Press Releases

National Panel Calls for Focus on Need-Based Financial Aid

01/15/03

WASHINGTON, DC -- Today on Capitol Hill, the Blue Ribbon Panel of the College Board's National Dialogue on Student Financial Aid (NDSFA) summarized its conclusions of a yearlong study, "Challenging Times, Clear Choices." The report recommends greater investment in financial aid, especially Pell Grants, which subsidize the attendance of low-income students, and a renewed commitment to need-based financial aid.

"If we do not turn the national conversation back to investment in education access and away from tax reduction, 'No Child Left Behind' will become just an empty phrase, representing broken promises, broken aspirations, and broken dreams," said College Board President and NDSFA Co-Chair Gaston Caperton.

The Blue Ribbon Panel reached agreement on 10 practical recommendations for action to be taken by the federal government, state governments, colleges and universities, and the private sector. Recommendations are listed in the report, and include action items to:

1. Substantially increase Pell Grant funding and guarantee adequate grant aid to cover average fixed charges (tuition, fees, room and board) incurred by students at four-year public colleges and universities nationwide-currently $9,700 per year;
2. Improve the terms available to students under the federally funded and guaranteed loan programs; design effective insurance policies for borrowers whose postcollege income is inadequate for repayment; provide loan forgiveness for students who enter and remain in certain key occupations and those who serve in high-need areas;
3. Assure that growth in "merit" programs is not at the expense of need-based funding, and that merit programs, while meeting other state needs, are still focused on promoting college access for needy students;
4. Reaffirm commitment to need-based student aid and strive to enroll larger numbers of students from low-income and underrepresented backgrounds;
5. Improve the design of and increase the funding for federal matching programs to induce states, institutions, and private entities to provide more need-based subsidies to students; increase the level of support to institutions that serve large percentages of high-need students;
6. Simplify the federal financial aid application process for students and reduce the regulatory/paperwork burdens imposed on institutions and financial aid officers; implement mechanisms for early notification of eligibility for financial aid;
7. Link increases in tuition to increases in need-based aid, to insulate financially needy students from effects of economic downturns;
8. Increase support for programs that provide college success skills and early information about college preparation, admissions, costs, and student financial aid, as well as those that connect and transition low-income and first-generation students to college and that promote retention and graduation;
9. Support federal student support services and provide incentives for institutions, states, and the private sector to fund student support and persistence services;
10. Support and expand the role of clearinghouses that monitor and report on the success of students.

The College Board and the Pathways to College network initiated NDSFA in 2001 to refocus a national discussion about financial aid. Shaped by a Blue Ribbon Panel on Student Financial Aid and supported by a team of top researchers, the NDSFA was created to inform policymakers and policy-shapers about the growing gap between student financial aid and student financial need and to offer possible solutions toward closing this gap.

"The College Board undertook this project because of our deep belief that education is the answer to so many of our nation's economic and social challenges. A strong national commitment to access and opportunity for college is critical to America's future," said Caperton. "A promise that no student shall be left behind is an empty promise if we can't provide access to a college education."

"Based on our research, it is clear that there are serious signs of stress on our country's financial aid system, and that in some key areas the system is headed in the wrong direction," said Michael McPherson, NDSFA co-chair and Macalester College president. "For example, the average Pell Grant now pays for about 42 percent of average fixed college costs, and when the program started, it covered 87 percent of such costs."

Aware that there were many ongoing dialogues on this issue, the NDSFA set out to bring together representatives of all concerned groups to exchange ideas, to explore the possibility of coordinating efforts, to focus on macro aspects of student financial aid, and to approach these issues in the context of today's political, social, and economic realities. At the press conference, Caperton noted that an important lesson can be learned from the federal government's commitment to the GI Bill of Rights in 1944, which led to education grants and support for returning veterans. "The result was an enormous increase in the size of the American middle class and a corresponding increase in taxes and economic activity. For every dollar spent on education, it is estimated that nearly seven dollars was returned to the American public," said Caperton.

The National Dialogue wouldn't have been possible without generous support from the Ford Foundation, Sallie Mae, and the Texas Guaranteed Student Loan Association--organizations with a commitment to promoting access to college for all students.

Contact info: Jennifer Topiel or Chiara Coletti, (212) 713-8052