Senators Working to Streamline Process for Federal Student Loans
On January 18th, U.S. Senators held discussions to make the federal student loan process more efficient.
On Jan. 18, senators held discussions to look at methods to make student loans simpler and better.
In those discussions, the reauthorization of the Higher Education Act was under scrutiny by the Senate Committee on Health, Education, Labor and Pensions. This act mandating federal help for students who plan to attend college came into existence in 1965 when it was signed by then-President Lyndon B. Johnson.
Why Are They Looking at New Methods?
As part of this act, the Free Application for Federal Student Aid (FAFSA) was begun. This is the application process the majority of students fill out each year while attempting to land student aid.
The FAFSA is the stepping stone students must undertake if they hope to maximize the aid they receive for college. Their chances of landing assistance are good with this program. Almost every student who applies for federal aid is eligible for some assistance.
But in 2011-2012, up to 20 percent of undergraduate students didn’t fill out the FAFSA. It’s partially this lack of use, along with the frustration of the complicated process, that has caused politicians to take a closer look at the system to see where the application process can be simplified. They’re also interested in making the system more transparent.
One of the champions of the movement to bring about changes in the federal aid process is Committee Chairman Senator Lamar Alexander (R-Tenn.). During the last Congress, he brought forth legislation aimed at simplifying federal student aid.
“It would combine two federal grant programs into one grant program and reduce five federal loan programs into three,” Alexander said in an WJLA online article.
Those three programs would each be aimed at different segments of the post-secondary educational experience. One loan program would be geared toward parents, while another would go toward graduate students. The third would be for undergraduate students.
Additionally, it would make payment options more transparent. Those options can be notoriously difficult to figure out and weigh for students who may not be used to dealing with choices on how to handle such potentially large debt loads.
If this legislation is approved, those complicated repayment options would be a thing of the past. Students would have two easy-to-understand options instead when deciding how to best pay back their loans. They would be able to select between a 10-year repayment timeframe or an income-based repayment plan.
Income-based plans may be particularly useful in preventing those with lower-paying jobs from defaulting on their loans.
How the Application Process May Be Made Easier
It’s a challenge to convince some students to apply for FAFSA. Some mistakenly think they won’t be eligible for funding, so they don’t want to waste time filling out a complicated form.
Right now, today’s students face a FAFSA that has just over 100 questions. Some of that information is redundant for the families or students who are filling out the form – it’s already been collected by the government for taxation purposes.
Alexander has proposed using the information already collected and only asking students to fill out information the government doesn’t already have. That would mean the new form could be pared down to around 25 questions.
Proponents hope the simplification will convince more students to fill out a FAFSA so it can make college a more affordable option for them.
Image Copyright © Anthony Quintano