White House tweaks federal financial aid rules

The Obama administration on Monday announced a tweak to the federal financial aid program that one official said would help “literally hundreds of thousands” of students each year.

Obama and Education Secretary Arne Duncan will formally announce the change at a town hall meeting in Iowa, where they will meet with high school juniors and seniors. The announcement is part of a weeklong effort highlighting Obama’s work on higher education.

Starting next year, college applicants and their families will have more time to complete the financial aid form known as the FAFSA, or Free Application for Federal Student Aid. Duncan said the move would help enroll more low-income students, who were previously deterred by the burdensome process, at schools nationwide.

Duncan said it will now take only 20 minutes to complete the form, compared to past years, in which “you almost had to have a degree in accounting to complete it,” he said.

“We believe literally hundreds of thousands of additional students will actually gain access to critical student aid each year,” he said.

The programs outlined by Obama this week are part of a far less-ambitious education agenda than he previously envisioned.

On Saturday, Obama announced the long-awaited College Scorecard program, which allows students to search online for universities based on a number of return-on-investment metrics, such as the average income of graduates. That data is not currently made public for all universities, and the program will include a partnership with the Internal Revenue Services.

Early in his second term, Obama laid out far-reaching plans for a rating system that would have scored colleges based on tuition costs, loan debt, graduation rates and graduate earnings. He ultimately hoped those scores would be used to determine how much money a college received from the federal financial aid pool.

The plans drew sharp criticism from university leaders across the country who feared decreasing amounts of federal dollars if they fell behind in certain metrics. The controversial plan was also largely rejected by Congress, which would have had to pass legislation formalizing the changes.

Duncan said he is still eyeing changes to the FAFSA that would need to be approved by Congress. The administration has long sought to eliminate questions on income so as to simplify the forms.

“We’re not done. We want Congress to continue to work to simplify the form even further,” Duncan said.