Report: 5 Financial Aid Reforms That Could Increase Access, Decrease Confusion

By Katy Hopkins, Communications Staff 

The Center for American Progress (CAP) has released five proposed changes to streamline the federal financial aid system -- including an early aid notification akin to NASFAA’s Pell Promise.

In “Improving College Access and Degree Attainment Through an Early Guarantee of Federal Financial Aid,” CAP’s David A. Bergeron, vice president for postsecondary education, and Antoinette Flores, policy analyst, argue that, “as currently designed, the process of securing federal financial aid support is a series of mountains instead of open doors.”

Barriers to financial aid include the FAFSA -- even given recent efforts to streamline it -- and a confusing pre-college timeline that sends award notifications long after students apply to colleges, the authors write. 

To remedy these challenges, the report proposes five recommendations: 

“1. Provide an early guarantee of federal financial aid.

2. Build a financial aid calculator that works within the IRS income tax system to determine aid.

3. Permit states and institutions to use income data for families to make a more accurate assessment of financial need.

4. Target and communicate tuition support and grant aid. ...The program could be piloted by first targeting the neediest students who are eligible for the maximum Pell Grant award.

5. Pilot an early guarantee of aid already granted under current law.”

Under the proposal, students would learn in eighth grade of their eventual eligibility for federal financial aid for college. The IRS would use families’ federal income tax returns to determine eligibility, and the Department of Education (ED) would be tasked with “develop[ing] and provid[ing] detailed information on the cost of college, net price, types of aid available, and repayment options,” according to the report. 

Effectively communicating that eligibility would be key to the program’s success, the authors note in their fourth recommendation. 

“Families need to know that the immediate cost of college is covered,” they write. “For low- and moderate-income families, it is important to explicitly communicate how much federal aid they will receive in the form of grants that do not have to be repaid.”

ED already has the authority to pilot such a program in a few states, and “the Obama administration should work with Congress to have funds appropriated in order to implement a pilot program as quickly as possible,” the authors state in their fifth proposal. The pilot program could be targeted to students eligible for the maximum Pell Grant, they write in recommendation 4. 

NASFAA also advocates for an early notification of financial aid for students. Through a Pell Promise, students would learn of their Pell Grant eligibility as early as in ninth grade, although NASFAA does not specify that eligibility would be determined through the income tax system alone. NASFAA, like CAP, believes this knowledge could help incentivize students to consider and work towards the possibility of higher education before uninformed concerns about costs dissuade them from staying on track. 

 

Publication Date: 5/11/2015


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