IHEP, NEBHE Reports Start Making Sense of Student Aid

The Washington, D.C.-based Institute for Higher Education Policy (IHEP) in January issued a white paper, Making Sense of the System: Financial Aid for the 21st-Century Student, recommending more than a dozen federal policies to help students access postscecondary education and ultimately earn valuable degrees and credentials.

Based on surveys and focus groups with leaders in business, higher education, civil rights and public policy, IHEP’s proposals include:

1. Create a system of early financial aid “accounts” that can leverage family savings and public/private resources.
2. Match family college savings for low-income households through public or employer dollars.
3. Make the American Opportunity Tax Credit fully refundable so it may be utilized by low-income households, and create a pilot program for early delivery of the credit.
4. Communicate potential financial aid awards in a statement, based on Internal Revenue Service information, that allows families to plan for the cost of college.
5. Maintain the Pell Grant program as the centerpiece of need-based aid and make it an entitlement.
6. Provide block grants to states to coordinate institutional student services and public benefits to financial aid.
7. Reform the Supplemental Education Opportunity Grant to provide institutions with money for “emergency” aid to students.
8. Institute a system of loan forgiveness for on-time completion for Pell-eligible students.
9. Tie campus-based aid to student debt repayment levels and degrees awarded, in addition to cohort default rates.
10. Create incentives for performance-based grants.
11. Incentivize that spending be maintained on need-based aid for students.
12. Incentivize pre-tax employer matching for student debt repayment for the first five years after a student has completed college.
13. Make Income-Based Repayment the default option for student-loan repayment.

Earlier in the month, NEBHE published a new Policy Snapshot on State Student Grant Aid in New England showing that the New England states together appropriated more than $181 million for state grant aid in the 2010-11 academic year–about 15% more collectively than they did in 2006-07. Among other things, the brief noted that New England states have historically allowed a portion of their state student grant aid to travel with residents when they attend a postsecondary institution in another New England state, but such “portability” and “reciprocity” agreements are threatened by the difficult economy.


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