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Panel proposes changes to financial aid system

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Posted: Tuesday, September 23, 2008 12:00 am

A panel from the College Board has proposed dramatic changes to what is now one of the biggest concerns to some college students and their parents - the government's financial aid system.

According to a survey by the National Education Association released Friday, 70 percent of college parents said making college more affordable will be an important issue when they cast their ballots during the upcoming election.

Michael Heaney, a UF assistant political science professor, said the problem stems from a recent decrease in wages, which has left many people unable to find enough money for big-ticket items, such as a college education.

"College tuition is part of a large market basket of goods that people are discovering they can no longer afford to buy," Heaney said.

The panel, called Rethinking Student Aid, has proposed a number of changes to the government's financial aid program that aim to ease parents' apprehension.

The panel strives to make the application process simpler and available for low-income families.

Director of UF Student Financial Affairs Karen Fooks said she supports most of the proposals, but only conceptually.

"Anything that makes the process easier for needy students to get a college education is a good idea," Fooks said.

She added that the proposals are only ideas, and they would probably change before being considered.

"None of these changes stand any chance of happening in the near future, maybe ever," she said.

Among its proposals, the panel called for an elimination of the Free Application for Federal Student Aid, also known as FAFSA, due to its "daunting complexity." Instead, the government would receive all information from the IRS.

Fooks said FAFSA's application can be intimidating to low-income parents, especially those who do not have a college education, are not fluent in English or are not computer literate.

She also said the elimination of FAFSA, though proposed with good intentions, could cause an over-simplification of the application process and result in manipulation by people who would not normally be considered needy enough to receive benefits.

"Anything that encourages more people to get into the pipeline is a good thing," she said. "We just have to make sure it does not become open to abuse."

Another plan under the proposed financial aid system would allow students to pay off their loans based on their income after college instead of their parents' income.

Considering the different income levels that students receive when they finish college, Fooks said this method provides a fairer and more practical repayment method.

If the panel's proposals are approved, students would be able to use their tax credits - which take money directly off of tax bills - toward expenses beyond tuition, such as housing.

However, Fooks said this money should be put in a place where it is more readily accessible to students.

"We would rather see this money go directly into financial aid, where students have the money they need when they need it," she said.

The panel also proposed that the government offer tax-free college savings accounts for children from low-income families. The government would contribute money to each account every year until the recipient turns 18.

Low-income parents often decide early on that college is not an option for their children, Fooks said. The savings account would send the message that anyone can attend college, regardless of their income.

"It's another very good idea," Fooks said. "Economically, this is just not the time to consider something like this."

She said there are other things that the country has to tackle before considering the proposals.

"We have a lot bigger fish to fry," she said.

Welcome to the discussion.