Call for Simplified Student Aid
Today, US Secretary of Education, Arne Duncan, called for Congress to no longer include student and parent assets in the analysis of a student’s eligibility for federal student aid. This move has been researched and discussed for several years, but today was the first time the change was officially called for by the Department of Education.
Should Congress react favorably to the proposal the outcome for many middle and upper income families could mean a substantially lower expected family contribution toward the cost of college, and in some cases, depending on the cost of the college a student attends, an increase in federal student aid eligibility.
I was one of many college funding profesionals and education leaders in recent years who have made the trip to Washington to meet with Department of Education officials about this sort of change. The EFC Quick Reference Table that I have been creating for twelve years, and was published in this blog last year, was updated last week for the 2010-2011 academic year. This table was presented to Department of Education officials some years ago as an example of how simple the federal student aid analysis could be if assets were removed from the equation, and EFC based just on household income and demographics.
As such, it is a good preview of what a student’s EFC would be for the 2010-2011 academic year if the change occurs, as well as an estimate of an income-only EFC under current rules.
Our new Smart Search software utilizes a proprietary formula that dramatically reduces the amount of information needed to calculate a family’s EFC, and was designed to be capable of performing EFC calculations under the proposed rule change announced today. So if the proposed change becomes law it will simplify our software further.
We constantly strive to stay ahead of the curve, and that requires a constant watch on political, economic and legislative happenings around the country.