While the average graduating senior who took out student loans leaves college with what should be a manageable level of loan debt—around $26,500—concerns about student debt are persistent and widespread.
The National Association of Student Financial Aid Administrators took account of that broad concern and decided to convene a task force of its members to comb through research and trends, and offer recommendations for improving the student-loan system.
On Wednesday the association, known as Nasfaa, released a report laying out those recommendations, which have been endorsed by its board.
The recommendations call for:
- Allowing aid administrators to set lower loan limits under certain scenarios. (Nasfaa also included a version of this idea in its white paper for the Reimagining Aid Design and Delivery project, sponsored by the Bill & Melinda Gates Foundation.)
- Discontinuing the in-school loan subsidy and instead subsidizing borrowers by automatically placing them in an income-based repayment program.
- Setting a fixed interest rate on loans each year based on what it costs the federal government to make and service the loans.
- Separating the Grad PLUS and Parent PLUS loan programs and holding parent borrowers to tighter underwriting standards.
- Creating a single online portal where borrowers can get information on all of their student loans, including private and institutional loans.
- Standardizing the servicing of loans.
- Rolling required entrance and exit counseling into the government’s Financial Awareness Counseling Tool.
- Streamlining regulations for preferred-lender lists and requiring colleges to certify students’ private loans.