Rep. Andrews, Top CFPB, White House & Congressional Officials Address Barriers to College and U.S. Competitiveness in a Global Economy

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Pell Grants, Financial Aid Award Letters & Student Loan Interest Rates Discussed at NASFAA’s Legislative Symposium

Rep. Robert Andrews (D-NJ) and top officials from the Consumer Financial Protection Bureau (CFPB), the White House, Congress and the National Governors Association will gather today at the National Association of Student Financial Aid Administrator’s (NASFAA) annual Legislative Symposium to address policies around federal financial aid, student loan interest rates, and consumer disclosures – all topics of critical importance to the future U.S. economy and to college-bound students and their families.

Rep. Andrews, who serves on the House Education and the Workforce Committee, will offer a keynote address to more than 100 financial aid professionals, college and university government relations staff, association leadership, and members of the higher education community.

“Access to higher education for all Americans is vital as we transition to a 21st century economy,” says Rep. Andrews. “Ensuring federal aid programs are fully funded and that aid is available to all citizens who want to make a positive contribution to our nation is a wise investment in our children’s futures, and in the United States.”

“Hardworking financial aid officers keep students informed of financial aid options in a complex marketplace, and I thank you for your efforts,” Andrews adds.

Guest speakers include Rohit Chopra, Student Loan Ombudsman for the Consumer Financial Protection Bureau (CFPB), and Joan Wodiska, Director of the Education, Early Childhood & Workforce Committee at the National Governor’s Association.

The feature panel, “The Outlook for Student Aid Funding,” includes Zakiya Smith, Senior Advisor for Education at the White House Domestic Policy Council; Amy Jones, Higher Education Counsel & Senior Advisor, Education and the Workforce Committee; and Ben Miller, Office of Planning, Evaluation and Policy Development, U.S. Department of Education. Jason Delisle, Director, Federal Education Budget Project at New America Foundation, will moderate.

“One critical piece to solving the economic recovery puzzle is shoring up the long-term prospects of federal student aid programs. Deficit reduction and budget deals must not be made on the backs of low-income students via short-sighted cuts to vital programs like the Pell Grant or increasing interest rates on subsidized Stafford student loans,” says NASFAA President Justin Draeger.

“Now more than ever we need a laser-sharp focus on what students need,” says Pamela Fowler, Chair of NASFAA’s Board of Directors and Director of Financial Aid at the University of Michigan. “For example, when it comes to financial aid award letters, the focus should be on what students and parents need to know in order to decide what’s best for them. Colleges need the flexibility to deliver this information in innovative and relevant ways.”

Issues for discussion include ensuring reasonable student loan interest rates, the need for transparency and appropriate consumer disclosure in award letters, and protecting the Pell Grant Program.

Student Loan Interest Rates
On July 1, 2012, the interest rate on subsidized student loans will double, increasing from 3.4 percent to 6.8 percent. This new rate, which is higher than the current market rate, will increase debt for the borrowers of these need-based loans. This means more students will turn to private loans with lower interest rates and forego important consumer protections that federally subsidized loans offer, like deferment, public service loan forgiveness and generous repayment options. President Barack Obama has offered some temporary relief by suggesting the interest rate not spike for at least another year, but this is at best a temporary fix. We must find a permanent, sustainable solution to providing low-cost, predictable federal loans to students and parents.

Consumer Disclosures
Award letters are received by millions of students every year to inform them about their financial aid award package and expected educations costs. Transparency and consumer disclosures are critical as families make decisions about financing a college education. While the review of current award letter practices is welcomed, it is best to avoid complete standardization, so that institutions may retain the flexibility to provide information that best suits their students. A single, standardized award letter would be problematic for institutions which are extremely diverse amongst themselves and in the types of students they attract. Standardized terminology and/or elements, rather than entire standardization, is better for students.

Student Aid Funding
As we speak, the Pell Grant, the cornerstone of the federal student aid programs, is helping more than 9 million of our nation’s low- and middle-income students access higher education. Without this grant, it is likely that many of them would not be able to attend college. Properly funding the student aid programs is an investment, not an expense, which will create more skilled workers, jobs and taxpaying citizens. After all, by 2018, nearly two-thirds of all jobs in the U.S. will require some form of postsecondary education or training, according to Georgetown University’s Center on Education and the Workforce.

Today’s Symposium also set the stage for the lobby day on Tuesday, March 6. Leaders from state and regional financial aid associations will meet with members of Congress to discuss the dire need for long-term solutions – versus short-term Band Aids – for the financial aid programs that are critical to ensuring U.S. competitiveness and college access and affordability for low-income students.

About NASFAA
The National Association of Student Financial Aid Administrators (NASFAA) is a nonprofit membership organization that represents nearly 20,000 financial aid professionals at 2,800 colleges, universities, and career schools across the country. Each year, financial aid professionals help more than 16 million students receive funding for post secondary education. Based in Washington, D.C., NASFAA is the only national association with a primary focus on student aid legislation, regulatory analysis, and training for financial aid administrators. For more information, visit http://www.nasfaa.org.

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Haley Chitty
NASFAA
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