FAFSA-palooza

This summer those of us who qualify as “college admissions geeks” had the opportunity to experience our very own “FAFSA-fest,” as the U.S. Department of Education made two major announcements regarding changes to the Free Application for Federal Student Aid.   The addition of a third FAFSA-related announcement from the White House earlier this week turned it into a “FAFSA-palooza.”

FAFSA.com

In late July the U.S. Department of Education announced that it will take over the web domain FAFSA.com as part of a negotiated settlement with its previous owner, Student Financial Aid Services, Inc.  Student Financial Aid Services, Inc. is a for-profit company providing services such as FAFSA form preparation for a fee, and the settlement with the Department of Education coincided with a separate complaint filed against Student Financial Aid Services by another Federal agency, the Consumer Financial Protection Bureau, for illegally billing more than 100,000 consumers.

I first encountered this issue during my tenure as President of NACAC.  A Board member had done a Google search for the FAFSA during one of our meetings, and all of us were disturbed to learn that the first search result was FAFSA.com rather than FAFSA.gov, the official site to access the FAFSA. On FAFSA.com families were offered help in completing the FAFSA but had to pay a fee to do so (if the form isn’t free, doesn’t that make it the “AFSA”?).  The services appeared legit, but I was troubled by the fact that families (and counselors) who were unsophisticated or just not paying close scrutiny could easily believe they were on the official FAFSA site and spend money unnecessarily.

I applaud the Department of Education for taking over the web domain.  Not only does the decision serve the public interest, but this issue provides a counterpoint for those who believe that there should be no Federal presence in education and that the Department should be abolished. 

Abolishing FAFSA Order

In August the Department of Education announced proposed changes to the 2016-17 FAFSA. The most substantive of those changes is that colleges receiving a student’s FAFSA will no longer see the list of other colleges to which the student is sending the FAFSA.  Currently a student may send the FAFSA to up to ten colleges, and those colleges know the other colleges on the list.

The proposed change is in response to concerns about how that information is being used.  The FAFSA form does not explicitly instruct students to list colleges in rank order, but in recognition that a number of states use FAFSA order to disburse state grants, the instructions state, “For state aid, you may wish to list your preferred college first.”

But how do colleges use the order listed by students on the FAFSA?  Both NACAC and InsideHighEd.com have reported that at least some admission offices and consultants on enrollment and financial aid are trolling the data to judge a student’s interest in a given institution, and may make admissions and financial aid decisions based on a student’s FAFSA order.   Several studies suggest that 55-70% of students enroll at the school listed first on the FAFSA, and examples of how FAFSA order is used include leveraging financial aid, offering less institutional aid to a student who lists a school as number one and is therefore presumably likely to enroll, or protecting yield by wait listing a student who is qualified for admission but lists the institution lower on the FAFSA.  The latter practice could be a violation of federal law, which prohibits the use of FAFSA information for any purpose other than awarding financial aid.

So what are the ethical issues involved here?  The NACAC Statement of Principles of Good Practice prohibits colleges from asking students to rank their order of interest.  That’s not the case here, but the only thing worse than asking is making assumptions about interest based on a student’s FAFSA order when the student isn’t aware it’s being used that way.  That would be less of an issue if a student provides the order voluntarily, with full awareness of how it may be used. 

There are also ethical issues related to the leveraging of financial aid.  Is it ethical to offer less financial aid to a student because he or she is more likely to enroll, or more financial aid to a student who is less likely to enroll?  Those practices may serve an institution’s interest, but they also have the potential to harm public trust in the college admissions process.

I have seen suggestions that colleges knowing FAFSA order may benefit students, but I am unclear what those benefits might be, and invite readers to weigh in on potential positives for students and or institutions.

When my children were little, they had a hard time understanding the difference between want and need.  My son used “need” as a synonym for “want,” whereas my daughter added a third category, “really want,” as if really wanting something imposed an enhanced obligation on me to provide it.  I get that colleges want, and maybe even really want, the information they get from a student’s FAFSA order, but I question whether they need it.

The Department of Education is soliciting comments from the public until October 13.

Earlier FAFSA Timeline

Late Breaking News:  On Monday the White House announced that as of October 1, 2016 students will be able to complete the FAFSA using previous year tax information rather than having to wait until the end of the tax year. 

On the surface, that seems like a good move, but it’s too early to know.  I believe in the Law of Unanticipated Consequences, and as Jon Boeckenstedt points out in article on the Chronicle of Higher Education website this morning, this change could have major reverberations for college admissions and higher education.  Stay tuned.