Op-Ed: Calls for 'Skin-In-The-Game' in Higher Education Ignore an Existing, Effective Program
Penned by NASFAA President Justin Draeger and originally published by The Hill on August 31, 2015
Legislative proposals that work at cross-purposes are nothing new, but watching the latest Higher Education Act reauthorization discussions might cause a serious case of whiplash among even seasoned political spectators. On one hand, Congress has ramped up its rhetoric in support of risk-sharing or “skin in the game,” to financially incentivize and/or penalize colleges based on whether students graduate and successfully repay their loans. On the other hand, Congress is on the cusp of eliminating the federal Perkins Loan Program, the only financial risk-sharing student aid program in existence – and a successful one at that.
Everyone – colleges, policymakers, students--is in favor of accountability. Yet all this talk of institutional “skin in the game” suggests that universities do not currently have a financial stake in their students’ success. Nothing could be further from the truth. The most troubling part about these conversations is the complete lack of discussion about the Perkins Loan Program, which requires schools to jointly fund low-interest loans to needy students with the federal government. If Congress does not extend the program by October 1, it will simply expire.
The Perkins Loan Program is predicated on shared risk and investment, with both the federal government and institutions making contributions. Institutions have shown a great commitment to this program – as evidenced by the fact that participating schools have continued to invest in Perkins, even though the federal government has for nearly a decade failed to meet its financial obligatory contributions. Colleges have even covered the federal share when borrowers qualify for one of the program’s loan forgiveness provisions.
Read the rest of this op-ed on The Hill's website >>
Publication Date: 8/31/2015
Rodney O | 9/2/2015 12:51:51 PM
Kudos to you, Justin, for voicing the frustrations of many of us. I hope a few in Congress hear you.
David S | 9/1/2015 9:30:37 AM
Thank you for writing this, Justin. Of course, there are many ways that colleges have skin in the game (ask virtually anyone who's ever been through a program review with any findings), but Perkins has for years served as a successful example of the type of suggestion many are making for federal loan programs. We're down to the 11th hour, it's on all of us to reach out to our elected officials and save this program that costs taxpayers nothing.
I'd add that if the federal government will never again contribute a dime towards Perkins, we should be able to call it whatever we want and remove "federal" from the title, but I'll try not to get greedy :)
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