Financial Aid Trends to Look for in 2016
By Allie Bidwell, Communications Staff
The higher education world, particularly as it relates to student financial aid, was filled with high-profile news and events in 2015, from a federal college rating system to proposals for free college, and widespread protests over student loan debt.
But with several pieces of legislation pending, and the reauthorization process for the Higher Education Act underway, 2016 is bound to be full of news to track. Here are some key areas to watch in the coming year:
- Changes to the FAFSA and Prior-Prior Year:
Perhaps one of the most significant financial aid-related policy changes to come about in 2015 – and a change that will continue to be relevant throughout the next year – was the president’s executive action in September to allow the use of prior-prior year (PPY) income data on the FAFSA, beginning with the 2017-18 award year. The change will make the FAFSA available earlier – on October 1, 2016 rather than January 1, 2017. The College Board in December also announced that it will use PPY on the CSS Profile starting with the 2017-18 award year. NASFAA has long advocated for the change, and urged the Obama administration to take action. Moving forward, NASFAA created a PPY Implementation Task Force to identify potential roadblocks to the implementation of PPY and to develop strategies to overcome those challenges.
- Reauthorizing the Higher Education Act:
Congress in 2015 managed to reauthorize the long-outdated Elementary and Secondary Education Act, more commonly known as No Child Left Behind. Senior lawmakers on both the House and Senate education committees had repeatedly said they would not fully dive into the reauthorization process of the Higher Education Act (HEA) until its K-12 counterpart was settled. With the passage of the Every Student Succeeds Act in December, the path was cleared for Congress to move forward with reauthorizing HEA. Hearings, discussion drafts, and individual bills have given some insight into what legislators would like to see in an updated HEA, including a more streamlined federal financial aid application process, simplifying the financial aid system overall (one grant/one loan), changes to the federal student loan system, institutional accountability, and potential changes to accreditation. In a special edition of NASFAA’s Journal of Student Financial Aid, NASFAA staff, members, and experts in the field also share some ideas for ways to reshape higher education financing and student aid with the upcoming reauthorization process.
- Expansion of Debt Relief and Loan Forgiveness Options:
In June, the Department of Education (ED) announced a multi-track process for some former Corinthian Colleges students to receive debt relief, and in August, ED announced it had begun the process to develop regulations to streamline the loan forgiveness process for students who file defense to repayment claims on their federal student loans. Since then, the Special Master appointed to oversee the debt relief process, Joseph Smith, has released two reports with updates on the progress toward establishing a longstanding process. Aside from an expanding federal debt relief process, individual companies, employers, and states have expanded debt relief and loan forgiveness efforts for college graduates. In New York, for example, the “Get on Your Feet” program created under Gov. Andrew Cuomo is available to new college graduates who make less than $50,000 each year. After the graduates enroll in an income-driven repayment plan, the state will pay their monthly federal student loan bills for two years.
- Institutional Risk-Sharing and “Skin in the Game”:
As Congress continues on its path to reauthorize the Higher Education Act, lawmakers, higher education leaders, and think tanks are toying with the idea of creating institutional risk-sharing models to hold colleges more accountable for how their students fare after leaving school. The most-discussed form of risk-sharing would require colleges and universities to be at least partly on the hook financially when graduates default on their student loans. But as the idea gains traction in Congress, policymakers have also raised concerns with how to implement a model that doesn’t unintentionally harm college access.
Publication Date: 1/7/2016