Blog: Federal Policy & Advocacy

Senate Education Committee Chair’s Reform Priorities: FAFSA, Loan Repayment, Accountability

Tuesday, February 5, 2019  
Posted by: Carrie Warick, Director of Policy and Advocacy
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NCAN members will be pleased to hear that simplifying the Free Application for Federal Student Aid (FAFSA) was a key focus of a recent speech from one of the top U.S. senators tasked with implementing federal education policy.

Yesterday, the chair of the Senate education committee, Sen. Lamar Alexander (R-TN), outlined his priorities for reform for the reauthorization of the Higher Education Act. The senator, who is retiring at the end of 2020, hopes to complete work on this bill – which governs federal higher education policy, including financial aid programs – by the end of the calendar year.

In his speech, the senator emphasized simplifying the FAFSA, streamlining income-based repayment for student loans, and creating an easy-to-understand accountability system that would apply to all institutions.

Simplifying the FAFSA

Sen. Alexander proposed a plan to simplify FAFSA that would cut the form from 108 questions to approximately 15 to 25. The senator is a longtime proponent of FAFSA simplification. He is known for often unfurling a paper copy of the FAFSA to prove his point about its unnecessary length, which he did again during yesterday’s speech.

In proposed legislation from previous years, Sen. Alexander suggested the FAFSA could be trimmed to include just two questions: 1) What is the student’s family size? and 2) What is the student’s family’s adjusted gross income? The slightly longer approach he presented yesterday is a nod to states and institutions that have insisted if the federal government only asks two questions to determine federal financial aid eligibility, they would need to again use their own forms to collect additional information.

NCAN is a strong advocate for FAFSA simplification policy that streamlines the form for students and maintains its universality.

Streamlining Student Loan Repayment

The second priority Sen. Alexander laid out is a simpler way for student loan borrowers to repay their debt. The senator would like to replace the myriad student loan repayment options available to borrowers with just two plan choices.

He proposed making income-based repayment the automatic repayment plan for all borrowers, rather than requiring people to proactively sign up for this type of plan, as is currently the case. Under the senator’s plan, borrowers would pay 10 percent of their income that is not needed for necessities.

But income-based repayment would not be the sole option for borrowers. Those who would prefer to pay off their student loans faster could opt in to a standard 10-year repayment plan.

The payments under both repayment plans would be made via payroll deduction. Borrowers who make payments for 20 years and have not finished repaying their debt would receive loan forgiveness.

NCAN supports reducing the number of loan repayment plan options while maintaining loan forgiveness at the end of a reasonable repayment time period.

College Accountability Tied to Loan Repayment Rates

The final priority Sen. Alexander outlined is a new accountability system for colleges. This approach would use program-level outcomes to hold colleges accountable. The metric driving this new accountability system would be whether borrowers who graduated from a particular program are repaying their student loans.

These changes would apply to public, nonprofit, and for-profit campuses alike. This is notable because the gainful employment regulations only applied to for-profit institutions.

“Other Good Ideas”

The senator also mentioned a long list of issues he’s discussed with senators on the Health, Education, Labor and Pensions Committee that he called “other good ideas,” including:

  • Expanding competency-based education.
  • Using uniform language on financial aid award letters.
  • Student loan counseling.
  • Improving data collection about schools to provide consumers with more information.
  • Changing reporting requirements to lessen the red tape institutional administration must wade through for federal research dollars.
  • Expanding the Pell Grant to incarcerated individuals.
  • Using the Pell Grant to pay for shorter programs.

Sen. Alexander’s discussion of the Pell Grant program mostly focused on making it easier for students to access their funds through FAFSA simplification. He also noted how Pell awards generally cover community college tuition.

One of NCAN’s priorities is to restore the purchasing power of the Pell Grant. The senator did not discuss increasing the Pell Grant program in any way for individuals and programs already eligible, mentioning only the two expansions listed above.

Completing the long overdue reauthorization of the Higher Education Act is a top priority for Sen. Alexander, who has also served as the U.S. secretary of education under President George H. W. Bush, governor of Tennessee, and president of the University of Tennessee. NCAN will continue to share progress on the Senate’s work on this crucial bill as well as solicit member feedback.

If you have any immediate reactions to these ideas, please contact me at warickc@collegeaccess.org.

(Photo courtesy of AEI)