The federal student-aid system is ill equipped to function in a world of growing budget deficits, low college-completion rates, and increasing ranks of students who rely on aid. That’s the premise of a white paper released on Wednesday by the National College Access Network, the latest in a line of papers suggesting changes in the system.
The paper, the organization’s contribution to the Reimagining Aid Design and Delivery project, financed by the Bill & Melinda Gates Foundation, suggests overhauling the system to focus on low-income students and to encourage college completion.
Its recommendations include restricting higher-education tax benefits to needier students and using the savings to bolster the Pell Grant program, designed to help low-income students.
Similarly, the paper suggests ending subsidized student loans, which undergraduates can qualify for based on financial need during college, and using that money both for Pell Grants and to improve the income-based repayment program, which students benefit from based on their postcollege earnings.
The white paper also proposes making income-based repayment, which many borrowers don’t know about, opt-out rather than opt-in.
And the paper recommends simplifying the aid-application process, providing prospective students with better information—including on outcomes such as graduation rates for Pell recipients—and focusing state and federal dollars on need-based aid.