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This report contains a correction.

The Free Application for Federal Student Aid (FAFSA) has become a ubiquitous part of the college-going process. In 2017, 17 million students completed the form, receiving more than $122 billion in federal student aid.¹ While the FAFSA provides access to college financing for millions, it often comes at a price, representing one of the many hurdles students must overcome before they even step foot in a college classroom.

The FAFSA has been around for almost 30 years, changing over time to reflect politics, national priorities, technological innovations, and the composition of the student population. For example, in 2004 it was made available in Spanish to accommodate a growing population of Latinx students.² What has not changed, however, is the reality that the form has never been easy to complete. It has more than 100 questions, many of which ask detailed information about income and assets that can only be answered by plumbing tax return data.

While the FAFSA allows all students to access loans, it is particularly vital for low-income students to complete the form, as it provides them with access to the federal Pell Grant. This aid, which totals $6,095 in the 2018-19 school year, can mean the difference between enrolling and forgoing a college education. Research shows that hundreds of thousands of low-income students are tripped up by the form each year, failing to complete the application and verify their information as the first day of class approaches.³ For many, this means their chances of enrolling in college, let alone completing, are slim.

Over the past decade, policymakers on both sides of the aisle have singled out the FAFSA for reform, often noting the cumbersomeness of the process.⁴ In particular, Sen. Lamar Alexander (R-TN), the current chair of the U.S. Senate Committee on Health, Education, Labor and Pensions and the former secretary of education under President George H. W. Bush, has turned the FAFSA into a frequent prop, unfurling a paper form on more than one occasion, the pages trailing down to the floor.⁵ While he has pushed to make the FAFSA a two-question form that could fit on a postcard, the U.S. Department of Education has taken more modest steps, implementing changes that allow families to skip questions that do not apply to them and import their tax data directly from the IRS.⁶

While shortening the FAFSA is a worthy effort, it fails to address another key way the form can burden families: its frequency. Students receiving federal aid must complete the FAFSA each year, a process that represents a significant investment of time and resources for families, institutions, and the federal government—regardless of its length.

An annual FAFSA can create three issues for students. First, students may be required to go through a significant amount of unnecessary paperwork in order to receive the exact same aid they received the year prior. Second, they may take annual reapplication as a signal that their aid is not stable, leading them to question if they can afford to complete a degree. Finally, an annual FAFSA opens up opportunities for students to miss deadlines, putting their aid in jeopardy.

For colleges and the federal government, an annual FAFSA means a lot of resources spent processing forms, correcting errors, and answering questions. Were annual renewal not required, the government could better direct these federal expenditures to need-based aid and institutional support, and college administrators could instead spend time providing meaningful financial aid counseling to students.

With college students citing finances as the top reason for dropping out of school,⁷ it is worth asking if the FAFSA requires an unnecessary level of year-to-year precision in calculating a family’s ability to pay for a college education. Instead, could students complete the FAFSA once, when they first enroll in college? A one-time FAFSA would greatly simplify the aid application process while balancing the desire of the federal government and colleges to collect information they deem necessary to award aid. In the end, students could be guaranteed a simpler process and more stable financial aid.

This idea is not a new one. Researchers Sara Goldrick-Rab and Robert Kelchen called for a one-time FAFSA in 2013,⁸ noting the harm FAFSA renewal can cause low-income students. A few years later, Democrats on the U.S. House Committee on Education and the Workforce proposed the File Once FAFSA Act of 2016 but limited the legislation to dependent students whose incomes are low enough to make them eligible for a Pell Grant. Though this policy could have a positive impact, it leaves out independent students, who comprise half of the undergraduate population and almost 60 percent of Pell Grant recipients.⁹

To determine if a one-time FAFSA could be implemented and who it would most help, the Center for American Progress worked with 27 colleges around the United States to gather data for nearly a quarter of a million students who filled out the FAFSA at least two times. The analyses of these data focus on how much students’ expected family contribution (EFC) figure varies from the first year they filed and seek to understand the causes of larger variations in EFC.

The results show that for half of all students in the study who applied for aid, EFCs changed by $500 or less for the duration of these students’ enrollment. EFCs were even more stable among specific populations who were most likely to receive need-based grant aid such as Pell Grants, 70 percent of whom saw an EFC change of only $500 or less. The picture looks similar for independent students, who are largely adults. Sixty-eight percent of independent students saw an EFC change of $500 or less while enrolled. Students with dependents of their own were even more likely to have stable EFCs: Three-quarters saw no change in their EFCs while they were enrolled.

In fact, the students most likely to see a significant EFC change started college with an EFC too high to qualify for need-based federal aid, such as Pell Grants. For them, the FAFSA may be capturing EFC changes that have no bearing on the amount of federal grant aid they receive. These students may have only completed the FAFSA to receive federal student loans that are not awarded based upon financial need or to seek state or institutional assistance.

