Published: October 10, 2008 11:26 am            

Needed reform — 10/13/08

Recommendations may lead to real changes in student aid

Former West Virginia Gov. Bob Wise — now president of the Alliance for Excellent Education — spoke wisely and accurately of the critical need to reform the Federal Student Aid program:

“As college becomes increasingly unaffordable for families, there must be a bolder approach to student aid. Increasingly, earning a living wage in this country requires postsecondary education, but the current system discourages many students from attempting to go to college or saddles them with crippling debt.”

Fortunately, the privately-funded College Board has increased the possibility of real reform of student aid with its recent report entitled “Fulfilling the Commitment: Recommendations for Reforming Federal Student Aid.”

Even if only a few of the report’s recommendations are actually enacted into law, it at least has succeeded in shedding much needed light on the status quo, which is causing some young people from families of modest means to conclude that college is simply unaffordable while others graduate from college deeply in debt.

The College Board’s report — written by a group of college financial aid professionals who daily deal with the problems young people face in attempting to pay for their college education — calls for a sweeping overhaul of the federal student aid system, including eliminating the federal application for financial aid and helping low-income parents save for their children’s education at an early age.

The report primarily focuses on helping students from low- and moderate-income families who likely could not afford to attend college without some assistance. It argues that the current system is so complex and confusing that it discourages many families from even considering college because they don't think they can afford it.

Changes to the federal financial aid system would require congressional approval. The federal government distributed more than $86 billion in grants, loans, tax benefits and other aid in the 2006-07, but the New York Times recently reported that so many people are seeking need-based financial aid this year that the federal Pell Grant program for low-income families may face a $6 billion shortfall.

The study group recommends:

--Eliminating the current application form for federal student aid, and instead get financial information needed for most families from the IRS.

-- Basing eligibility for federal Pell Grants only on family size and adjusted gross income. That data could be packaged and presented in easy-to-access tables that would enable families to estimate how much they would get, based on their current financial circumstances.

-- Replacing the 10-year-mortgage-style loan repayment plan with a graduated plan, so that payments would rise over time along with the incomes of most borrowers.

-- Developing a federal savings program for the children of tax filers and participants in other federal income-support programs whose children would be eligible for Pell Grants if they were of college age.

We recognize that with the federal budget bleeding red ink, it is not a good time to be recommending changes that could increase federal spending, but from our vantage point, money spent to increase the chances of Americans earning college degrees is an investment, not an expense.

Nowhere is that more true than in Kentucky. This state lags far behind the rest of the nation in its percentage of adults with college degrees, and this corner of Kentucky has a lower percentage of college grads than Kentucky as a whole.

The bottom line is this: If Kentucky does not significantly increase the level of education of its adult population, this state simply will not be able to compete with the rest of the nation for good-paying jobs.

It is not a question of whether Kentucky and the nation can afford to help more young people from lower income families attend college. The state must make the investment necessary to get more people in collge. The economic future of Kentucky depends on it.

        

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