Amidst all of the big-picture debates we have about making college affordable, about federal vs. private loans, socialized vs. privatized education, and so on - it is easy to skip the minutiae of the current mess that is College Education. I consider myself relatively well-versed in these minutiae - I'm graduating right now from a British University, and my girlfriend is struggling her way through the American Education system, and I've spent much of my degree making myself aware of the comparative strengths and weaknesses of funding methods for Universities. I've come up with a solution, which I think ameliorates the British and American systems (one which, in short, benefits the finances of the students in the same way occurs in Britain, and benefits the finances of the actual universities in the same way occurs in the U.S.) Perhaps I will blog on this more extensively another time. 

But for now, a tidbit of knowledge which came to my attention via a Financial Aid Dean at Columbia a few weeks ago, and struck me as patently absurd. 

Everyone knows that FAFSA (Free Application for Federal Student Aid) is a mind-boggling document which takes into account just about every aspect of a family's finances - from income to tax to healthcare bills to mortgage repayments to current and previous jobs and number of dependents - and at the end of it spits out a number: the number that a family can reasonably be expected to pay for college tuition. 

The catch is, that it's never reasonable. Many of my assumptions about fixing this had to do with shifting the formulas that go into FAFSA - I assumed that if you just tweak one part of the equation, then it would come out with a more reasonable sum for families across all income brackets. 

But, and here's what was news to me, it turns out that the equation - the formula - is not the problem. It's the fundamentals behind the process itself. The budget for Federal Student Aid is based upon an extrapolation of funds available after the Pell Grants have been taken into account - so what happens is this: 1. Budget is set for ALL federal aid, including FAFSA payments and Pell Grants. 2. Government decides how many people it wants to make eligible that year for Pell Grants. 3. Dept. of Education wonk works out how much that would cost, and then deducts it from the total pot of cash available. 4. The remaining sum of money is distributed in proportion to all the remaining families - ie, rich families getting less, poorer families getting more.  Only THEN is the FAFSA equation adjusted in order to reflect what the government is able to pay, based on what is left. 

This struck me as ridiculous. It effectively means that the entire FAFSA process is designed not to establish how much money you need, but what percentage of available funds will be given to you. It is entirely reverse logic! People spend hours working out their finances for the coming year, and our response is not to work out how much money they need, but to work out how to fiddle the equation for that year so it looks like we gave them what they need. 

If there's a high number of Pell Grant students in one year, it harms everyone else up the ladder. If there are fewer, then everyone benefits. 

As far as this applies to the candidates, I know both Clinton and Obama have proposed getting rid of FAFSA altogether, and simply including a check-box on family tax returns. Obama would also enable the aid to be made available far sooner - the financial year before college starts (from memory). This is a start at reducing the bureaucracy and unnecessary burdens on families, but if we really want to correct the system, then it seems to me clear that this fundamental injustice must be righted, and that Pell Grants should be made entirely separate from other forms of Federal Aid, to ensure families get what is fair. 

In many ways, I know I shouldn't be surprised at this. But I had always assumed that just the funding and not the formula was what was the problem. I had no idea that the latter was entirely subjective, and dictated by the former. 

PS- let me introduce myself. Theo, 21, London/NYC. Longtime TPM reader, short-time TPM blogger. You guys rock. Hope I'm welcome here.