These findings suggest that a one-time FAFSA could be implemented for all students, which would yield universal benefits to students and colleges. Communication of the policy would be clear, and everyone who interacts with the form would experience a reduction in burden. Although a one-time FAFSA could be targeted to low-income or independent students, as they have the most stable EFCs, doing so would cut into the benefits of the policy and create confusion for students. If policymakers want to think big about simplifying aid, they must see the bigger picture—not just focusing on questions, but also on the form as a whole.

Each year, the federal government provides more than $122 billion in aid to undergraduate students. In 2017, that represented $27.7 billion in Pell Grants, Supplemental Educational Opportunity Grants, and other gift aid; $949 million in the federal work-study program; and $93.8 billion in federal direct and Perkins loans.¹⁰ Many of these programs, including all grant and work-study funds, are allocated to students based on their financial need.

The federal government determines who has financial need by calculating the annual EFC for every student who applies for financial aid. The EFC is derived from information submitted on the FAFSA. The form collects information on a prospective student’s demographic characteristics, such as their age and gender, as well as data related to a student’s family size and composition, income, assets, federal means-tested benefits received, military service, and savings. All of these figures are inputted into a complex series of formulas known as need analysis, which determines the amount of assets and income that a family can put toward college.

The EFC determines whether a student is eligible for financial aid and, if so, the maximum amount they can receive from the federal government in a given year. For example, if a student has an EFC of $0, then they are eligible for the maximum Pell Grant, which is currently $6,095 a year. If a student’s EFC is $1,950, then they are only eligible for $4,145 from the Pell program.¹¹ By contrast, if a student’s EFC is $19,500, then they are not eligible for need-based grant aid.

Despite its name, the EFC does not dictate what a family is expected to pay for college; it is not binding on the student or institution. Thus, if a student with a $0 EFC only receives $6,000 in grant aid but faces a price tag of $10,000, the student is expected to make up that $4,000 difference through other means. Effectively, the EFC acts as an eligibility indicator for need-based aid programs rather than a cost estimate upon which families can rely. Unfortunately, this plays out worst for the lowest-income students; in 2016, students with a $0 EFC faced college costs that totaled, on average, 70 percent of their income.¹²

The FAFSA is not only responsible for providing federal grants; it is also often used to determine who receives state and institutional grants. At least 35 states and one U.S. territory¹³ use FAFSA data to determine a student’s eligibility for need-based grants, which totaled nearly $9 billion in 2015.¹⁴ Colleges also use the FAFSA to better understand student’s financial situations and, often, the amount of institutional grant aid that they will receive. In the 2015-16 school year, college grant aid totaled more than $11 billion for first-time, full-time college students, though it is difficult to know how much of that aid was awarded on the basis of need and was based on data from the FAFSA rather than other aid application forms.¹⁵

The FAFSA is a long-standing thorn in the side of students not just because of its complexity, but also because it must completed each year. Updated income, asset, and family size data are used to derive a new EFC, which can produce several issues.

First, there is the issue that some students are unaware of the need to file the form each year. Research has found that about 16 percent of first-year students who received a Pell Grant do not refile the FAFSA, and those students also have a high risk of not returning for a second year.²⁵ Moreover, even if outreach campaigns reach these students, it can be too late. Several states and colleges have firm reapplication deadlines, and if aid is awarded on a first-come, first-served basis, students who file late may lose out on aid that they received the previous year.

Second, annual FAFSA renewal represents a significant burden for students whose EFCs may not change much, if at all. For example, a student could have a $0 EFC year after year, yet is still required to present information repeatedly proving their circumstances are the same. This represents not just a burden for the student, but also for aid offices, which must collect and process FAFSA data annually.

Third, annual FAFSA renewal costs institutions and the federal government significant resources. An estimate conducted by economists in 2008 conservatively placed the cost of FAFSA administration and compliance at $4 billion per year.²⁶ This outlay of time and money can be better spent on additional funding for need-based grants or providing more time counseling students.

Finally, students may be required to go through the process of confirming their FAFSA data even after they submit the form correctly. This process, known as verification, can be onerous on students and financial aid offices, which must coordinate the verification of data. Students must submit additional documentation proving their income information, which can be particularly daunting for students and families who are not required to file income taxes due to their low-income status. Every year, the Department of Education selects up to 30 percent of students, but the burden is felt most by low-income students, about half of whom must complete verification to receive aid.²⁷ Based on some estimates, up to 22 percent of Pell Grant-eligible students do not complete the aid application process due to verification.²⁸ Were students required to do the FAFSA just once, they could be spared the burden of this process and have access to stable year-to-year aid.

The FAFSA makes federal financial aid an inherently unstable source of financing for students, because they do not know if their EFC will remain the same from year to year and, thus, if they will receive the same aid each year. As college costs increase and policymakers turn their attention toward providing students with better access to affordable postsecondary options, many advocates, researchers, and policymakers have advocated for a simpler FAFSA application. But these discussions focus more on the number of questions on the form rather than the bigger picture: What if the federal government only required students to complete the FAFSA once?

