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Tangled up in FAFSA: Aid red tape run amok

The federal government recently unveiled a simplified Free Application for Federal Student Aid.

A new report from the Institute for College Access and Success suggests, though, that students still face considerable difficulty after they have filled out the form.

The report, "After the FAFSA," finds that some students apply for federal Pell Grants but never receive them because their applications get bogged down after being "flagged" for further review. Once flagged, applications are more likely to go unfinished.

In a sampling of 13 California community colleges, the study found that students whose applications were held up for "verification" -- a process by which colleges double-check information on the form -- were less likely to eventually receive aid than students whose FAFSA forms were not flagged.

The study examined 44,329 applications that were eligible for Pell grants. Of that group, a little over half were flagged for verification purposes.

Sixty-three percent of applications "flagged" were ultimately funded, compared with 68 percent of applications that were not flagged.

The 13 colleges spent about $2 million chasing paper in an effort to verify documentation. And while the verification process is clearly important, only a tiny fraction of applicants were disqualified from Pell funding for submitting incorrect information.

Debbie Cochrane, the report's author, concludes that "what happens after FAFSA is most costly for low-income students and the colleges that serve them, and can leave otherwise eligible students without the aid they need to succeed."

The Department of Education has proposed a rule change intended to reduce FAFSA paperwork (it is a bit too complex to explain in this space), but this study suggests that the change would actually worsen the problem by increasing the number of applications to be screened at many colleges.

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By Daniel de Vise  |  July 30, 2010; 5:31 PM ET
Categories:  Access , Aid , Community Colleges , Finance , Public policy , Research  | Tags: FAFSA, FAFSA study, ICAS study, college access study, student aid study  
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