Saturday, January 11, 2020
The state of financial aid part 1, or...
Richard Nixon is the reason I'm employed.
In the nearly 15 years I've been writing this blog, I've made various predictions concerning the direction of financial aid, what those changes might mean for my job, and the impact on the profession overall. Proclaiming that X will happen and will result in Y is a dangerous practice, leading to looking stupid. Hopefully, I've avoided that, but eventually something had to happen to prove or disprove my theories. It's not as if the situation has been static up to now, but I'll count 2019 as the tipping point where at least two of most important predictions are about to come true, with another situation getting much worse. On the other hand, I was off base or simply wrong as well. Conveniently, the predictions occupy a separate facet of my job: federal, state, and the college itself. These do affect one another, but I'll examine each on its own until tying everything together in the epilogue. The fact that I just turned 49 may be coloring my perceptions on these issues, but I'm counting that as a positive. With that, I'll begin with the Department of Education.
Federal aid has gone through some serious changes over the years, but aside from the now defunct ACG, they were tweaks of the present system, and one of my main concerns was the inevitability of automation and with it, my job's irrelevance. This is hardly a bold statement; all jobs will eventually be irrelevant because of automation to the extent government allows it. 2019 is the year when that prediction came true on the federal level, though the specifics are still hazy. Before I explain what's changing, I should cover the FAFSA current structure and the reasons behind it.
First, the FAFSA, in it's present form, shouldn't even exist. It's central function is actually to inform the student of why he or she cannot get financial aid: immigration status, being in default on a student loan, etc. Almost all of the personal and financial information requested on the form is already in the hands of the federal government, save perhaps the number of people in the household and how many people are in college, but you still have to enter all this information. Why is that? Certainly there's always the possibility of identity theft or other forms of fraud, but the required fields have existed long before that type of crime was a concern, so that's not it. Privacy is an issue, especially for your social security number, but that's not the main reason either. It's because of Richard Nixon.
Although he wasn't the only president to do so, no one weaponized the IRS more than Nixon, in his infamous "Dirty Tricks" campaign against his lengthy enemies list. The scandal resulted in a wall between the IRS and the rest of government. This wall does have exceptions: Social Security gets your income data from the IRS, and if the agency audits your tax returns, it will let your state know so it can audit you as well. Naturally, this is a disaster for New Yorkers. The Data Retrieval Tool allows the IRS to populate the income portion of the FAFSA, but since it's optional and clunky and I kind of hate it anyway, I skip the step and enter the info myself when I'm helping someone.
The key is that using DRT is optional, fairly complicated, and applicants often fail when trying to use it. It's easiest when you have your forms in front of you, which kind of defeats the purpose. Despite all this, and my own feelings about the process, using the tool is actually quite useful. Since the IRS is entering the info, mistakes are far less common, and if the student is chosen for verification, I only need to collect a verification worksheet and the W2 forms(s). Corrections are far less likely, so people get awarded, on average, much more swiftly.
I don't have all the details yet, but a major change is coming with the 2020-21 FAFSA. Roughly 20 income related questions will be eliminated, and all that data will be entered by the IRS. I won't have any specifics until March 27th, but my best hunch is that the Dept of Ed (DOE). with forward the request to the IRS, which will enter the info, then send it back to the DOE to determine the Expected Family Contribution (EFC), which is then sent to the student. If you use the DRT, the exchange is automatic, so that should be goal here. This change was negotiated amongst the various agencies and Congress, but I have a feeling that the IRS may be a little obtuse, and the processing will be delayed, at least in the beginning. I liken it to the transition from the paper FAFSA to the electronic form. When it was first introduced, using the paper application and mailing it was safer, more efficient, and often faster than applying online. The bugs were worked out quickly; the online form became by far the best way to apply, and the paper version was all but eliminated.
What this will mean in terms of our workload is unknown, but that won't stop me from speculating. The effect will be minimal at first, as people won't be expecting the change. It took a few years for the electronic FAFSA to become the norm, but I expect people to get used to this much more swiftly. It's a major change for financial aid offices, but it is far less of a change for applicants. People will go online, and answer fewer questions than before. This could cut down on students getting selected for verification, but if not, the process will be much simpler, since everyone will be effectively using the DRT. Either way, the change has major implications for our workload over the long term. The Feds will still give us work: loans, checking citizenship, Selective Service, and professional judgements, where I look at the applicant's present financial situation and see if it changed dramatically. Regardless, verification is the bulk of our work, though not my work, if that makes any sense. That serves as the transition to part 2: New York State.
