Triregional NYSFAAA 5709

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Tri-regionalNYSFAAA 5/7/09

• Rethinking Student Aid (College Board) - RSA
• Vs.
• National Conversation Initiative (NASFAA) - NCI
• Vs.
• President Obamas 2010 Budget Blueprint

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Sandy Baum and Michael McPherson fromThe
Chronicle of Higher Education, 4/3/09

• . . . Participants in debates over student-aid
  policy have a heavy responsibility in this new
  and exciting time. One option is to focus on
  details that defend narrow institutional
  interests, shifting money from one type of
  college or university to another or away from
  other actors. We can carry on a turf battle. A
  far better option is to join forces behind the
  principles of a student-aid system that works
  well for students and families. We dont just
  need more dollars. We need program designs that
  will assure students early on that the money will
  be there to help them enroll and succeed in
  college, and that they will be able to obtain
  that money easily. . . . As President Obama said
  about the economic stimulus package, this is not
  about pride of authorship, this is about
  supporting the best ideas.

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The College Board, NASFAA and President Obama all

• Share the goal of dramatically increasing the
  number of college graduates and agree that bold
  changes in the system are needed to realize that
  goal. (We will provide the support necessary
  for you to complete college and meet a new goal
  By 2020, America will once again have the highest
  proportion of college graduates in the world.
  President Obama, February 24, 2009.)
• Recognize the Pell Grant as the bedrock
  government funded need-based financial aid
  program
• Assert the critical importance of a Financial Aid
  system that is SIMPLE, CLEAR, and PREDICTABLE
• Emphasize the importance of success in college,
  not just access

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Program attributes of RSA and NCI that are the
same

• Focus on simplifying the process by which
  students apply for Federal aid by using IRS data
• End the Federal governments practice of paying
  in-school interest subsidies and, instead,
  concentrate on expanding options that make it
  easier for students to repay their loans based on
  their income or have their loans forgiven
• Link Pell Grant amounts to income and family size
• Eliminate Federal needs-analysis in favor of
  eligibility determination Replace it with
  look-up, easy-to-read tables

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Program attributes of RSA and NCI that are the
same (continued)

• Allow students whose families receive
  means-tested Federal benefits, like food stamps
  or TANF (Temporary Aid to Needy Families), to
  automatically qualify for the maximum Pell
• Fund savings accounts for young children as a way
  to promote early awareness of and preparation for
  college Provide aid eligibility estimates for
  families annually (Evidence clearly suggests
  that when young people cannot count on financial
  aid, they are less likely to attend college.)

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RSA vs. NCI vs. ObamaCost

• RSA Recommends more modest increase in Federal
  spending expectations
• NCI Recommends radically increasing Federal
  spending on student aid. (For example, NASFAA
  calls for increasing the maximum Pell Grant over
  five years to 70 of the average cost of
  attending a public 4-year college, which is now
  at 12,900 With the current Pell at 5,350 that
  change would cost 40 billion dollars)
• Obama Detailed numbers not available yet on the
  specific cost of his proposals

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RSA vs. NCI vs. ObamaPell

• RSA Links increases in Pell to annual increases
  in the Consumer Price Index
• NCI Links increases in Pell to increases in the
  costs of college
• Obama Creates mandatory funding for Pell which
  would transform the grant program into more of an
  entitlement program, like Social Security or
  Medicare This ensures a minimum level of funding
  that would increase every year, linked to the
  Consumer Price Index

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RSA vs. NCI vs. ObamaLoans

• RSA Create a line of credit with yearly
  maximums set at Federal poverty level for
  individuals, currently at 10,000. (The report
  does change the FFELP/DL system structurally.)
• NCI Create a single loan program, combining the
  best aspects of DL, FFELP and Perkins with loans
  financed by private, state, and other parties,
  originated by the Education Department and
  serviced by contractors
• Obama Eliminate subsidies to private lenders
  and originate all loans through DL Require
  lenders and other contractors to compete for
  servicing contracts Revamp the Perkins loan
  program to make its loans available to
  significantly more students at significantly more
  colleges and universities

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RSA vs. NCI vs. ObamaSuccess for low-income
students

• RSA Consolidate the current campus-based
  programs and re-distribute the money to
  institutions based on how successful they are in
  getting low-income students to continue in
  college
• NCI Consolidate the current campus-based
  programs and re-distribute the money to
  institutions based on the number of low-income
  students they serve
• Obama Create a 2.5 billion access and
  completion program that would give grants to
  states and other entities to develop programs
  designed to increase students success in college

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RSA vs. NCI vs. ObamaTax Credits

• RSA Combine existing education tax credits and
  deductions into a single, nonrefundable tax
  credit and allow it to be used to cover
  college-related expenses other than tuition and
  fees
• NCI Eliminate existing tuition tax breaks and
  redirect funds to Pell and IBR
• Obama Make permanent the 2500 tax credit for
  families college spending that Congress just
  passed as part of the economic stimulus package
  (American Opportunity Tax Credit.)

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Questions and Comments

• Cindy Bailey
• Senior Analyst
• The College Board
• 45 Columbus Avenue
• New York, NY 10023
• [phone]
• Cbailey_at_collegeboard.org