Robert Shireman, deputy under secretary for the U.S. Department of Education, provided insight into several of the Obama Administration's financial aid proposals at recent events.

Shireman will be the keynote speaker at this year's NASFAA Conference in San Antonio, Texas and will deliver the opening address on July 12. Don't miss his crucial insights.

Mandatory Pell

During a press conference held on Monday, a reporter noted that Democratic Senate leaders on the Appropriations Committee questioned the proposal to make Pell an entitlement program. The reporter asked if the administration still believed it could achieve its goal of a mandatory Pell program.

"We are working with Congress to look at the various ways that we might achieve our goal of a stable and growing Pell Grant over time," Shireman said. "And our proposal of an entitlement is still on the table but we know that as this process unfolds we'll look at other ways that we can achieve that goal."

When the reporter asked what some of those "other ways" might be, Shireman noted that in the past mandatory funds have been used to "top off" Pell to provide the added amount needed.

"Those are the kinds of things that we would look at," he said.

Maintaining FFELP Services

Responding to a question at a recent education stakeholder's meeting, Shireman outlined how FFELP services could be maintained. He reiterated the administration's argument that the guaranteed program is ending even if Congress does not eliminated it through reconciliation legislation and noted that state agencies are now suffering the resulting revenue losses from the inability of the lenders to hold on to loans.

"The guaranteed loan program earnings that those entities have had in the past are disappearing now before Congress does anything," Shireman said. "We're coming in with a proposal to bolster that so that those activities can continue."

The administrations proposal is to include money in the proposed Access and Completion Incentive Fund for states to provide state agencies so that they can continue the activities that have been important to schools in those states.

Shireman made it clear that the administration was not proposing to give these agencies any tasks related to student loans. "They don't need to have a financial interest in a loan program per se," he said. "They should be getting information out about Pell Grants, about state grants, about student loan opportunities."

Converting to Direct Lending

At Monday's press conference, another reporter asked Shireman if the Department will be providing any assistance to smaller schools that need to update their technology to move to direct loans.

Shireman responded that the Department is being very proactive in reaching out to schools, doing Webinars, live training to make sure that there is enough time for schools to make the change.

"We have discovered in every case so far that the school is pleasantly surprised once they get into the process to discover that it's not a big change from what they do already in the Pell Grant program," Shireman said. "And but we want to make sure that we get ahead of this and provide all the technical assistance the schools need and have been doing that."

College Access and Completion Fund

The administration's proposal to spend $2.5 billion over five years to increase college access and completion has many wondering how this money will actually be spent. At the education stakeholders meeting, Shireman provided some insight.

He said that the purpose of the fund would be to try new things and test how effective current efforts and programs are.

"We're proposing an access and completion fund that is about innovation for states and colleges to innovate, evaluate, learn, share those learnings and help their peer institutions to do a much better job," he said.

He highlighted the need to help students who aren't quite prepared to take college credit courses and to keep Science, Technology, Engineering and Math (STEM) students in that course track.

"The overarching goals of improving college completion, but also doing some targeting in terms of what are the areas where we need to do better, and of course, the STEM areas are a key part of that," He said.

Public Service Loan Forgiveness and Income-Based Repayment

In response to an inquiry about the expected participation rates in the new Public Service Loan Forgiveness and Income-Based Repayment programs, Shireman was reluctant to provide estimates because they are new programs. When pressed by the reporter, Shireman noted that enrollment in the existing Income Contingent plan was about a 1 percent participation rate.

Shireman said that he expected participation in the Income-Based Repayment program to be much higher. He also noted that there was never a concerted effort to advertise the income contingent program so estimates could increase as more people learned about the program.

"There are assumptions that are made in budget estimates but we expect that it won't necessarily come out exactly that way," He said.

Posted 07/02/09 to www.NASFAA.org. Redistribution to non-NASFAA institutions is prohibited. Please submit Web site questions or comments to Web@NASFAA.org.