Navigating Our Shameful, Maddeningly Complex Student Aid System

This month, the federal government switched off a tool that student financial aid applicants used to import their tax data into forms, adding laborious steps to a process that the tool was supposed to simplify. The possibility of identity theft was the stated reason, big enough to shut down the tool in the middle of the busy season for people seeking aid.

No big deal, right? Well, it is if you’ve been tracking this whole blasted system of paying for college for a while. If you are in the thick of it now, or if you and your family will be entering it in the next decade or so, pop a Xanax as we discuss how this event symbolizes the sadness that so many education experts feel for the frustrated families that have to navigate it all.

First, a few words about that process. It’s not exactly a model of efficiency.

Retail prices for an undergraduate degree from public universities are high and can cross over into six-figure territory for tuition, room and board in some parts of the country. Price tags for private schools are much higher, approaching $300,000 all in.

The schools themselves will offer large grants to some, most or occasionally all students who can prove they cannot afford the list price. More than half of students qualify for this so-called need-based aid at some private institutions.

Other colleges will offer discounts (but refer to them as “merit aid”) to students who do not need the money but have really good grades. The catch? You get the money if the school feels it needs to raise the quality of its freshman class in order to appear more attractive to future applicants who can (the hope is) afford to pay more. Or maybe it needs to discount just to fill enough beds to balance its budget for the year.

The federal government becomes involved through the dreaded Fafsa form. You fill this out in order to qualify for the Pell grants that go to needier students, loans of all sorts and other programs. Schools and states may use Fafsa data, too.

See what is going on here? Prices go to the moon, such that the rack rate for many private colleges is $100,000 more than the median home price in the United States. Then we cut the bill in various ways through utterly complex processes that involve a lot of spreadsheeting, algorithms and consultants for higher education administrators and begging and haggling for families.

Lower-income students suffer disproportionately, and may give up or not bother trying — because of a lack of support, endurance or knowledge of the system, or all three, researchers have found. For more on this, read the searing indictment that one financial aid expert, Mark Kantrowitz, recently wrote, condemning the system for committing outright social-class discrimination.

Suffice it to say that this is generally not how paying for college works in the rest of the world. But, America! All of the questions on the financial aid forms and the checks and balances throughout our system are there merely to make sure that the truly needy get the most money. Right?

Even so, 153 questions was a lot to ask on the Fafsa back in 2009 when the Obama administration proposed some radical simplification. The president had campaigned on a platform of eradicating the Fafsa altogether and replacing it with a box on tax forms that people could check to export data to the college aid deciders.

Two important steps toward simplification emerged. The first was the introduction of that Internal Revenue Service tool, which is now suspended for some indeterminate amount of time.

The big idea behind it was to make sure the Fafsa data matched the tax-form data and no mistakes or fraud occurred along the way. If you could simply suck the I.R.S. data into your Fafsa, errors would be unlikely, and you would stand a much lower chance of going through a noxious verification process that many students endure. People with federal student loan debt also use the tool to qualify for income-based repayment programs.

This was swell until it stopped working this month. There was no explanation for days. Then came a statement saying that there was concern about possible misuse by identity thieves. On Thursday night, The Wall Street Journal reported that there was indeed criminal activity of some sort. Pop another Xanax! And follow the instructions to supply the information manually, which once again could increase your odds of being subject to that verification process.

The suspension of the tool creates a hitch in the second improvement to the system in recent years: a change that allowed people to apply for aid using the previous year’s tax information. Before the change, applying for aid this month might have been hard, because you might not have done your 2016 tax returns yet and thus would not have been able to supply accurate income data. The change meant you could use 2015 data instead.

But if you cannot get easy access to your 2015 data and transfer it because the online tool is unavailable, that gums up the works and causes the process to take longer.

“Just at the moment when everything seemed like it was going in the right direction, the rug gets pulled out, and in the middle of the application season,” said Judith Scott-Clayton, associate professor of economics and education at Teachers College of Columbia University, and a longtime advocate of simplification. “Why? Why?”

To the upper-middle-class family trying to get a 15 percent price break from Georgetown, the extra steps might feel like a nuisance. But they can break the back of a low-income student whose parents will not help, or do not understand or are suspicious of the process.

As we are learning with health insurance, complex systems are extremely hard to undo, and merely simplifying them isn’t easy either. But people on both sides of the political aisle are trying. Senator Lamar Alexander, Republican of Tennessee (who is a former secretary of education), and Senator Michael Bennet, Democrat of Colorado, are fans of a two-question Fafsa that would fit on a postcard.

Lindsay Page, an assistant professor of research methodology at the University of Pittsburgh School of Education, and two colleagues recently published a paper promoting the positive results from using text messages to nudge students into completing their forms and verifications. In an interview, she also talked about the promise of guidance through artificial intelligence, with a human counselor on standby if necessary.

One especially good idea that Professor Scott-Clayton of Columbia favors is to send notice of financial aid eligibility, based on income tax data, to a family in a student’s early high school years — in the same way that Social Security lets you know what size check you might get at retirement age. That could offer encouragement to people who might otherwise assume that college is financially out of reach, simply because they don’t know how the system works.

“There is no reason not to do this, other than the fact that doing anything seems really hard in this political context,” she said.

There is one crucial caveat, however: For all we might do to make the system easier to understand and navigate, it would not change the fact that there is often not enough aid money to make college affordable for all students who would apply or actually end up doing so. Sara Goldrick-Rab, a Temple University professor and the author of a book about college costs called “Paying the Price,” made this crucial point in a post on Medium last year.

This is our shame. So is our complex system. Changing it will probably take time, given how far we’ve dug ourselves in. If you have a child who is already walking and talking and you will not be able to write a check to pay tuition, it’s best to start studying up on it now or finding a political candidate to support who will blow it all up.