The Rethinking Student Aid panel, an independent group of the country's top financial-aid and higher-education experts, has released a proposal to simplify the federal financial-aid system.
Proponents hope the plan - which was in the works for two years - will make college more accessible for low- and moderate-income students.
The study group's first recommendation is to eliminate the Free Application for Federal Student Aid and for colleges to obtain all needed financial information from the Internal Revenue Service.
The current FAFSA form is one of the "biggest barriers to access that we could have devised," said Barmak Nassirian, executive director of the American Association of Collegiate Registrars and Admissions Officers.
According to Nassirian, the form is confusing enough that some students, often those who are first-generation college applicants or from low-income families, "look at the form and think, 'If I can't fill it out, college can't be for me,'" he said.
Since students already give the IRS financial information, students should be able to just give permission for the IRS to share their records with the Department of Education, co-chairwoman of the study group Sandy Baum wrote in an e-mail.
The committee's second suggestion is to base Pell Grant awards solely on family size and adjusted gross income, leaving out other assets.
But reducing the amount of available information used in administering grant money is potentially problematic, said Bill Schilling, Penn's director of financial aid.
"Anytime you simplify, there is always a risk that you will increase inequities," Schilling said. "The less information you get, the harder it is to tell a true low-income family from one that just looks it on paper."
But according to Nassirian, most Americans don't have huge assets outside of their homes and farms, which are already not included on the form, so in this case creating a simpler process may be the best solution.
The group also proposes combining all education tax credits and deductions into a single tax credit and allowing the credit to be applied toward both tuition and non-tuition expenses.
One of the more controversial recommendations is to end subsidies on student loans and redirect the money toward helping students repay their loans in the future.
Subsidized loans are based on the incomes of students' parents. But students will have to pay off their loans in the future from their own income.
"The issue with loans is, will they be manageable with repayment?" Schilling said. "Subsiding based on the borrower's income out of college makes the most sense."
The group also suggests creating tax-free college savings accounts for children from low-income backgrounds, which could be used for postsecondary education at any age.
Though students would receive the same aid they would be eligible for in Pell Grants, college savings accounts for low-income students "sends a strong message that college is possible early on," Nassirian said.
The final proposal is to create grants that reward states and institutions for student retention.
The group suggests replacing current campus-based financial aid programs like Perkins Loans and federal work study with these block grants to further simplify the federal financial aid process.
