CSM: Low-income families get college aid help

[asteriskea]

<p>College students and parents who earn less than $45,000 annually and have their taxes done at select H&R Block offices will get free help completing the FAFSA, or Free Application for Federal Student Aid. Data compiled from these forms will be compared with a group that received only a financial-ad pamphlet for a new study aimed to improve access to higher education.</p>

<p>

The difficulty of completing financial-aid applications is one of many barriers standing between low-income Americans and college degrees. An estimated 1.5 million students who might have qualified for federal Pell Grants for college (up to $4,050 a year) did not fill out a FAFSA in 2003-04, according to a report last year by the American Council on Education. Researchers hope that if families can get assistance from someone they trust with financial matters, many more will find that college is within their reach.</p>

<p>“Because we have all their tax information [at H&R Block] … and we ask them additional questions, we can give them a very accurate prediction of what their family is expected to contribute [to college costs and] the federal financial aid they might receive,” says Bridget Terry Long, an associate professor of education and economics at Harvard University. She’s also one of the creators of the study. Families also receive information about the costs of various colleges, particularly those in Ohio, where the pilot study is taking place.

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<p><a href=“Low-income families get college aid help - CSMonitor.com”>Low-income families get college aid help - CSMonitor.com;

[asteriskea]

<p>Do families need and want this kind of help with the FAFSA or will the study simply come to the conclusion that it is much more fruitful to concentrate on larger grant size…</p>

<p>

Here?s how the project, which involves researchers at Case Western Reserve University and University of Toronto… works: Randomly selected taxpayers with incomes below $45,000 who seek help from their taxes from H&R Block offices in and around Cleveland, Ohio, will be offered help filling out their FAFSA forms (a control group will receive only a brochure with publicly available information about attending and paying for college).</p>

<p>H&R Block?s tax preparers, working with software the company and the researchers jointly created, will help transport the applicants? tax information into the federal financial aid form (more than half of the FAFSA information comes from the tax form), and help them collect the information for, and complete, the rest of the form. The hypothesis is that using tax data to automatically fill in a large number of answers to the 108 questions on the financial aid form, and offering personal help in filling out the rest, will make the FAFSA less daunting than it might otherwise be.</p>

<p>Next, company representatives, trained by the researchers, will give study participants projections of how much state and federal financial aid they may qualify for, and how far that would go in covering the cost of attending selected colleges in the area. ?When we finish that interview, we give them a piece of paper that says, based on the information we?ve gathered today, here?s the tuition and here?s the aid you?d be eligible for,? says Eric P. Bettinger, associate professor of economics at Case Western.</p>

<p>Over time, the researchers plan to collaborate with the Ohio Board of Regents and the National Student Clearinghouse, which works with colleges to track enrollments and other information, to monitor whether those who participate in the program (and their children) are more likely to attend college, receive financial aid, and earn degrees than are students in the control group. The results, they hope, will point the way to possible ways to build on the approach, perhaps through arrangements in which federal tax information would automatically be shared with the Education Department for financial aid purposes.</p>

<p>?This should certainly give us some information about at what point in the pathway could we invest money and time and see results,? Long says. ?If we see there are families jumping at the chance to have someone help them with their FAFSA, that might be one way to invest our resources. If we find that we don?t get much of a response at all, that may tell us there aren?t as many problems with process as we thought, and we should invest in grant size.?..</p>

<p>at H&R Block, for whom low- and moderate income Americans make up about two-thirds of the company?s customers.</p>

<p>The company has an obvious self-interest in improving the financial situation (and assets) of its customer base, but it also has what Bettinger, the Case Western economist, calls a ?strong public service orientation.? That led H&R Block, working initially with the Brookings Institution, to sponsor a series of randomized research projects in various realms (other projects deal with retirement savings and food stamps) aimed at finding ?nationally scaleable? public policy solutions to under-researched problems affecting low and moderate income families.</p>

<p>?As cliched as it sounds, one reason we selected the FAFSA project is that education is the foundation and the cornerstone for so much,? says Jeremy White, vice president for business development and outreach at H&R Block, which is now overseeing the five research projects alone. ?The idea of getting folks more information and then allowing them to make an informed decision seemed like a good one to test out, and one that we?re uniquely equipped to play a role in.?</p>

<p>White and the researchers acknowledge that H&R Block is an atypical sponsor of research. But its involvement seems unlikely to raise the sorts of conflict of interest concerns that some corporation-sponsored studies generate; H&R Block isn?t charging clients who agree to have the company translate their tax data into the federal financial aid form (in fact, study participants actually get either a discount on tax preparation or a gift card for their involvement)…

