Higher Education Thought Leaders Discuss State of Student Aid With NASFAA

By Allie Bidwell, Communications Staff

NASFAA on Wednesday released its annual report on the state of federal student aid programs, and hosted a panel discussion during which higher education thought leaders described improvements that could be made to what has become an overly-complex web of reporting requirements, application processes, and political tug-of-war within federal financial aid.

Each year, NASFAA publishes its National Student Aid Profile report, which gives a detailed look at how different federal student aid programs function, how funding and average awards have fluctuated over time, and how many students are served through each program. It also provides a broader look at how the federal student aid system as a whole has changed for students and families. Over five years (from 2008-09 to 2012-13), for example, the number of students applying for federal financial aid increased by 33 percent, from 16.4 million to 21.8 million. The total amount of financial aid the federal government gives to students has also greatly increased, to more than $170 billion.

Still, students and families struggle to navigate the world of financial aid – a critical component in figuring out how to pay for college.

“What we hope to convey here is that on the one hand, student aid is simple. No student should be denied access to higher education because they lack money. That's the idea here,” said NASFAA President Justin Draeger. “On the other hand, there's also an enormous amount of complexity.”

Brad Barnett, senior associate director of scholarships and financial aid at James Madison University, said during the panel discussion that the many administrative burdens facing financial aid administrators often prevents them from more effectively counseling parents and students, and helping them to make the best decisions about financial aid. Financial aid professionals, too, are sometimes confused by the range of student loan repayment plans, Barnett said. And if those working in financial aid offices struggle to sort out the nuances of different programs, it’s no surprise that students and parents are overwhelmed by information, he said.

“We're all looking to create a system that works in the best interest of students and families,” Barnett said. “We've reached the point where we've overly complicated the system. It's working against the goal we had in mind.”

Rather than adding training or piling on more requirements for financial aid offices, Barnett said, the federal government should work to remove some of the complexities within the federal student aid system.

The idea of streamlining and simplification has been picking up steam on Capitol Hill, several panelists noted, as Congress continues to look for ways to make the FAFSA more digestible for students and parents, for example.

“We see a great, unprecedented, bipartisan appetite around FAFSA simplification,” said Kim Cook, executive director of the National College Access Network. “We feel good about the prospects … for real change to happen.”

But competing interests often get in the way of progress, the panelists noted.

Cook said policymakers get too caught up in debating how many questions the FAFSA should be, rather than debating more nuanced issues that can have an impact for students and parents, such as problems with the FSA ID.

New America’s Amy Laitinen, who called the current state of student aid “untenable for students, parents, and taxpayers.”

Students who receive Pell Grants, for example, are increasingly taking on student loan debt, Laitinen said. That’s because many institutions are engaging in what she called the “Pell Shell” – using Pell Grant funds to supplant institutional aid they would have given the needy students, and instead directing it toward merit aid to recruit wealthier students.

There has also been an increasing reliance on student loans to finance higher education, Laitinen said.

“Schools and states know they can increase tuition because they know the federal government will funnel in the money,” Laitinen said. “We are in this untenable state, and the federal government can't keep providing incentives to finance through debt.”

Dan Madzelan of the American Council on Education said he thinks about student aid in three policy buckets: access, retention, and completion; the cost of college and student debt; and student learning and educational quality.

Moving forward, there needs to be more work toward finding a balance between holding schools accountable for the federal funding they receive while also maintaining access for students, Madzelan said.

You can read the most recent edition of NASFAA’s National Student Aid Profile – as well as previous editions – here.

 

Publication Date: 6/30/2016


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