House Committee on Education and Labor
U.S. House of Representatives

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Real Financial Aid Reform

Congressional Republicans have been fighting for years to shine a spotlight on the drastic increases in the cost of college and target student financial assistance in manner that ensures the funds are being spent on America’s neediest students.  We have issued reports, held multiple hearings, and introduced several bills (see here, here, and here).  And in response to these efforts, we were met with stiff resistance each step of the way. 

Yet as college costs have continued to rise, policymakers have become more open to real reforms to finally address college affordability head-on.  Solving these challenges remained among the top priorities for congressional Republicans in the recent reauthorization of the Higher Education Act, and that's why we worked with Democrats to include key college cost reforms in H.R. 4137, the Higher Education Opportunity Act.  For example, the bill allows students to search, sort, and compare key cost indicators for every school in the country.  In addition, the bill creates lists to identify the most expensive institutions, the least expensive institutions, and the institutions with the greatest cost increases, by percentage.  The schools with the greatest cost increases will be required to disclose additional information about what is driving their cost increases and what can be done to address them. 

We are encouraged to learn that the Secretary of Education is willing to step up and engage colleges and universities in this conversation.  In an interview with The Chronicle of Higher Education, Secretary Duncan indicated he is supportive of these ideas.  We are concerned, however, with the implication that the federal government can continue blindly spending merely to keep pace with the spiraling cost of college. 

The federal government does have a role to play, but it cannot be the only player.  States and families must also do their part, as must individual institutions of higher education.  Congress has put mechanisms in place to allow students and families to research college costs and select institutions that are right for them.  We have also taken steps to ensure that states continue to do their part to fund this country’s public higher education system. 

We need to let these reforms take hold before we make any drastic decisions -- such as the elimination of a long-standing student loan program -- that will have a long-term impact on the fiscal health of the nation.  Similarly, changes should not be made to the campus-based aid programs, like the Perkins Loan program, until the flawed distribution formula is addressed.  Currently, these limited funds flow to those institutions that have been in the program the longest, and not to those institutions who are actually serving the greatest number of needy students.

The federal government is presented with a unique opportunity at this time.  With the pressure of a reauthorization behind us, we should use this opportunity to take a step back and engage in a true examination of the student aid programs.  Rather than operating through the fast-tracked, arcane procedure of "budget reconciliation" to eliminate the Federal Family Education Loan (FFEL) program, Congress should engage in a healthy, deliberative debate over true simplification of all federal student financial assistance.

Posted by Education Policy Staff (05-05-2009, 11:37 AM) filed under Education

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