House Subcommittee Explores the Future Focus of Federal Student Aid

See May 2 update at bottom

“Simplify…simplify…simplify federal financial aid” was the message delivered by Trinity University Washington President Patricia McGuire to members of the House Subcommittee on Higher Education and Workforce during a hearing today on the reauthorization of the Higher Education Act.

With the act due to expire at year’s end, the Subcommittee conducted the hearing “Keeping College Within Reach: The Role of Federal Student Aid Programs” to hear from a panel of higher education experts about the role and focus of federal financial aid programs.  Rep. Virginia Foxx (R-North Carolina) chaired the hearing. 

Historically, financial aid has been used to expand student access to the higher education institution of their choice, but given the nation’s economy and the increasing cost of higher education, many are calling to move toward a system that ties federal aid to the student outcomes, job placement, or graduation rates of institutions.

“Everyone involved in federal financial aid agrees on this one thing: it’s too complicated,” McGuire said.  To prove the point, she encouraged the subcommittee members to visit her President’s Blog and read the recent comments from Trinity students about the importance of federal loans and Pell Grants and how the programs could be improved.  (See McGuire's complete testimony)

“Federal financial aid is one of the most reliable, durable pillars of the framework we create for low income students who have few other sources of support to help them leverage their lives from places of despair to platforms of real success,” McGuire added.  “We can all agree that the current system can use some reform to make it better. But the system is hardly ‘broken’ as some critics claim. Rather, it needs updating for the new populations of students who attend school in ways that are quite different from traditional students of the past.”

McGuire urged the committee and Congress to consider five points when contemplating changes to the financial aid programs in the Higher Education Act reauthorization:

• Do no harm to what works best in the current financial aid system.
• Do not impose the wrong measures of success.
• Encourage more effective outcomes measures.
  - recognize new patterns of attendance and new ways of learning
  - incentivize students to focus on completion
  - recognize the totality of degrees attained
  - incentivize institutional programs that support at-risk students
• Simplify the system.
• Engage the students and practitioners, those who know how the system actually must work!

McGuire also cautioned against proposals that could limit federal aid opportunities for low-income students: “No one quarrels with accountability for the considerable federal investment in higher education, but some of the notions about what constitutes accountability are potentially quite destructive.”

In addition to President McGuire, others testifying at the hearing were:  Terry W. Hartle, senior vice president, Division of Government and Public Affairs, American Council on Education; Moriah Miles, state chair of the Minnesota State University Student Association, and Student at Minnesota State University, Mankato; and Daniel T. Madzelan, a retired employee of the U.S. Department of Education (Retired)

The Subcommittee on Higher Education and the Workforce is expected to conduct additional hearings in the coming months as it prepares legislation to reauthorize the Higher Education Act.  Witness testimony, opening statements, and an archived webcast of the hearing is available at: www.edworkforce.house.gov/hearings. 

Senate Hearing

Also on April 16, in the U.S Senate, three college students and a University of Wisconsin associate professor discussed college affordability during the hearing: The Challenge of College Affordability: The Student Lens, sponsored by the Committee on Health, Education, Labor and Pensions and chaired by Sen. Tom Harkin (D-Iowa).

Sen. Harkin’s introductory remarks focused on the increasing cost of college, while Sen. Lamar Alexander (R-Tenn.) blamed increases in college costs on states’ increasing need to meet Medicaid costs, indifferent use of college facilities, “the absurd barrage of well-intended regulations,” and funding college choice.

In general the students supported greater aid and lower cost loans, though they expressed differences of opinion regarding how difficult it was to obtain information about college cost and aid availability and the ease of applying for federal student aid.

Ethan Senack, a higher education associate at the U.S. Public Interest Research Group (PIRG) and former student at the University of Connecticut, explained PIRG’s efforts to prevent the July 1 doubling of the interest rate for Stafford (subsidized) Loans from 3.4 percent to 6.8.  He supported the Education Departments efforts to provide clear and standardized information in the form of the “Shopping Sheet” as well as legislation requiring uniform student aid award letters.

Derrica Donelson, a recent graduate of Lipscomb University in Nashville, acknowledged the importance of the Pell Grant, Tennessee state grant, and federal loans as well as the assistance of guidance personnel.  She also discussed her willingness to assume some debt for the chance to complete a combined BA/MA accounting program in five years at a slightly more expensive private college.

Wisconsin Center for the Advancement of Education Senior Scholar Sara Goldrick-Rabb painted a very bleak picture of college affordability, noting the diminishing purchasing power of the Pell Grant and the growing need for student loans.  She recommended changes in how aid eligibility is calculated, elimination of college tax credits, new requirements for state maintenance of effort, a curtailing of borrowing, and college cost control measures in order to provide more aid for the neediest students.

The Senate HELP Committee also is expected to conduct additional hearings in the coming months as it prepares legislation to reauthorize the Higher Education Act.  Witness testimony,
opening statements, and an archived webcast of the Senate hearing is available at: http://www.help.senate.gov/hearings/hearing/?id=58f4674b-5056-a032-5244-d855725503e9.

Update, May 2:

In a subsequent subcommittee hearing on April 24, Chair Virginia Foxx (R-N.C.) heard from witnesses about the need for and usefulness of providing information about colleges and financial aid to prospective students. Foxx opened the hearing by noting that, while the information might be improved, Congress and the Department of Education have developed a number of tools to help students gauge the price and graduate success at individual colleges.

She also cautioned that reporting requirements could be costly to institutions, explaining that ”during the 2012-13 academic year, institutions spent an estimated 850,320 hours and almost $31 million to fill out required federal surveys. This was in addition to other reporting requirements.”

Several witnesses agreed that students need better and earlier information about colleges, but cautioned that this did not mean there was a need for more data. For one, Donald Heller, dean of the College of Education at Michigan State University, agreed on the need for basic information, while also noting that most first-year students attend a community college or proprietary institution in their local community. The fact that 81 percent of students enroll in an institution within 50 miles of their home, he said, might suggest that proximity might be a stronger determinant of college choice than in-depth data on the full universe of colleges and universities.

For more information, please contact:
Maureen Budetti