In the nearly 15 years I've been writing this blog, I've made various predictions concerning the direction of financial aid, what those changes might mean for my job, and the impact on the profession overall. Proclaiming that X will happen and will result in Y is a dangerous practice, leading to looking stupid. Hopefully, I've avoided that, but eventually something had to happen to prove or disprove my theories. It's not as if the situation has been static up to now, but I'll count 2019 as the tipping point where at least two of most important predictions are about to come true, with another situation getting much worse. On the other hand, I was off base or simply wrong as well. Conveniently, the predictions occupy a separate facet of my job: federal, state, and the college itself. These do affect one another, but I'll examine each on its own until tying everything together in the epilogue. The fact that I just turned 49 may be coloring my perceptions on these issues, but I'm counting that as a positive. With that, I'll begin with the Department of Education.
Federal aid has gone through some serious changes over the years, but aside from the now defunct ACG, they were tweaks of the present system, and one of my main concerns was the inevitability of automation and with it, my job's irrelevance. This is hardly a bold statement; all jobs will eventually be irrelevant because of automation to the extent government allows it. 2019 is the year when that prediction came true on the federal level, though the specifics are still hazy. Before I explain what's changing, I should cover the FAFSA current structure and the reasons behind it.
First, the FAFSA, in it's present form, shouldn't even exist. It's central function is actually to inform the student of why he or she cannot get financial aid: immigration status, being in default on a student loan, etc. Almost all of the personal and financial information requested on the form is already in the hands of the federal government, save perhaps the number of people in the household and how many people are in college, but you still have to enter all this information. Why is that? Certainly there's always the possibility of identity theft or other forms of fraud, but the required fields have existed long before that type of crime was a concern, so that's not it. Privacy is an issue, especially for your social security number, but that's not the main reason either. It's because of Richard Nixon.
Although he wasn't the only president to do so, no one weaponized the IRS more than Nixon, in his infamous "Dirty Tricks" campaign against his lengthy enemies list. The scandal resulted in a wall between the IRS and the rest of government. This wall does have exceptions: Social Security gets your income data from the IRS, and if the agency audits your tax returns, it will let your state know so it can audit you as well. Naturally, this is a disaster for New Yorkers. The Data Retrieval Tool allows the IRS to populate the income portion of the FAFSA, but since it's optional and clunky and I kind of hate it anyway, I skip the step and enter the info myself when I'm helping someone.
The key is that using DRT is optional, fairly complicated, and applicants often fail when trying to use it. It's easiest when you have your forms in front of you, which kind of defeats the purpose. Despite all this, and my own feelings about the process, using the tool is actually quite useful. Since the IRS is entering the info, mistakes are far less common, and if the student is chosen for verification, I only need to collect a verification worksheet and the W2 forms(s). Corrections are far less likely, so people get awarded, on average, much more swiftly.
I don't have all the details yet, but a major change is coming with the 2020-21 FAFSA. Roughly 20 income related questions will be eliminated, and all that data will be entered by the IRS. I won't have any specifics until March 27th, but my best hunch is that the Dept of Ed (DOE). with forward the request to the IRS, which will enter the info, then send it back to the DOE to determine the Expected Family Contribution (EFC), which is then sent to the student. If you use the DRT, the exchange is automatic, so that should be goal here. This change was negotiated amongst the various agencies and Congress, but I have a feeling that the IRS may be a little obtuse, and the processing will be delayed, at least in the beginning. I liken it to the transition from the paper FAFSA to the electronic form. When it was first introduced, using the paper application and mailing it was safer, more efficient, and often faster than applying online. The bugs were worked out quickly; the online form became by far the best way to apply, and the paper version was all but eliminated.
What this will mean in terms of our workload is unknown, but that won't stop me from speculating. The effect will be minimal at first, as people won't be expecting the change. It took a few years for the electronic FAFSA to become the norm, but I expect people to get used to this much more swiftly. It's a major change for financial aid offices, but it is far less of a change for applicants. People will go online, and answer fewer questions than before. This could cut down on students getting selected for verification, but if not, the process will be much simpler, since everyone will be effectively using the DRT. Either way, the change has major implications for our workload over the long term. The Feds will still give us work: loans, checking citizenship, Selective Service, and professional judgements, where I look at the applicant's present financial situation and see if it changed dramatically. Regardless, verification is the bulk of our work, though not my work, if that makes any sense. That serves as the transition to part 2: New York State.
