The last comprehensive reauthorization of the Higher Education Act (HEA) occurred in 2008, and the law has been overdue for another reauthorization for nearly a decade. The National Association of Student Financial Aid Administrators (NASFAA) has worked on reauthorization for more than a decade. Beginning with the original 2013 Reauthorization Task Force (RTF) report — and followed by updates in 2016 and 2019 — NASFAA's HEA recommendations reflect the work of more than 15 member-led policy development task forces. Though Congress has made some progress on HEA reauthorization, observers have yet to see comprehensive bipartisan legislation introduced in either congressional chamber. 

Despite the absence of a comprehensive bipartisan proposal, NASFAA is pleased to report that several recommendations have been accomplished since our update to these recommendations in 2019. Most notably, two pieces of legislation, the Fostering Undergraduate Talent by Unlocking Resources for Education (FUTURE) Act and the FAFSA Simplification Act, were signed into law and have brought much-needed improvement to students and the federal student aid system as a whole. 

In addition to the reauthorization positions highlighted below, NASFAA's updated recommendations are included in the following documents:

• Overview of NASFAA's top HEA policy priorities: Removing Barriers and Expanding Opportunity: NASFAA Higher Education Act Priorities (October 2026).
• Complete list of NASFAA's HEA recommendations: Compiled Higher Education Act Recommendations (October 2026). 

Strengthening Need-Based Aid

• Double the maximum Pell Grant.
  The time has come for Congress to make a substantial investment in the program by, at a minimum, increasing the maximum Pell Grant by $200 as an inflationary adjustment, while working toward a maximum award for $13,000. A maximum award of $13,000, which would double the maximum grant amount from $6,495 in the 2021-22 award year, would effectively recalibrate the grant and restore its purchasing power. The current maximum is increasingly insufficient to move the needle on college access, leaving low-income students forced to borrow high amounts, work unsustainable hours, or, worse yet, not attend postsecondary education at all. Increasing the maximum Pell Grant will provide myriad benefits not only to our nation’s lowest-income students, but also to the federal government and broader society. Students who persist in higher education are more likely to be employed, tax-paying, productive members of society.

• Extend Pell Grant eligibility to Deferred Action for Childhood Arrivals recipients.
  Congress should extend Pell Grant eligibility to Deferred Action for Childhood Arrivals (DACA) recipients. Providing access to Pell Grants is a critical step in providing this population with access to affordable higher education opportunities.

• Make Pell a true entitlement and reinstate the Pell Grant's automatic inflation adjustment.
  The Federal Pell Grant should be a true entitlement with 100% mandatory funding. To deliver the sustained and certain annual increases needed to ensure the grant maintains its purchasing power, Congress should also reinstate an automatic inflation adjustment to the maximum award.

• Bolster investment in the campus-based aid programs.
  In a period of financial austerity, the Federal Supplemental Educational Opportunity Grant (FSEOG) and Federal Work-Study (FWS) programs stretch the federal dollar further in support of the neediest students. Congress should ensure the programs receive the consistent annual funding increases needed to expand their impact to our nation's lowest-income students. 

• Revise the campus-based aid allocation formula.
  Due to the antiquated design of the funding formula, today's allocation of campus-based aid largely reflects a 40-year-old distribution of funds, in which institutions receive a "base guarantee" of funding. Growing schools that are serving needier student populations cannot increase their funding because other institutions' funding levels are largely protected, regardless of institutional need. NASFAA recommends phasing out the base guarantee portion of the allocation formula over 10 years; thus, allocations would be based only on a "fair share" formula.

• Increase awarding flexibility in FSEOG.
  Currently, FSEOG must be awarded first to students with exceptional need, with priority given to Pell Grant recipients. The law defines "students with exceptional need" as students with the lowest Student Aid Index (SAI) at the institution. Congress should retain the tie between the FSEOG and Pell Grant programs, but NASFAA supports prioritizing FSEOG awards to students whose SAIs fall into the Pell eligibility range, rather than the student's actual receipt of a Pell Grant. In addition, the "lowest SAI" order of awarding should be eliminated.

Improving and Simplifying the Federal Financial Aid Need Analysis and Application Process

• Pass legislation to implement technical amendments to the FAFSA Simplification and FUTURE Acts, without risking the timely opening of future FAFSA cycles.
  As with any substantial piece of legislation, there is a need to address some unintended consequences or oversights. Now that both laws have been fully implemented, we have identified several areas within the Internal Revenue Code (IRC) and the Higher Education Act (HEA) that should be reformed to ensure FAFSA simplification functions as intended.

• Increase transparency and repeal ED's authority to regulate Cost of Attendance (COA).
  Congress should repeal ED's authority to regulate COA components, and instead add institutional requirements that increase transparency about how COAs are developed. Congress should also allow institutions to include average loan fees in the COA, rather than the actual cost charged to each student, and repeal the requirement that the cost of professional licensure be included in the COA for all students in programs that lead to licensure, and instead require this cost to be included in the COA only upon student request. 

Promoting Opportunity and Innovation in Education

• Address the continued challenges faced by justice-impacted scholars. Incarcerated individuals, on July 1, 2023, became eligible to receive Pell Grants if enrolled in an eligible Prison Education Program (PEP). NASFAA has several recommendations to address the unique set of challenges that incarcerated students experience when trying to navigate the financial aid application process. 

