Lately I’ve been administering our FAFSA twitter account, and noticed that a LOT of people are talking about the FAFSA and musing aloud why it’s so hard. Here’s why: the FAFSA is designed to be complex and ask a ton of very detailed questions for one reason alone:
To discourage fraud.
See, the FAFSA is the gateway to a limited pool of money set aside by the government in order to help families pay for college. That pool includes scholarships, grants, and subsidized student loans like the Stafford loan. Because that pool of money is limited, everyone and their cousin wants to get a piece of it.
Now here’s the twist: as with any system, there are loopholes in the FAFSA. Originally, it was a much simpler, much less complex form. What happened? Wealthy families hired really good accountants and financial planners to figure out all of the loopholes in an hour or so and then restructure their finances so that their kids – who didn’t need the money – would appear dirt poor on paper and get free money from the government.
For example, there used to be a provision prior to 1992 on the FAFSA that said if you were self supporting for two years, you could claim independent status and qualify for a lot more financial aid. Well, no surprise, the paid financial consultants of the rich got their kids all set up as independents and leeched a lot of money out of the system that should have gone to legitimately needy families. That provision was revoked, making it harder for those accountants to do it again. This frustrates kids who are legitimately self supporting but are still classified as dependent students, and understandably so, but the alternative is to have much less money available for everyone.
This is why the FAFSA is as complex as it is today, and why we need to take FAFSA simplification efforts both seriously and cautiously, so that we don’t inadvertently make it easier for people who don’t need the money to get at it. The alternative is that we just crank up taxes on everyone really high and make education free, but 70% of every paycheck goes to the government.
If you’d like help making the FAFSA easier, check out our free FAFSA guide eBook. It’s written to walk you through each of the questions on the FAFSA and explain in plainer language what the question is really asking you. Be sure to also check out our free college scholarships program while you’re at it.