By Brittany Hackett, Communications Staff
During a Senate hearing on Wednesday, witnesses emphasized the need for simplified federal student aid programs, greater state investment in higher education, and continued federal investment in financial aid programs like the Pell Grant.
The hearing, “Reauthorizing the Higher Education Act: Ensuring College Affordability,” was hosted by the Senate Health, Education, Labor, and Pension Committee and featured testimony from:
In her testimony, Scott-Clayton said that college attainment is “becoming increasingly unequal” among socioeconomic groups in the U.S. This inequality results in a “tragic waste of human potential,” she said, adding, “It’s getting worse and it demands federal policy solutions.”
The need for financial aid among students and families has become “more essential than ever,” but the complexity of the federal financial aid system is “undermining its effectiveness,” Scott-Clayton said.
The federal government can make several reforms to ease the complexity for students, including simplifying the Pell Grant eligibility formula and streamlining the student loan repayment system to include a single income-based repayment program and make that the default option for borrowers.
Scott-Clayton also voiced support for simplification of the FAFSA, including the use of prior-prior year for income verification, a proposal NASFAA has long supported. However, it’s not just about the form,” she said. “It’s about being able to communicate to students [as early as eight or ninth grade] that there is money to help them go to college.”
Akers told the committee that although student loan debt is a hot topic for the media, it is important to view this debt as “an instrument that allows borrowers to tap into their future earnings.” However, it is critical that the U.S. have strong federal support for the aid programs and equally strong safety nets for borrowers.
Two of the witnesses – Alexander and Mitchell -- focused their comments on the decline of state higher education appropriations and the role the federal government can play in bringing back state investment.
According to Alexander’s testimony, state investment in higher education is about 48 percent lower than it was in 1981, with the federal government now serving as the primary funding source for higher education.
“If we do not look to new federal policies to address this issue, we’ll continue to decline” the ranking of the Organisation for Economic Co-operation and Development (OECD) standards, Alexander said.
He told the committee that the federal government should to leverage its strength to incentivize states to reinvest in higher education. One way policymakers can achieve this, he said, is to revisit the Cost of Education Allowances, a program created in the 1972 Higher Education Act -- but never fully funded -- that provide extra financial support to state schools that admit large numbers of Pell Grant students.
While some states have begun to reinvest in higher education in recent years, it has not been enough to cover the revenue losses and increases in tuition since the 2008 recession, Mitchell said. Strengthening state investments in higher education will play a large role in ensuring more students enter and complete college, especially low-income and first-generation students, he added.
During his testimony, Kennedy shared with the committee several initiatives Indiana University has implemented to lower its students’ debt levels, including providing financial literacy courses and loan counseling and sending student borrowers annual debt letters.
“Our experience,” he said, “ has been that any touch point we have with students … is a touch point to talk to students about aid.”
Kennedy also said that he would like to see a return of the year-round Pell Grant, which he said would help many of his students complete their education in four years. NASFAA has voiced support for a year-round Pell program proposed by Sen. Mazie Hirono (D-HI).
Publication Date: 6/4/2015