By Megan Walter, Policy & Federal Relations Staff
More than 120,000 students across the country have experienced school closures while they were enrolled or shortly after they withdrew. In 2015, NASFAA launched a ticketing system website, NextStepsEd.org, with a coalition of several other groups to connect students with knowledgeable, caring financial aid administrators. These administrators assist students by determining their eligibility for closed-school federal loan discharge, and borrower defense, pell grant restoration, as well as navigating the process of applying for the loan discharge, and more.
In late 2016, NASFAA received funding to continue its work with students for 2017 and 2018 by providing continued assistance via the ticketing system. This grant has also provided the means to produce a policy recommendations paper, an informational website that will provide assistance to students looking for answers to their financial aid concerns once funding has ended, and a "lessons learned" paper to be published in late fall 2018.
To round out and further explore this issue, NASFAA hired consultants from Higher Ed Insight, a research and evaluation firm. The consultants, Sandy Baum, a nonresident fellow in the Education Policy Program at The Urban Institute, and Patricia Steele, Higher Ed Insight founder, created a report that examined current federal provisions for displaced students and from that research created policy recommendations on this topic.
As an economist, Baum had the interesting and difficult task of trying to create recommendations that would improve the lives of students who were affected by closed schools, make policies that would ensure these problems won't continue, as well as making sure to keep the taxpayer in mind. As Baum and Steele thought through their recommendations, they used the following question as a guiding principle: “How can these policies be as equitable and efficient as possible?” With this in mind, they furnished seven recommendations, including:
Borrowers who did not receive credentials before their schools closed should be eligible for at least partial discharge.
There should be a limit on the interest that can accrue on loans that are in forbearance while applications for discharge are in process and the discharge application process should migrate to a completely online format, reducing the time and expense involved in processing applications.
NASFAA also hired a consulting company, Coffey Consulting, LLC., to conduct consumer testing. Amelia Topper explained how Coffey Consulting worked directly with a small sample of students who have previously submitted tickets using the NextStepsEd.org website to make sure the platform was meeting their needs as consumers. Across five focus groups, two in-person and three online, Coffey and NASFAA were able to gain valuable insight as they continue to tweak and improve the displaced students informational website.
After the focus groups concluded, Coffey compiled some of the recurring comments, many of which related to students being unaware of what types of aid they have, needing more clarity about who does and who doesn't qualify for discharge, as well as more clarification on when to submit the borrower defense to loan repayment and loan discharge applications. NASFAA does not intend to publish Coffey’s consumer testing findings.
NASFAA aims to launch the informational website in August 2018.
Publication Date: 6/26/2018