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<p><a href=“http://www.insidehighered.com/news/2007/02/20/fafsa[/url]”>http://www.insidehighered.com/news/2007/02/20/fafsa&lt;/a&gt;&lt;/p&gt;

[NikkiiL]

<p>This really really really scares me. I have personal experience with Block and have been a Professional Tax Preparer for 14 years. I am also Financial Aid Counselor. I have seen numerous customers of Block whose financial lives have been utterly destroyed because of bad advice. And as a Financial Aid Counselor, I cannot imagine their tax professsionals having sufficient training to keep up with the ever changing Title IV regulations…it is hard enough to keep up when that is one’s primary job function.</p>

[paying3tuitions]

<p>Excerpt, out of context really, from the previous post: “I have seen numerous customers of Block whose financial lives have been utterly destroyed because of bad advice.”</p>

<p>Considering the source, now I’m worried about a few other matters in my life… j/k</p>

<p>In all seriousness, I clicked onto this thread, wondering if this could reduce paperwork headache for low-income families and thereby open doors for students.</p>

<p>I’ll read this thread with great interest. Since my expertise is in education, not finance, I look forward to what others will post. </p>

<p>Thanks to the OP. This thread might prove productive, espec. with a pilot study.
I can agree to overlook Block’s obvious agenda re: customer base. Could there also be some good lurking in there for students’ families. Paperwork overwhelms many decent working families, which is why they might use Block in the first place, so why not explore this pathway in a pilot study. I heard one poster’s precaution against concluding in favor of the large grant, but am not sure what that means, exactly…</p>

[StickerShock]

<p>I worked part-time for H&R Block over 20 years ago. We had a policy of checking a client’s previous year return for free to seek errors. I was always amazed at how many returns prepared by CPAs were incorrect. Block, at that time, focused on the average Joe’s return. Many CPAs just used consumer tax returns as a cash cow & weren’t really trained in the type of deductions and laws pertaining to our client base. If a complicated return crossed our desk, for which we were out of our league, the client was passed up to the executive prep division. </p>

<p>So much of financial, tax, & investment advice needs to be tailored to the client base. My brother is a fiduciary accountant & can answer the most esoteric question regarding estates & trusts. But ask him a question about a child care credit & he’ll have to look it up. His clients are gazillionaires, so he never deals with those credits.</p>

<p>I haven;t followed the H&r Block training program over the years, so I don’t know if its quality has suffered. But this program sounds like a creative way to benefit both Block & the low-income tax client who is facing the FASA headache.</p>

[NikkiiL]

<p>paying…when I said I had experience with Block, it wasn’t as one of their Tax Preparers, it was as someone who has fixed mistakes made on returns filed through Block and friends who went to Block whose financial lives were ruined by rookie preparers who didn’t understand Tax Code and DOE requirements.</p>

<p>Sticker…I think part of it is the area in which the office is located and the lack of concern over accuracy by those training the rookie preparers. Where I am, our office is full of rookies and I have seen so many mistakes coming out of there. I have also seen some returns from other locations that were error free. </p>

<p>Primarily, my concern is more from the FAA point of view…so much changes from year to year and much is actually in gray areas open to individual interpretation. Therefore, you can have 5 offices conducting 5 training sessions…and each trainer interpret the law differently…and this doesn’t just apply to tax office, but colleges as well. There’s also that UGLY UGLY phrase which resides at the bottom of the FAFSA which reads: “If you or your parents purposely give false or misleading information, you and your parents may be fined $20,000, sent to prison, or both.” Concern: If someone from ANY tax agency assists a parent/student in completing their FAFSA, what documentation will be provided so the parent/student can prove any potential errors were not deliberate or purposely misleading? For example…I once had a student who said “My friend told me if I answered yes to the ‘Orphan or Ward of the Court’ question, I could avoid putting in my parents information and would be able to get the Pell Grant. Why are you asking for proof that I am an orphan or ward of the court?” I answered, “Are you an orphan?” He said, “No, I live with my mother.” I said, “Then why did you list that you were an orphan?” “So I could get Pell.” Obviously, based on this and other information drug out of this student, he purposely provided false and misleading information on his fafsa and, if prosecuted by the Department of Education (we just refused to give him any aid), he could face a fine and/or prison time. What if, instead of a friend telling him to answer in this manner, it had been a tax professional telling him that is what he must answer? How could he prove his case? </p>

<p>And, what types of Financial Aid information would offices like this provide to students? Just information for the FAFSA application? Information on federal and state grants? Scholarships? There is so much to the world of Financial Aid…I just don’t know that someone can be properly trained to process Tax Returns (an industry with ever changing rules and regulations) and be properly trained to properly advise students about financial aid (another industry with ever changing rules and regulations.)</p>

[asteriskea]

