One Grant/One Loan: The Future of Federal Student Aid? 11:00 am – 12:00 pm

By Brittany Hackett, Communications Staff

NASFAA’s One Grant/One Loan Task Force on Monday afternoon presented their report regarding the proposal to move to such a model of financial aid.

The task force, which convened in the fall of 2015, was tasked with examining potential implications of the one grant/one loan model, which has been widely discussed in Congress during Higher Education Act (HEA) reauthorization talks. During their deliberations, the task force used Senate HELP Committee Chair Lamar Alexander’s (R-TN) proposed “FAST Act” as a baseline for discussion. The task force did not deliberate on the merits of the proposal and “worked from the premise of ‘If it were to occur, what would we need to think about,’” Theodore Malone of Purdue University said.

“We had many, many questions … more questions than we had answers,” task force member Angela Johnson of Cuyahoga Community College Eastern Campus said of the task force’s discussion of the one grant/one loan proposal. However, the task force was able to give the proposal thoughtful consideration and issued several recommendations in its report, which were approved by NASFAA’s Board of Directors late last week.

All of the task force’s recommendations were developed under the assumption that Congress expressed a desire to move to a one grant/one loan model. That task force did not take a position on the concept as a whole. The recommendations include retaining the Federal Work-Study Program and the Administrative Cost Allowance (ACA).

Regarding the group’s recommendations for a “one grant” program, they recommended that a “Pell Well” or “Flex Pell” model of delivery be implemented, as well as shifting the administration of the Iraq and Afghanistan Service Grant Program (IASG) to either the Department of Defense or the Department of Veterans Affairs. They also recommended that the TEACH Grant Program be turned into a loan program that includes forgiveness options. The Pell Grant should also be made into a true entitlement and be 100 percent mandated funding.

For the “one loan” component, the task force recommended a single loan program with identical terms for undergraduate students, graduate students, and parents and to establish aggregate loan limits based on level of academic credential. In addition the task force reinforced prior NASFAA recommendations to allow institutional authority to set loan limits for certain categories of borrowers and to eliminate origination fees.

Ultimately, the task force urged Congress to consider that no matter how simple the federal programs may become, there will continue to be multiple state and institutional grant and loan programs.

 

 

Publication Date: 7/11/2016

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