NASFAA Reimagines the Design & Delivery of Student Financial Aid

Contact: Beth Maglione
VP of Communications
(202) 785-6944

Financial aid experts present broad ideas intended to generate discussion & debate 

WASHINGTON, DC, FEBRUARY 13, 2013. As the student aid programs rapidly approach reauthorization in 2014, they continue to face severe funding and efficiency problems. With grant assistance from the Bill & Melinda Gates Foundation through their “Reimagining Aid Design and Delivery” (RADD) project, NASFAA today released a policy brief examining the current systems of student aid with an eye towards reimagining how they could be improved in the future. This report does not make specific recommendations, but rather puts forward broad ideas intended to generate discussion and debate with the goal of advancing key policy issues facing student aid. 

Discussion Areas for Policy Reform

“The issues discussed in this brief were generated through a multi-step process, layered with healthy, challenging, and innovative discussion regarding the current and future states of the federal student aid programs,” said NASFAA President Justin Draeger. “While none of these policy considerations are put forward as definitive solutions, they are all worthy of additional consideration and discussion.” 

1. Examining the Value of Institutional and Student “Skin in the Game”: Can (and should) Title IV aid be used as a lever to change institutional and student behavior? 
  • Policy Consideration: Use a Super Pell to incentivize students to enroll in more credit hours.
  • Policy Consideration: Use a portion of campus-based funding to incentivize schools to create an environment that fosters better-than-predicted student outcomes.
2. Student Loan Reform: How can we protect academically-unprepared students from loan default while still maintaining access to a postsecondary education and – as appropriate – student loan funds?
  • Policy Consideration: Use a “Student Loan Eligibility Index” that would introduce minimal underwriting standards on federal loans to shield academically-unprepared students from loan indebtedness.
  • Policy Consideration: Rethink the entire concept of student loan default by implementing an automatic Income-Based Repayment plan for all borrowers. 
3. Streamlining and Improving Consumer Information: How can we make college and financial aid information more timely, effective, valuable, and concise? 
  • Policy Consideration: Make an early funding commitment to high school students through a Pell Promise to increase college-going rates and student outcomes.
  • Policy Consideration: Increase disbursement flexibility and the predictability of net costs to students by offering a Pell Well of funds for students to “draw” from throughout their undergraduate career.
  • Policy Consideration: Provide predictive wage information before students enroll to decrease indebtedness and improve student outcomes. 
4. Rethinking Entitlement and Professional Judgment: How can we ensure that schools have the appropriate tools to prevent excessive loan borrowing?
  • Policy Consideration: Provide schools with the authority to limit borrowing for groups of students while still allowing – on a case-by-case basis – students to borrow up to the federal annual loan limit.

In developing this brief, NASFAA convened a group of financial aid directors from across the country and from all sectors of higher education as well as a group of policy advisors and economists. NASFAA also solicited feedback from a separate group of aid administrators, student aid advocates, and higher education policy experts along the way.

The report will be discussed at a forum event on Capitol Hill this morning. Forum Speakers include:

  • Justin Draeger, NASFAA President
  • Craig Munier, NASFAA National Chair Elect; Director of Financial Aid, University of Nebraska
  • Terry W. Hartle, Senior Vice President, pision of Government and Public Affairs, American Council on Education
  • Kevin James, Legislative Assistant, Congressman Tom Petri
  • Karen McCarthy, NASFAA Policy Analyst 

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