Starting tomorrow, the U.S. Congress will begin analyzing the Student Aid Fiscal Responsibility Act, a bill that hopes to simplify federal financial aid processes, consolidate universities under the Department of Education's direct lender program and include measures to make college more affordable for students. If passed, the bill could change University financial aid processes.
Rep. Tim Bishop, D-New York, a supporter of the bill, said the bill was drafted to remedy the United States' declining college entrance and graduation rates.
"It makes college access more achievable and provides students with the resources they need to graduate," Bishop said.
In a press conference yesterday, U.S. Education Secretary Arne Duncan said under the bill's provisions, $10 billion will be invested in early childhood education, $12 billion in community colleges and $2.5 billion in college accessibility and completion.
The U.S. has "flat-lined," Duncan said. "Many other countries have passed us."
Duncan added that he hopes the bill's measures will meet the Obama administration's goal of becoming the world leader in college graduates by 2020.
Universities can also expect to see significant changes in the federal government's student loan programs if the SAFRA is passed. Under the bill's provisions, all colleges and universities in the U.S. will only be able to offer loans through the Department of Education's direct lender program, which will eliminate the Federal Family Education Loan Program many universities currently use.
These potential changes could create immediate difficulties for the University, which currently operates under the FFEL Program.
Scott Miller, assistant director of student financial aid services, said while the bill would make processing loans easier, it also eliminates choice between lenders, which could in turn hinder innovation among lenders that arises from competition.
The bill will also introduce changes to the federal government's loan programs. If the bill is passed, the Federal Pell Grant program will adjust according to the cost of living starting in 2011. Additionally, the Federal Perkins Loan will expand to cover more college campuses, and will no longer be treated as a need-based loan, and schools will be given more money to fund it.
While Miller applauded the bill's efforts to improve the Federal Pell Grant Program, he expressed reservations about the possible switch of the Federal Perkins Loan to a non-need-based program.\n"It would change 180 degrees from what the Perkins Loan is today," he said. "We're going to have to sit down and look at our processes. It's going to change the way we do some things around here."
Bishop also said the bill could simplify the financial aid application process, making the Free Application for Federal Student Aid easier to fill out. The bill would also allow parents to provide answers on FAFSA forms using their 1040 Federal Income Tax Return, simplifying the process of verifying information on FAFSA forms.
Rep. George Miller, D-California,, who introduced the bill, said he hopes "to see it on [the President's] desk before the holidays"
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