Curbing Excessive Student Indebtedness

• Eliminate student loan origination fees.
  Origination fees withhold a portion of a student's proceeds while still requiring repayment with accrued interest of the full loan amount before the deduction of fees. Congress should eliminate loan origination fees altogether to make more transparent borrowers' true loan costs and eliminate unnecessary confusion.

• Restore graduate and professional student eligibility for subsidized loans.
  The Budget Control Act of 2011 eliminated graduate student eligibility for the in-school interest subsidy as a means of reducing the federal budget deficit, a change that was particularly harmful for low-income students in pursuit of an advanced degree who have no access to federal grants. Congress should restore subsidized loan eligibility for graduate students. 

• Modify the current structure of loan limits.
  The current structure of annual and aggregate loan limits for Direct Loans reflects piecemeal changes to the loan programs over time and does not necessarily work effectively or efficiently for today's students. Congress should improve the structure of loan limits by establishing one, annual subsidized limit by eliminating differences based on year in school, increase annual and aggregate limits to a more realistic level, step aggregate limits based on year in school, and eliminate Direct Loan proration for final periods of enrollment in programs that are at least a year in length.

• Provide financial aid offices with more tools to curb student indebtedness.
  Financial aid administrators want to be good stewards of federal funds, but more importantly, they want to ensure their students avoid accruing unnecessary or excessive debt and are able to repay their loans. Congress should eliminate the requirement that institutions adjust loans for less-than-full-time study and incorporate the option to limit loans for less-than-full-time enrollment into existing institutional authority to limit loans.  Congress should also provide institutions with the authority to mandate additional counseling for students borrowing federal student loans, if the school so chooses.

Reforming Student Loan Repayment

• Strengthen Public Service Loan Forgiveness (PSLF).
  The PSLF program encourages students to pursue and commit to vital public service careers without fear that their student loan payments will follow them for decades. Congress should work to strengthen PSLF and improve the administration of the program by encouraging the annual submission of employment certification forms, increasing borrower communications, and making PSLF data public. Congress should also update the timeline for PSLF forgiveness to provide rolling forgiveness opportunities, forgiving $5,000 in debt after each 2 years of time in public service For borrowers who still have loan debt left after 10 years of working in public service, their remaining balance would be forgiven as it is under the current system. 

• Explore ways in which interest could be reformed to better align the federal student loan program with its purpose of expanding postsecondary access.
  This should include drastically lowering interest rates for all types of federal direct loans (subsidized, unsubsidized, parent PLUS) to advance the program's primary goal of promoting postsecondary access,  eliminating negative amortization, and finishing what ED started by eliminating the remaining statutory capitalization events, including IBR, the end of deferment on unsubsidized loans, and consolidation.

• Reform Student Loan Default.
  Challenges surrounding student loan default remain extensive, as millions of borrowers prepare to reenter repayment following several years of significant changes to the federal student loan system that have created a complex repayment landscape. Complicating the landscape further, federal student loan default collection has long run through Treasury’s Treasury Offset Program, which can garnish wages, tax refunds and other federal payments. As of March 2026 due to an interagency agreement, default servicing responsibilities, previously handled by ED’s Office of Federal Student Aid, are now shifting to Treasury as well. Lawmakers should put guardrails in place that help struggling borrowers avoid entering default altogether and make it easier for those who do default to return to good standing. For NASFAA’s complete set of recommendations to reform student loan default, please refer to NASFAA’s Protecting Borrowers & Advancing Equity report. 

Improving Information for Students and Families

• Standardize some financial aid offer elements and terms.
  Financial aid administrators value the importance of clear, concise, and accurate information for students and parents, and recognize there are ways to improve financial aid offers. NASFAA's Code of Conduct includes requirements around aid offers, such as the inclusion of specific elements and the use of standard terminology and definitions. Congress should pass legislation that maintains institutional flexibility to design aid offers in a way that best meets the needs of each school’s specific student population to help maximize the effectiveness of aid offers and avoid unintended, negative consequences of overly prescriptive standardization.

• Develop and consistently use a consumer-testing model for new disclosure requirements.
  Moving forward, no new consumer information requirement should be imposed without prior consumer testing, which should then inform subsequent congressional or departmental action. Requirements to provide consumer information should consider their intended audience and distinguish between undergraduate and graduate students. 

• Repeal the ban on a federal-level student unit record.
  Congress should pass the College Transparency Act to repeal the student unit record ban and create a secure, privacy protected student-level data network.

Enhancing Student Aid Delivery and Innovation

• Improve the operational efficiency of ED's Office of Federal Student Aid.
  NASFAA urges Congress to prioritize accountability and oversight of FSA, particularly in meeting basic customer service objectives in its interaction with schools, such as by requiring FSA to provide the final report for a program review within 60 days after receipt of an institution's response. 

• Simplify the return of Title IV funds (R2T4) calculations and process for withdrawing students.
  The Return of Title IV Funds, or R2T4, process explains how to handle a student's federal aid funds when he or she withdraws from school before completing the payment period or period of enrollment. However, the process is entirely too complex and burdensome for institutions to execute. NASFAA has several recommendations to improve the process, Congress and ED should consider eliminating the requirement altogether, devising a new set of rules (perhaps through a dedicated negotiated rulemaking session), or fixing the current process.