"As the holiday season begins, all through the house, not a creature is stirring…except for college-bound high school seniors agonizing over their college application essays. So it is fitting that in Congress, the House Education and Workforce Committee has introduced the Prosper Act for reauthorizing the Higher Education Act, which would make it easier and less confusing to choose and pay for college," Monica Herk, vice president of education research at the Committee for Economic Development, writes in an opinion piece for The Hill.
"Overall, the House bill contains many good solutions, including streamlining student aid into one grant program and one loan program with reasonable limits. But it could go further. Two key recommendations that the bill currently lacks are creating lifetime learning accounts for every American, and moving management of federal student aid from the Education Department to the Treasury Department.
Lifetime learning accounts would be one-stop 'bank accounts' for all student aid, including grants, scholarships, and student loan lines of credit, much like health savings accounts, but for postsecondary education and training. Each American would have a personal account. In it would go any college savings, Pell grants or other grants, tuition assistance from employers or the military, plus lines of credit from student loans.
... As for the second recommendation, moving management of the federal student loan portfolio from the Education Department to the Treasury Department may seem odd, until you realize that the federal government’s student loan portfolio now exceeds $1.3 trillion, which is bigger than the portfolio of many banks. The Treasury Department, with its expertise in managing U.S. government debt and collecting government revenue, would be better able to manage this vast portfolio.
Plus, moving the portfolio to the Treasury Department opens the door to other innovations. Since the IRS sits under the Treasury Department, it should be easier to institute a data-sharing agreement that would simplify, if not eliminate, the Free Application for Federal Student Aid. Imagine a world where all that families who have filed a federal tax return need to do is give the IRS permission, and they would get an immediate calculation of the federal student aid their college-age student qualifies for."
NASFAA's "Headlines" section highlights media coverage of financial aid to help members stay up to date with the latest news. Inclusion in Today's News does not imply endorsement of the material or guarantee the accuracy of information presented.
Publication Date: 12/7/2017