TY - JOUR AU - Dynarski, Susan AU - Scott-Clayton, Judith AU - Wiederspan, Mark TI - Simplifying Tax Incentives and Aid for College: Progress and Prospects JF - National Bureau of Economic Research Working Paper Series VL - No. 18707 PY - 2013 Y2 - January 2013 DO - 10.3386/w18707 UR - http://www.nber.org/papers/w18707 L1 - http://www.nber.org/papers/w18707.pdf N1 - Author contact info: Susan Dynarski University of Michigan Weill Hall 735 South State Street Ann Arbor, MI 48109-3091 Tel: 734 615 5113 Fax: NA E-Mail: dynarski@umich.edu Judith Scott-Clayton Teachers College Columbia University 525 W.120th Street, Box 174 New York, NY 10027 Tel: 212/678-3478 Fax: 212/678-3699 E-Mail: scott-clayton@tc.columbia.edu Mark Wiederspan 475 SW Fifth St. 50309 United States Des Moines, Iowa E-Mail: mwieders@umich.edu M1 - published as Susan Dynarski, Judith Scott-Clayton, Mark Wiederspan. "Simplifying Tax Incentives and Aid for College: Progress and Prospects," in Jeffrey R. Brown, editor, "Tax Policy and the Economy, Volume 27" University of Chicago Press (2013) M3 - presented at "Tax Policy and the Economy", October 6, 2011 AB - The application for federal student aid is longer than the tax returns filled out by the majority of US households. Research suggests that complexity in the aid process undermines its effectiveness in inducing more students into college. In 2008, an article in this journal showed that most of the data items in the aid application did not affect the distribution of aid, and that the much shorter set of variables available in IRS data could be used to closely replicate the existing distribution of aid. This added momentum to a period of discussion and activity around simplification in Congress and the US Department of Education. In this article, we provide a five-year retrospective of what's changed in the aid application process, what hasn't, and the possibilities for future reform. While there has been some streamlining in the process of applying for aid, it has fallen far short of its goals. Two dozen questions were removed from the aid application and a dozen added, reducing the number of questions from 127 to 116. Funding for college has also been complicated by the growth of a parallel system for aid: the tax system. A massive expansion in federal tax incentives for college, in particular the American Opportunity Tax Credit, has led to millions of households completing paperwork for both the IRS and the US Department of Education in order to qualify for college funding. ER -