Late in March, a task force of 17 NASFAA members forwarded an initial list of 61 recommendations for changes to the Higher Education Act in the upcoming Reauthorization to the NASFAA Board of Directors. The Board accepted most of those recommendations, although it was requested that some be further developed. This is the fifth in a series of articles that highlight those recommendations. NASFAA encourages members to suggest additional areas where legislative change is needed in the area of student consumer information. To do so, you may comment publicly below or send your concerns privately to Reauth@nasfaa.org. For comprehensive coverage of all reauthorization topics, please refer to NASFAA’s HEA Reauthorization Web Center.
The most commonly heard observation about student consumer requirements is that they are too overwhelming to be effective. The RTF recommends that Congress require ED to conduct a study to review the effectiveness of the current consumer requirements in terms of:
The study should be conducted by an independent, non-partisan firm with expertise in the area of data exchange that is relevant or applicable to the types of consumers targeted, and with expertise in consumer testing for effective communication.
One goal should be to determine whether provision of certain elements by the Department of Education (ED) rather than by individual schools would benefit students by standardizing presentation and delivery, and facilitating cross-school comparisons. The study should determine whether leveraging existing report standardization could allow the federal government to take over the responsibility of disclosing institution-specific consumer information students and families, and whether a resulting standardized format enhances transparency.
The study should also examine the most effective timing of information delivery with regard to the various stages of school selection, application for admission, application for financial aid and borrowing decisions, decisions regarding attendance, and enrollment. The provision should not allow ED to construe that more information must be proactively provided to students individually rather than posting it on the school’s or ED’s Website and pointing to where that is.
The RTF recommends that ED and loan servicers be responsible for developing and distributing loan-related consumer information, including debt management strategies. The timing of information should be better aligned with the need for it. The requirement that schools have counselors available to answer questions should be retained.
Congress should require ED to appoint an advisory panel for the purpose of assessing and making recommendations on the quality, sufficiency and processes for providing debt counseling. Panel membership should include representatives from financial services organizations, institutions of higher education and consumer advocacy organizations.
The Department has traditionally crafted these materials, media, and processes with a one-size-fits-all approach, which rarely fits most. This process needs a better quality assurance process. Better timing would provide “just-in-time” counseling on options available at the time they are meaningful to the borrower, something schools generally have no control over. This recommendation would complement Indebtedness Task Force recommendations #5 and #7.
Requirements to provide consumer information should distinguish between undergraduate and graduate students. Required provision of information that is not relevant to, or does not use data pertaining to, graduate students should be restricted to undergraduates.
The RTF recommends eliminating non-related requirements concerning Constitution Day, Voters Registration, and Athletic Disclosures from compliance within Title IV administration.
These provisions have no bearing on Title IV student financial aid but instead contribute to the confusion regarding all the information that is disseminated as a condition of Title IV participation.
The RTF recommends eliminating the PPA requirement that schools provide information about state grant assistance to all eligible Direct Loan borrowers in favor of information maintained by ED on a Website that is also linked to the FAFSA.
Publication Date: 5/30/2013