Friend and colleague Carlo Salerno (@edanalyst) calls for eliminating FAFSA instead of simplifying it. I agree. Let’s do that. Let’s rely solely on the tax return for calculating the Estimated Family Contribution (EFC), Pell grant eligibility, and student loan eligibility. I see no reason for one agency to create and manage a complex form/endeavor with a black box calculation for EFC that relies on data that another agency collects, calculates, holds, and enforces. It is would be more efficient to do things this way, save money, and eliminate the need for some applications to be verified.
It also eliminates families sending detailed financial information to colleges before they can be told their price.
I have a dog in this fight. I have build a fair amount of reporting based on family income, including graduation rates. For example, we have published for two years now, graduation rates of students from families with incomes of $150,000 and above that pretty much demonstrate that the Pell Institute report that stimulated this blog post by Matt Chingos and Susan Dynarski was wrong on the face of it as the data could only be assumed to be irrelevant if Va was so unrepresentative. In fact, Virginia has just about the highest four-graduation rates of public institutions in the country.
I would be willing to give up access to these income data in pursuit of greater efficiency and less burden.
How would we calculate Pell eligibility?
Perhaps like this:
Pell Value – Total tuition and Fees, plus cost of text books, for most expensive public community college in nation.
0 to 200% of Federal Poverty Level – 100% (No income cut-offs, based on family size, 100% Pell for each family member in college).
EFC = 5% of family income above 150% of poverty level divided by number of family members in college.
201% to 400% of Federal Poverty Level – 50% of Pell for each family member enrolled in college, eligible for 100% of remaining need to covered by subsidized loans covered by PAYE.
EFC = 10% of family income above 150% of poverty level divided by number of family members in college.