To date, most simplification efforts have focused on drastically reducing the number of questions on the FAFSA. Sen. Alexander has even proposed a two-question form, which would only ask for family size and adjusted gross income.²⁹ However, such shortened forms risk unintended consequences that could have deleterious effects on students. In an absence of more information, institutions or states could start requiring additional aid applications, which would do nothing to reduce the paperwork burden on students—and, for that matter, on institutions. It would also reduce the amount of information the federal government collects on students and families who use the aid program, which can provide valuable insight into the demographics of the college-going population and how it is changing.

A one-time FAFSA would remove much of the administrative hassle for students, colleges, and the federal government, as well as ensure that students receive consistent access to aid for the duration of their enrollment. This change represents an alternative to having a form that only asks a few questions and instead leaves in place the system that exists today. As an added bonus, savings from moving to a one-time FAFSA could be funneled into providing better supports for low-income and other underrepresented students.

Of course, there are a number of questions that arise with a one-time FAFSA. If students have relatively stable EFCs while enrolled, then a one-time FAFSA would not levy many, if any, costs to the federal government, states, or schools, as it would not make much difference in the year-to-year amounts that are awarded. But significant annual variation in EFCs would make the policy more challenging, because some students would receive too little aid based on their actual eligibility while others receive more.

To gauge the viability of a one-time FAFSA, this report uses data covering nearly a quarter of a million students to look at how much EFCs change over time. Though this sample is not nationally representative, it does provide a sizable base to see the extent to which EFCs change from year to year. The report also breaks down what factors cause EFCs to vary, which will help assess whether policy tweaks could solve some issues with a one-time FAFSA. Finally, this report concludes with a discussion of how a one-time FAFSA could be implemented, with a variety of options to target certain groups of students.

The data used in this report were provided by 27 colleges that span the public two-year, public four-year, and private nonprofit four-year sectors. The analyses presented are based on FAFSA data from more than 236,000 students who completed more than one FAFSA between 2010 and 2017.³⁰ These data allow calculations of how students’ EFCs vary over time from a their initial EFC upon enrollment and allow for additional exploration into what drives those changes.

This report provides an exploratory analysis of how EFCs change from year to year and investigates which groups of students are the most likely to have stable EFCs. The sample of students and colleges is not representative, so the findings in this report may not reflect the overall FAFSA-filing population. Should the federal government provide a more representative sample of data, these analyses can be replicated and built upon to determine the feasibility of a one-time FAFSA policy.

Tables 1 and Figure 1 identify how the colleges and students included in this study differ from the overall college-going population who applied for aid in 2012. Due to overrepresentation of community college students, there are more Pell Grant-eligible students in this study. Dependent students are overrepresented as well, likely because many of the public four-year colleges included are selective, thus they educate fewer independent students than do public regional comprehensive colleges.

Half of students in the study completed FAFSAs for just two award years. It is difficult to know how this maps to the overall population of students, as similar data are not available. Table 2 shows that 62 percent of community college students completed just two FAFSAs, whereas 39 percent of public four-year students and 53 percent of private nonprofit four-year students completed four FAFSAs. These differences are likely tied to the nature of the programs offered by these schools, with four-year colleges offering predominantly bachelor’s degrees while community colleges offer more associate, certificate, and transfer programs.

These multiple years of data represent students beginning at different times. For example, when analyses are conducted on a student’s initial FAFSA, some of those initial FAFSAs were filed in 2010, whereas others were filed in 2013. To determine average changes in EFC, the author calculated the year-to-year differences in EFC, then averaged those differences.

Three groups of interest

Although this report explores the feasibility of a one-time FAFSA for all students, it particularly focuses on three often overlapping types of students who most stand to benefit from a one-time FAFSA:

• Independent students: These are students whom the federal aid system assumes are paying their own way through college. Thus, their parent or guardian’s financial information is not considered by the FAFSA. An independent student is someone who is an undergraduate older than age 24 or who is married, has dependents of their own, or who has served in the military. Students in certain dire circumstances, such as those who are homeless, orphans, or wards of the court, are also classified as independents.³¹
• Pell Grant recipients: These students have a low EFC, which qualifies them for this need-based grant. Although thresholds for a maximum Pell Grant-eligible EFC change each year, in the years studied, this generally referred to students with EFCs of $5,000 or less. There is an inverse relationship between EFC and Pell Grant eligibility, with $0 EFC students receiving the most grant eligibility—typically about $5,000 in each of the years studied.
• Students with a $0 EFC: These students are eligible for a maximum Pell Grant award. Although they are also represented in the Pell Grant recipients group, they need to be considered separately, because they have been determined by the federal need analysis formula to have no resources to contribute to paying for college costs. This group also represents somewhat of a catchall for students with the most need, as EFCs cannot be negative numbers.

These groups are the most likely to be affected by a one-time FAFSA, as they are the recipients of nearly all federal grant aid, as opposed to the students who fill out the form just to gain access to student loans that mostly do not depend on financial need. The groups of students noted here are also the most likely to benefit from decreased burden and stable funding. Independent students have lower completion rates compared with dependents; about one-third complete a credential within six years of enrolling, while more than half of dependents do.