Financial aid

by Brian Close

Two recent White House proposals could change the amount of students’ financial aid, though early drafts are drawing criticism.
The first proposal would change the data required by students and parents when filling out the Free Application for Student Financial Aid. The second would change the formula for how the money is dispersed.
The financial aid application currently uses tax information from the prior year. The proposal would allow the government to use tax information from the “prior, prior year,” so that the application due spring of 1998 would use information from 1996.
White House officials have said the reason for the proposal is the number of mistaken financial aid applications caused by the estimation of tax information by parents attempting to meet college deadlines.
In a Department of Education study, about 4.5 percent of Pell Grant recipients had incorrect financial aid statements, allowing them to receive increased aid.
“The federal government has found, through verification, that there are enough errors and incorrect information reported on the FAFSA that they feel it would be more accurate for them to ask parents to give prior, prior year to make sure their taxes are already done,” said Sheryl Spivey, director of the Office of Scholarships and Financial Aid.
Spivey said the University checks a certain number of forms to ensure accuracy.
“We are in a program called Quality Assurance. We look at the error rate from the previous year, and verify about 5 percent of our population,” she said.
The second White House proposal would adjust the method in which a family’s assets are evaluated.
Rather than using a family’s actual assets to calculate student need, the new formula would assign a median value to each income range. That value would be used, whether a family had saved more or less than it indicated.
In this way, officials said they hope to inspire families to save more by not including the extra savings in the calculation.
While the proposal is intended to help people who have saved by not including their assets, it will also overstate assets for those who have not saved.
Though the proposals haven’t been finalized, they have drawn some early criticism.
The proposal is not as attractive as it looks, said Larry Zaglanizzny, associate director of the National Association of Student Financial Aid Administrators.
“When you look at it closely, it really will hurt a number of families and students who just do not have that computed asset to use for college,” he said. “They either will not go to school or will have to take more loans.”
The proposals have also received national criticism from Republicans, who say the plans will not pass through Congress.