Rethinking Student Aid, a group of higher education policy experts, published its findings Thursday regarding two years of meetings about simplifying and improving the federal financial aid system.
The report focuses on improving both financial aid and the student loan system, said Rethinking Student Aid member Kathleen Little, senior executive director of College Board Financial Aid Programs. The proposals stand on seven core principles that emphasize clarity and predictable availability.
“The most important thing is that the proposals are comprehensive and integrated, and all are designed to meet a particular national goal and all support the seven principles that we came up with,” Little said.
Although the report has only been available for a few days, Little said the proposals have been met with both enthusiasm and concern. The most important thing, however, is that the proposals are sparking a dialogue that will hopefully lead to change, Little said.
University Financial Aid Director Yvonne Hubbard expressed a similar sentiment, noting the findings offer a starting point for debate.
“What I love about this [process] is that it is the beginning of a discussion,” Hubbard said. “People are going to have problems with it ... but it begins the conversation.”
The proposals suggest basing eligibility for Pell grants on readily available IRS data on families’ income tax returns, rather than the Free Application for Federal Student Aid.
This proposal has sparked concerns about the IRS’s willingness to take on the responsibility of providing information on families’ tax returns, Little said.
“I think they [the IRS] are not excited about the idea, but they will do it if Congress tells them to do it,” she said.
There is also the possibility of an oversimplification of the process, making it unable to account for the more subjective differences between family situations, Little said, adding, “we really worried about that a lot.”
The proposals also suggest the establishment of a loan-repayment system that abolishes government payment of subsidized loans for students still in college. Loan payments would increase as graduates’ incomes increase, with a backup plan available for those unable to make payments.
The proposals also suggest a new government system — likened to Social Security — that would create savings accounts for children from low-income families that would ultimately be used to pay for their college education. Little explained that this would allow families to plan further in advance for their children’s education. Some higher education experts, however, worry this may put pressure on an already strained federal budget.
In examining how these proposals could affect the University, Hubbard noted “it’s years away until we see any action off this.” She added, though, that the reports add to the dialogue that marks the beginning of the next congressional reauthorization of financial aid.
“We’ll study this and be part of the conversation as it goes on,” Hubbard said.
Hubbard also stressed President John T. Casteen, III’s commitment to improving financial aid and noted that the University has been promoting the simplification of the loan process for some time.
“This report follows us, rather than us following it when it comes to loans ... that conversation is one we’ve been leading for a while,” Hubbard said.
The proposals may open the doorway for discussion that would facilitate changes, making financial aid options simpler and more available, Hubbard said.
“People don’t think college will be affordable,” Hubbard said, “so they are not encouraging their students to prepare for college.”
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