Policy

Financial Aid Offices Burdened with Compliance, Seek Federal Relief

• By Dian Schaffhauser
• 04/23/15

Paperwork related to regulation is impairing the ability of financial aid staff to help college students. That's the conclusion in a report aptly named, "2015 Administrative Burden Survey," produced by the National Association of Student Financial Aid Administrators (NASFAA). The organization surveyed its members, all working as financial aid administrators in colleges and universities.

Based on information from the 2013-2014 award year, about three in four respondents indicated that the amount of aid disbursed had increased and nearly six in 10 said they believe the number of aid applicants had increased. In spite of those increases, three-quarters of respondents said their staff size has either remained constant or declined in the past five years.

Forty-seven percent reported either a moderate or severe shortage of resources. Almost across the board, the most common resource constraint cited was a lack of counseling staff. That was followed by insufficient support staff, limited operating budget, responsibilities beyond the core mission of the financial aid office, lack of technical training and insufficient technology.

According to the survey, financial aid people pinned their resource constraint woes first on a "greater compliance workload" and, second, on budget. The increase in additional Title IV requirements and the number of applicants were almost tied for third place.

Respondents were asked to identify where their services showed the greatest impact from those shortages. The top responses were face-to-face counseling (68 percent). phone contact (66 percent), loan counseling (64 percent), outreach efforts (64 percent) and focusing on targeted populations (61 percent).

According to the report's authors, their findings "indicate" that students are the ones who feel the brunt of gaps, "likely experiencing reduced access to financial aid office services, largely due to a prolonged increase in administrative burden and an environment characterized by limited operating resources."

"When financial aid offices are strained, it is students who suffer the most," said Justin Draeger, president and CEO of NASFAA. "Colleges that shortchange the financial aid office are ultimately putting their own students at risk."

Draeger added that Congress and the Department of Education could take some "common-sense policy avenues" to address the problems faced by financial aid offices and the students they serve.

• Determine study aid eligibility not by looking at the previous year's family income but by going back two years, which would give applicants a longer period in which to complete their applications;
• Give financial aid administrators the authority to limit loan amounts for certain broad categories of students to prevent them from taking out "unmanageable debt";
• Eliminate all non-financial aid related questions from the application process, such as those related to Selective Service registration status or convictions for some drug offenses;
• Mandate a federal early commitment program for the federal student aid programs. This was attempted though never funded in the Higher Education Opportunity Act of 2008, the report said;
• Streamline consumer information requirements. Right now, the report's authors stated, "the number and specificity of student consumer information disclosures, and how they must be provided, have expanded to a point where students and families are overwhelmed, and unable to identify the information is that is actually important." Better targeting of those, the report noted, would "reduce burden on schools and make the disclosures more meaningful to students";
• Simplify the return of Title IV funds process when a student withdraws;
• Revamp and make more transparent the process for estimating the burden of new federal regulations and include "burden estimates" in the rulemaking process; and
• Develop a ceiling for the amount of burden the Department of Education can impose.