Increasing ROI from FSA

Increasing Return on Investment from Federal Student Aid

This white paper calls on Congress and the Administration to redesign the student financial aid system to increase college graduation rates for low-income students, ensure financial stability of the system, and make paying for college manageable. 

Download the full paper here
Download Executive Summary Here
Read Press Coverage
Proposal Outline
About the Report

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Press Coverage

Rethinking Grants and Loans, Libby A. Nelson, Inside Higher Education, 12/5/12

NCAN Suggests Overhaul of Federal Student Aid, Beckie Supiano, Chronicle of Higher Education, 12/5/12

Group Calls for Overhaul of Federal Student Aid System, Diverse Issues in Higher Education, 12/5/12

Leverage Student Aid to Raise Graduation Rates, Diverse Issues in Higher Education, 4/8/13

Proposal Outline

NCAN’s report identified three main barriers that the current student aid system presents for low-income students: (1) the price of higher education, (2) complicated processes and out-of-date data that provide students with little relevant information, and (3) insufficient state and institutional support for students aimed at increasing graduation.

To address these barriers, NCAN proposed the following principles and policy suggestions:

Guiding Principle One: Prioritize Federal Dollars for First-Generation and Low-Income Students While Reshaping Aid for Those Repaying Their Student Loans

  • Keep the need-based Pell Grant program as the system’s centerpiece. 
  • As part of a package intended to better serve students and more efficiently target federal resources: 
  1. Maintain full funding for Pell Grants and restore year-round Pell Grants within the 12-semester lifetime limit.
  2. Refocusing a portion of current tax credits and subsidized loan program savings to the Pell Grant program.
  3. Promote and utilize the Income-Based Repayment program to help more low-income students to pay back their federal student loans by automatically enrolling all recipients in IBR.

Guiding Principle Two: Continue to Streamline the Student Aid Application Process and Provide Transparent, Relevant Information on Student Outcomes

  • Further simplify the Free Application for Federal Student Aid (FAFSA) by using prior-year tax return data to replace the FAFSA form. 
  • Overhaul the Integrated Postsecondary Education Data System (IPEDS) to collect student outcomes, not inputs.
  • Require institutional participation in the federal financial aid shopping sheet.
  • Expand public-private partnership programs with demonstrated results to provide much-needed information to students and families at a fraction of the price of a full-time guidance counselor. 

Guiding Principle Three: Ensure that States and Institutions Share Responsibility with the Federal Government to Support the Graduation of Low-Income Students, Financially and Through Other Assistance

  • Hold institutions accountable for student success through the federal campus-based aid program by distributing aid competitively based on student completion rather than by length of time in the program.
  • Enhance incentives for states to continue their support of public higher education and commitment to need-based aid using “maintenance of effort” in additional federal programs.
  • Reverse the merit-aid trend by designing federal and state programs that incent need-based aid.

About this Report

NCAN’s white paper was guided by a committee of 15 NCAN member organizations from 12 states and the District of Columbia that worked over four months. The committee was facilitated by Robert Shireman, former deputy undersecretary at the U.S. Department of Education. Committee members included representatives of the Louisiana Office of Student Financial Assistance, College Success Foundation, Florida College Access Network, Education is Freedom, uAspire, College Horizons and Graduate Horizons, Graduate! Network, East Bay Consortium of Educational Institutions, CollegeBound Foundation, and the office of scholarships and financial aid at Virginia Tech. 

NCAN received support to prepare the white paper through the Reimagining Aid Design and Delivery Project, part of the Bill & Melinda Gates Foundation’s work to dramatically increase the number of young people who graduate high school ready for college and career and who go on to complete a postsecondary degree or credential.