Work will focus primarily on income-driven repayment options, the terms and conditions of the federal Direct Loan program, and student loan servicing.

FOR IMMEDIATE RELEASE
Contact: Erin Powers
Director of Marketing & Communications 
(202) 785-6959 
[email protected]

WASHINGTON, DC, June 4, 2021 — Universal federal student loan forgiveness has been thrust into the spotlight of late as a way to fix what has been dubbed a national crisis: more than $1.6 trillion in outstanding student loan debt. Missing from the conversation, however, is the acknowledgement that unmanageable debt is a result of a flawed repayment system, rather than the cause of complicated repayment issues. The National Association of Student Financial Aid Administrators (NASFAA), with support from Arnold Ventures, today kicks off an 18-month-long project in which it will develop thoughtful, targeted policy solutions to treat the causes of student loan repayment issues.

Through this grant work, NASFAA will develop policy recommendations to treat the underlying flaws in our current student loan repayment system that lead borrowers into financial hardship, while underscoring the benefits of a strong self-help federal loan program. In making recommendations, NASFAA will focus on program design and delivery in order to create systemic policy change. This work will be informed by five overarching objectives:

• Strengthen and simplify income-driven repayment programs so borrowers are protected and can repay in accessible, realistic, and manageable ways.
• Re-examine the federal student loan system as a federal, direct loan program, as opposed to a vestige of bank-based lending. 
• Develop policies that help and incentivize borrowers to meet their obligations, and target resources toward borrowers who need assistance.
• Create policies that assist struggling borrowers, rather than further punish and hinder those who are already behind.
• Ensure policies are progressive — not regressive — for low-income students, disadvantaged students, and students of color.

NASFAA also plans to form a coalition of partners from the higher education policy community who will be asked to lend their support and help advocate for the policies developed as part of this project. A report with NASFAA’s final recommendations along — with a one-pager outlining the issue and core recommendations which will be distributed to lawmakers and staff — will be published in February 2022 and the remainder of the grant period will be focused on advocacy efforts, with the help of coalition members.

NASFAA policy experts are available to speak more about the student loan repayment system and proposed reforms. To set up an interview, please email NASFAA Director of Marketing and Communications Erin Powers or call (202) 785-6959.

About the National Association of Student Financial Aid Administrators 

The National Association of Student Financial Aid Administrators (NASFAA) provides professional development for financial aid administrators; advocates for public policies that increase student access and success; serves as a forum on student financial aid issues; and is committed to diversity throughout all activities. NASFAA’s membership includes 22,000 student financial assistance professionals at approximately 3,000 colleges, universities, and career schools across the country. NASFAA member institutions serve nine out of every 10 undergraduates in the U.S.