Financial Aid Administrators Deliver New Loan Proposal

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A White Paper describing a new educational loan program has been released by a group of school financial aid administrators. The paper urges all entities involved in student loans to rethink the structure of the student loan programs.

A White Paper describing a new educational loan program has been released by a group of school financial aid administrators. The paper urges all entities involved in student loans to rethink the structure of the student loan programs.

Loans have become the major college financing option for students and parents, but as currently structured, these programs do not always address borrower needs. The proposed model departs from the current student loan programs in several ways. The model:

1.    Offers a single loan program to fund all of the student's educational costs,

2.    Provides income-aware repayment programs,

3.    Applies borrower benefits based on a student's economic status after graduation,

4.    Discourages excessive student borrowing.

While the White Paper represents the views of a broad cross-section of financial aid administrators serving different students in a wide variety of institutions across the country, it does not assume that all financial aid administrators agree with the concepts. The paper also does not address details on funding sources, which entities would participate and in what capacity, which the authors felt could be better addressed by other experts.

Four financial aid administrators authored the White Paper: Anna Griswold from The Pennsylvania State University, Dan Davenport from University of Idaho, Pamela Fowler from The University of Michigan and Rick Shipman from Michigan State University.

The paper is available at https://www.finaid.msu.edu/forms/NFEL/View.asp. Comments are encouraged and may be submitted on that Web site.

Background

In February 2006, a group of financial aid administrators met in a forum to discuss ways the student loan programs could be restructured to address the current realities of education financing. This White Paper resulted from the forum and suggested a student loan program with a greater focus on the needs of students that could potentially replace existing loan programs.

Participants in the forum developed the White Paper to stimulate conversation among all entities involved with the current student loan programs. It is hoped that through a nationwide vetting of these ideas and concepts, the financial aid community can move to implement a student loan program that will better serve students, families, schools and lending partners now and into the future.

Contact:     

Dan Davenport, University of Idaho, 208-885-7616

Pam Fowler, University of Michigan, 734-763 4119

Anna Griswold, Penn State University, 814-863-0507

Rick Shipman, Michigan State University, 517-353-4554

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Dan Davenport

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