing. By Monday morning, she knew she was looking at a serious problem: The DRT was broken.

Grimsley and others contacted NCAN, which along with the National Association of Student Financial-Aid Administrators (NASFAA) and Democratic Representative Lloyd Doggett, of Texas, pressed the Department of Education and the IRS for an explanation. Six days after the outage began, a press release explained that the DRT had been taken down intentionally due to security concerns and would be out of service for several weeks. On March 30, the IRS and Department of Education issued a joint statement that students should be prepared for the DRT to remain out of service until October 1, the start of the next financial-aid cycle. The FAFSA can still be completed, but it has to be done manually and the student must have tax forms from 2015.

For most of March, the FAFSA website did not make it very clear that students need to fill out their tax information manually.  The FSA site displayed only a small announcement about the outage at the bottom of the FAFSA application page and no notification about the problems with the DRT once students began the application. The form continued to encourage applicants to use the tool, only to lead them to a page on the IRS website vaguely explaining the situation and apologizing for the inconvenience. It was only on March 30, 27 days after the outage began, that the link to DRT was removed from the FAFSA. In response, the Institute for College Access and Success released a list of requests for the Department  Education to follow to ease the burden on students, counselors, and schools. Education Secretary Betsy DeVos, who failed to give students, schools, or Congress any warning about the removal of the tool, has not commented publicly on the outage. The Department of Education declined a request for further comment.

The immediate effect on filing rates aside, the DRT fiasco will likely lead to more students being selected for verification by the Department of Education, a process that requires schools to collect additional documentation from a student before she can receive an aid package. And while the government doesn’t disclose what triggers selection for verification, Justin Chase Brown, the director of scholarships and financial aid at the University of Nebraska, believes that both students who are eligible for Pell and those who haven’t already used the DRT are more likely to be selected for verification—a tedious process that can place a huge burden on schools that serve large numbers of Pell-eligible students. At the House hearing on financial aid, a representative of the Houston Community College System testified that they employ 18 people to help about 38,000 students, out of a total of 80,000, through the verification process. (A Department of Education spokesman hadn’t followed up with comment in response to a request for more information about verification procedures by the time this story was published.)

The burden is even greater on students. For all the improvements it made to the FAFSA, the Obama administration made the application harder for one group of students. Because of a new policy, students and families who indicate they didn’t file taxes—largely people who made so little money they are not required to file—are now more likely to be selected for verification, which means they must secure proof of nonfiling in the form of a letter from the IRS. This trouble falls disproportionately on poor students, who already are asked repeatedly to prove they are poor by a government that already knows it.

Back in California, CSAC’s executive director, Lupita Cortez Alcala, knows the organization cannot claim victory yet.  The “harder part,” she said, is “actually get[ting] students to use their award.” Slightly more than a third of the students who receive a grant from the state never use it. Cortez Alcala is proud of the way California came together to get the word out about FAFSA, but “the fact of the matter is that the real work is the transition between high school and the first year of college.” The FAFSA reforms worked, but, for low-income and first-generation students in particular, the work continues.