Ope Actions

It is time to reexamine our overall postsecondary education student financing system. Postsecondary education ought to be a leader in helping to shape the future, not a follower. We must do everything possible to eliminate disparities in college attendance rates across groups. Therefore, the following options, some of which build upon recent initiatives of the Administration, should be considered.

1. The U.S. Department of Education should lead a dialogue on how postsecondary education should be financed. College presidents, leaders in national and state governments, students, economists, and business and community leaders should discuss how all the partners could share in helping to make college accessible for Americans from all groups. This examination and analysis should provide a road map for change in the next decade.

   Questions to be addressed should include: Should there be options for free public postsecondary education? If not, what should students and parents pay? How much should states and the federal government pay? What are the likely financial resources to be available to states and the federal government? How does this interact with expected demand, including increased demand from groups who are likely to be less well prepared? What is the role for private sources? What is the mix of aid—how do institutional subsidies, grants to students, loans, and tax policy interact? What is the appropriate balance among different sources of aid? How do all these questions and answers vary for different groups of students? What are the intergenerational issues—how do different options affect different generations? Are these the appropriate ways to transfer benefits across generations?

2. OPE should create a study group to examine the student aid system and the need analysis system. Its charge would be to design a simplified, easy-to-understand system that reflects the realities of today’s education and students and is flexible to meet tomorrow’s needs.

   This group would look at more detailed and more technical issues than the first group. Simplification would be the overriding goal: easier and earlier determination of need and aid eligibility. A simplified need analysis system—fewer variables, less open to gaming and unintended consequences, easier to understand and file, earlier application dates so students would know their eligibility earlier, adjustments for new modes of educational delivery and new types of students, and new sources of aid, such as tax credits—would be the goal here.

   The system for delivering aid should also be examined, particularly the design and delivery of loans. The existence of two major loan programs since 1993—Direct Student Loans and FFEL—has benefited students by providing students better benefits and service and reduced federal costs. We are at a crossroads, however, where a careful examination and analysis is needed on the future delivery of student loans. Income-contingent repayment (ICR) and the specific formula being used also need reexamination.

3. Building on its Think College Early campaign, the Department of Education should mount a major information campaign with its partners to ensure that all Americans know what college opportunities are available, how much they cost, and what aid is available to meet the costs.

   Despite the fact that much information is already available to students and families, many Americans are quite uninformed or have misconceptions about the true opportunities. The need for more public awareness to ensure that families know the real facts about college prices and student financial aid was raised many times in Agenda Project sessions. This information needs to be broadly available, especially to more at-risk students in the middle school years when they are making key choices about what classes to take, decisions that will affect their chances of college success in future years.

4. OPE should examine the role of student loans in helping families to pay for college and the effects of debt burden on students’ decisions about whether and where to go on to postsecondary education, and on their choices after leaving school regarding careers and graduate education. This effort should examine the effectiveness of different repayment options, including income-contingent repayment, and other alternatives, such as loan forgiveness. Possible options for changes in the next reauthorization of the Higher Education Act should be considered.

5. OPE should undertake a major effort to encourage lifelong learning, including an examination of what is occurring now and what the barriers are to more lifelong learning. This effort should look at administrative, regulatory, and statutory barriers.

6. OPE, together with its partners in postsecondary education and industry, should mount a major effort to examine the complex requirements now surrounding the student aid programs. The effort should examine ways to reduce requirements and increase flexibility to deal with new student demands and technologies while continuing to ensure accountability for taxpayer dollars. This effort should look at administrative, regulatory, and statutory barriers, including recommendations for the next reauthorization.

^