Proposals to Transform Student Financial Aid
A recent Washington Post article reviews the “ambitious” Obama administration plans to change the entire landscape for student financial aid. The article specifically cites the problem of students “amassing debt on a scale that approximates a home mortgage.” I recently posted about increasing concerns over student debt.
The article details how the president wants to terminate the Federal Family Education Loan program, shift all lending authority to the federal government through its Direct Loan program, expand the Pell Grant, provide priority access to Perkins loans for needier students, and to include incentives for colleges to cut costs and raise graduation rates.
While a fight is predicted, these changes are significant. And, while these changes don’t directly address the issues raised in my earlier post, those problems may be ameliorated or even directly addressed as the fiscal 2010 budget initiatives are made into law. As the Post article states, Democratic leaders hope to get the laws in place by October.
At least we know that concerns about student debt are being heard and changes are afoot.
Please feel free to leave a comment with your thoughts.
Mike
Share This4 Responses to “Proposals to Transform Student Financial Aid”
Mike Offerman Says:
Margo, thanks for your post. Capella has been working for nearly a year on the possibility of moving to direct loans. This has allowed us to test and pilot our approach. We continue to work on preparations and are ready to make the switch over the coming months.
Mike
Deborah Halasz Says:
As a former financial aid director, I appreciate the efforts that are being made to increase the financial aid (i.e., pell and perkins) for students. I am skeptical about the elimination of the FFELP program; however, in the recent years having lenders pull out of the student lending programs due to economic problems made my job increasingly difficult. Telling students you can choose any lender, oh but wait, you can no longer choose that one, was incredibly frustrating.
I hope these changes will be beneficial for students.
Mike Offerman Says:
Deborah, thanks for your post. I certainly share your hope that the changes will prove beneficial.
Mike
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Margo Simmons Says:
This unfortunately is not a surprised. When running for president as early as July 2007 Obama supported the elimination FFELP loans and expanding Direct Loans initiated by Clinton 1993. I suppose my biggest concern is whether a strategy will be developed by Capella to assist the streamline of FFELP loans to Direct Loans. Any guidance would be greatly appreciated.
May 26th, 2009 at 2:27 pm