NASFAA on Wednesday hosted a Postsecondary Education Financing Forum in New York City, bringing together a diverse group of higher education economists, researchers, and practitioners to discuss policy issues surrounding financing higher education.
The forum, hosted at New York University in partnership with the Eastern Association of Student Financial Aid Administrators (EASFAA) and the New York Association of Student Financial Aid Administrators (NYSFAAA), included remarks from Martha Kanter, executive director of the College Promise Campaign and distinguished visiting professor of higher education and senior fellow at New York University.
Kanter discussed the rising popularity of “college promise” campaigns, noting that when she first began looking at the campaigns in 2014 there were only about 50 identified programs around the country. “Now there are about 130 programs and pretty much a new one every day,” Kanter said, adding that more focus needs to be placed on the financial sustainability of such programs.
During the first of the three panel discussions at the forum, David Lucca of the Federal Reserve Bank of New York and Dr. Bob Archibald of the College of William and Mary discussed whether increases in federal student aid lead to increases in tuition – an idea also known as the “Bennett Hypothesis.” Lucca –– speaking as a researcher, and not a representative of the NY Fed –– said that while his research has shown that tuition sticker prices increased with different types of federal aid, other factors might lessen that sensitivity. Meanwhile, Archibald noted higher education is a unique market, and facets of that, such as a highly educated workforce and the utilization of technology for education versus productivity, can all contribute to rising costs.
During another panel, participants discussed policy solutions to counteract increasing levels of student borrowing and indebtedness, with suggestions ranging from standardizing cost of attendance to simplifying student loan repayment options.
Marc Jerome, executive vice president of Monroe College, said that policies regarding cost of attendance have strayed from their original intent and “encourage confusion and overborrowing” among students, especially low-income and nontraditional students. Jerome made several suggestions for ways to change the approach to cost of attendance, including refining annual loan limits to reflect credential status and the associated expected earnings, and prorating student loans for part-time enrollment. He also suggested “revisiting the wisdom” of allowing parents with no credit or weak credit to borrow up to the cost of attendance and ensuring that money borrowed is going to educational costs.
Kevin James, director of higher education for the Jain Family Institute, said that the risk associated with borrowing money to pay for college is an issue that does not get enough attention. “As tuitions have gone up and students are being asked to pay more … that carries with it a lot of risk,” James said. He suggested streamlining income-based repayment and exploring other means of funding college, such as income-share agreements, as ways to address student indebtedness.
NASFAA Vice President for Policy & Federal Relations Megan McClean Coval shared several policy recommendations NASFAA has made in advance of the upcoming reauthorization of the Higher Education Act, including giving institutions and aid administrators the authority to limit loan amounts for certain categories or groups of students, such as part-time students. NASFAA has also recommended simplifying the available student loan repayment programs and giving institutions the authority to require annual financial aid counseling for students.
The forum concluded with a panel comprised of financial aid administrators who shared their experiences of implementing financial literacy strategies on their campuses. Jim Triboli, director of financial aid at Niagara County Community College, said that while many view student loan default rates as a financial aid problem, it is actually an institution problem that needs to be addressed across campus. In an effort to reduce his school’s default rates, Triboli said he hired a student loan clerk who is responsible for reaching out to defaulted borrowers to offer support and assistance, a move that he said has been very successful.
Tom Kokis, director of financial literacy at Berkeley College, described several strategies he uses to teach financial literacy to his students, which include hosting discussions during orientation, providing his students with an annual loan statements, and requiring loan counseling for all graduating students who have borrowed. Another panelist, Mildred O’Keefe, director of financial aid at SUNY College at Old Westbury, spoke about the importance of having all campus offices participate in financial literacy efforts and shared some strategies for engaging students in the discussions.
Be sure to check out our Facebook album to see pictures from the event and keep an eye on Today’s News for video of the event.
Publication Date: 5/12/2016