Keeping Education Accessible, Attainable With Financial Aid

A new study argues financial aid changes are needed to help struggling students complete their degrees.

The financial aid system needs to take steps to ensure college students graduate, a new report states.
The financial aid system needs to take steps to ensure college students graduate, a new report states.

Recently, we discussed MDRC's Performance-Based Scholarship Demonstration and whether scholarships alone can help students succeed in college. A big takeaway was that financial aid policies must address students' myriad struggles, which extend beyond financial need.

But any policies that address financial need must also consider these struggles, such as balancing job, family, and school responsibilities. That is, they are not mutually exclusive, and while additional services and support are needed, policies also need to be refocused to help combat these obstacles.

The "American Dream 2.0," a recent report from a coalition of advocates and experts, analyzes how the financial aid system can be revamped to support three pillars that are vital to students' success: access, affordability, and completion.

[Learn more about paying for college.]

The report first discusses the pervasiveness of financial aid in higher education. Funds in the $226 billion system go to almost half of all undergraduates and nearly every postsecondary institution. Students and schools rely on financial aid to survive and succeed.

Considering the extent of that power, the report sets a golden rule: First, do no harm. Students who leave school with debt and no degree are likely worse off than when they began, so the financial aid system has a responsibility to make sure these students graduate.

The study also recognizes that receiving financial aid can affect students' abilities to succeed, making it more feasible to enroll full time and to stay enrolled continuously through graduation.

With both those considerations in mind, the study's authors identify some key changes needed in the financial aid system.

First is the need to make financial aid "simpler and more transparent." This could help increase both initial and continuous enrollment, as many prospective students who could receive aid don't apply. The report emphasizes the need to streamline programs—without reducing levels of investment, of course—and reduce the burden of paperwork. The initial step of filling out the Free Application for Federal Student Aid can be overwhelming for some students.

Another priority is to "give families more and better information." The report's authors emphasize the need to collect and publish information on students' progression and completion, how much they pay and borrow, their ability to repay loans, job placement, and earnings.

They also advocate the creation of tables with federal grant and loan estimates to help families understand their prospects and obligations. That's pretty basic, and the Student Loan Ranger thinks it's kind of embarrassing those don't already exist! What does exist, fortunately, is the Department of Education's new College Scorecard, where parents and students can see how much a school costs, its graduation rates, students' debt, and other financial information.

[Know how to get a great financial aid package.]

Second, the report identifies the need for innovations that can lower costs, but also meet the needs of today's students. These include: revising remedial education; allowing students competency-based credits, such as for skills learned at work, rather than based on classroom hours; and using technological advancements.

All of these help support affordability by lowering the cost of education not just to students, but also to schools, such as by reducing the costs of producing a class. They also allow students to progress at their own paces, opening the doors for students who may not otherwise be able to ante up the time or money for a degree, "expand[ing] the pool of who can go to college and get a credential."

[Understand upcoming changes to financial aid.]

Finally, the report charges the shared responsibility for raising graduation rates to institutions, states, and students. The report's authors suggest increasing enrollment and completion by encouraging schools to support students and to encourage and reward low-income students for their progress.

States and organizations can do so in a variety of ways, including by linking aid to outcomes, such as academic milestones, and by setting expectations for earning additional aid or maintaining eligibility. Other steps could include rewarding colleges and students that exceed expectations by focusing on completion, student persistence and momentum, and for demonstrating success with disadvantaged students.

The heart of any solution must be the commitment to "protect access to opportunities for the neediest students," not penalizing students who work hard but may not complete, and ensuring low-income students aren't locked out. The takeaway is that the system must support access, affordability, and completion because, as the report notes, college attainment is "this generation's economic and civil rights issue"—a new prerequisite for the American Dream 2.0.

Radhika Singh Miller is a program manager for Educational Debt Relief and Outreach at Equal Justice Works. In 2008, she served on the Student Loans Team in the Negotiated Rulemaking for the College Cost Reduction and Access Act (CCRAA) and has extensive knowledge of this landmark legislation. She conducts educational webinars and presentations; advises schools and organizations; and advocates for legislation and policy. Prior to joining Equal Justice Works, Miller was a staff attorney at the Partnership for Civil Justice in Washington. She received her J.D. from Loyola Law School Los Angeles.