In today's globalized workforce, finding a good job and realizing the American Dream requires some form of education after high school. While the federal government has helped millions of students access higher education, it hasn't maximized return on its investment because too many students drop out before earning a degree. The federal government needs to simplify the financial aid application process and have more accountability for federal dollars in order to ensure that students don't just start college, they finish.
Under the current federal financial aid system, far too many students are shut out of the process. The current patchwork of federal student aid programs is a significant barrier, rather than an assistive tool, for many students because the system to obtain financial aid is complex and difficult to navigate. Additionally, colleges are not required to provide any nonfinancial support, such as academic counseling, that helps ensure program completion. These barriers, combined with rising program costs--Pell Grants, Stafford Loans, and other federal aid to college students last year alone reached $215 billion--and failure to support students, mean a change is needed.
Repairing a Broken System: Fixing Federal Student Aid, a new report released by my organization, the Alliance for Excellent Education, offers four solutions for making the federal student aid system more coherent and effective at graduating students: (1) instituting student support systems within colleges and other postsecondary institutions; (2) simplifying the Free Application for Federal Student Aid (FAFSA) process; (3) focusing student aid on the highest-need students; and (4) condensing the tax incentives available to middle-class families.
The importance of simplifying the FAFSA process cannot be overstated. Last school year alone, 750,000 applicants walked away from the financial aid process altogether, many due to the overly complicated forms. Rather than including numerous questions about parents' income and assets, the FAFSA should be condensed into three basic questions based on the poverty index to determine financial need. Additionally, a public reference chart could help students and families determine a student's Pell Grand award amount using only their adjusted gross income, family size, and dependency status. For many students, knowing how much aid they could expect to receive would make the difference between seeking and completing a degree and not.
The federal student aid system needs to focus on the ultimate goal: graduating students from college. In order to make this a reality, colleges need to be held accountable for graduating their students. Among other things, colleges and universities participating in federal student aid programs should be required to publicly report graduation rates for student aid recipients versus the school population at large. Postsecondary institutions should also be required to inquire and report why students fall below half-time status or dropout completely.
Low-income students aren't the only ones who could benefit from a revamped federal financial aid system; middle-class families also feel the financial strain of supporting degree-seekers. By combining the two current higher education tax credits with an added allowance for a portion of the cost of attendance at a higher education institution, the financial burden placed on middle-class families would be lessened.
Americans know the value of higher education. That's why tens of millions of people enroll each year. They understand the difference between making $13 per hour--the average hourly rate for a high school graduate--versus the $25 per hour that the average college graduate makes. The former would place a family of four only a few hundred dollars away from poverty, while the latter would provide this same family with a solidly middle-class life.
For the U.S. economy to truly prosper, the nation must ensure that all students, especially low-income and students of color who will soon make up a majority of the American population, have access to higher education, receive the financial and academic support they need to succeed, and graduate with the degree that is their ticket to a good-paying job.
Congress can help students achieve postsecondary success by fixing the federal student aid system to focus on completion. The sooner lawmakers make these changes, the sooner more students will realize their American Dream.