FAFSA4caster

On April 1, the U.S. Department of Education released the FAFSA4caster, an online tool intended to help families plan for college by providing early estimates of their federal financial aid eligibility. To get an early aid estimate, students and their parents have to answer 96 questions from the actual FAFSA. Positives: For students and parents who are not put off by the volume and complexity of questions in the FAFSA4caster, it will be a useful tool. It can give them a good sense of what they will be expected to pay towards college costs and what federal aid they may be eligible for. In addition, the data they enter will be used to pre-populate many elements of the full FAFSA when they are ready to officially apply for aid. This is a good use of technology that will allow aid applicants to pick up where they left off, rather than starting from scratch. Negatives: The FAFSA4caster requires students and parents to answer all of the most difficult and error-prone income questions that make the actual FAFSA so intimidating. You still have to track down all the tax documents, make various calculations, and transfer the answers from one form to another by hand. Suggestion: The way to make this tool easy and inviting is to significantly reduce the number of high-stakes questions that applicants have to answer themselves. That can be accomplished -- without diminishing the accuracy of the aid estimate -- by letting users authorize the IRS to answer 31 of the questions automatically. We encourage the Department to take this opportunity to simplify the FAFSA4Caster as soon as possible. Because the estimate it produces is non-binding, the Department could use whatever year of income data is available from the IRS at the time students and parents use the new tool. For more about how this approach could make the whole aid application process easier, see Going to the Source: A Practical Way to Simplify the FAFSA. FYI: To get a sense of how hard it is to create a simple aid estimation tool given the income data that applicants are currently required to provide themselves, see these valiant attempts by FinAid! and the College Board.

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