<p>payingfor3 - thanks for your thoughtful edit. “I clicked onto this thread, wondering if this could reduce paperwork headache for low-income families and thereby open doors for students.” Exactly - as I understand this initiative, it is part of the DOE’s campaign to narrow the class divide and encourage larger numbers of lower SES and first generation college students not only to go to college but to stay and graduate. </p>

<p>This initiative is a push from the bottom up - just as colleges like Amherst’s efforts to attract low-income students can be understood to be from the top down. Education Secretary Margaret Spellings is quite fierce when it comes to criticizing the basically unnecessary length and complexity of the FAFSA and this pilot program is yet another part of the “Student Aid Gauntlet”. Backed by the American Council on Education and the Lumina Foundation the primary objective is to reduce the intimidating paperwork etc. with the hope that this will eliminate stress and the “fear factor” when it comes to finding out about and applying for federal aid. </p>

<p>The approach is novel because it sets out not just to simplify but to standardize the process: “The experiment, which is aimed at lower-income people who have teenage or college-age children or are potential college students themselves, seeks to gauge whether making it easier for low- and moderate-income families to apply for financial aid improves their college-going rates. What is unusual, however, is the research design ? offering taxpayers a painless way to turn the information on their tax forms into a financial aid application…” Results culled from the experiment will yield information about the best pathways to invest time and money - my comment about the grants simply picks up on the possible outcome of the program: “If we see there are families jumping at the chance to have someone help them with their FAFSA, that might be one way to invest our resources. If we find that we don’t get much of a response at all, that may tell us there aren’t as many problems with process as we thought, and we should invest in grant size.” Problems with HR Block certainly exist - and I would think that part of the point of the pilot program would be to see if this route is worth the time and effort and if widespread use of the software program is feasible at all. One of the key questions at the outset is - do enough people want or need this service?</p>

<p>

How Students and Families See Student Aid</p>

<p>Our nation has invested in student aid to ensure that financial barriers do not rule out college for anyone who is qualified and desires to attend. Student aid is the primary reason millions of students from low- and moderate-income families can attend and complete college each year.3 …</p>

<p>But a simpler and more effective student aid system could help millions more. To understand how, we must take a fresh and honest look at student aid from the perspective of the poorest students and families. Our study revealed that, to many of them, the promise we see in student aid often amounts to a long ordeal of scaling access barriers: poor information, unfair expected contributions, impenetrable forms, inflexible processes, burdensome verification, lack of coordination among funding sources, and insufficient total aid. While each barrier alone may not prove fatal to educational aspirations and plans, confronting all of them in succession and experiencing their full cumulative impact often does…</p>

<p>Low- and moderate-income students face unnecessarily complex student aid forms and application processes. The paper version of the FAFSA is eight pages long and contains over 100 questions. To answer just three of these questions, students must complete three additional worksheets with nearly 40 additional questions. In addition, many low-income students do not have Internet access and are unable to take advantage of simplified forms and processes available on-line…</p>

<p>Didn’t we tell you all this at least once already? </p>

<p>Large numbers of low-income students applying for federal financial aid are required to confirm, correct, document, explain, and supplement the data included on their FAFSAs. To do so, they are routinely required to complete complex and lengthy paper forms or follow complex and lengthy processes that ask for information they have already provided or data not required to determine eligibility for federal financial aid. Students applying to more than one college are confronted with multiple processes that are often very different…</p>

<p>These questions define the scope of needless and harmful complexity in student aid. Until our nation collectively commits to replacing these barriers with a stream of encouragement for students to aspire, prepare, enroll, and persist in higher education, we will not reap the full return on our considerable investment in student aid, no matter how large the investment…</p>

<p>Implementing pilot programs is necessary to determine how to provide students with adequate estimates of state and institutional aid, as well as to improve information that students receive upon FAFSA completion without adverse effects on student plans…</p>

<p>Low- and moderate-income students and adults need application forms and processes that are simple, flexible, and tailored to individual circumstances whenever possible. Despite a decade of effort to simplify the financial aid process, students and families are often still baffled by this process and cringe at the sight of application forms… Intensified by the negative effects of inadequate information and structural weaknesses in need analysis, these additional sources of complexity further undermine educational aspirations, plans, enrollment, and persistence… </p>

<p>Creating strategic partnerships with private and philanthropic organizations allows the Secretary to leverage existing resources and use innovative strategies for expanding the use of technology and bridging the digital divide.

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<p><a href=“http://www.ed.gov/about/bdscomm/list/acsfa/edlite-gauntlet.html#execsum[/url]”>http://www.ed.gov/about/bdscomm/list/acsfa/edlite-gauntlet.html#execsum&lt;/a&gt;&lt;/p&gt;