Department of Education Announces Major Changes in Federal Financial Aid

The Department of Education is beginning to implement the first wave of initiatives based on the recommendations of the Commission on the Future of Higher Education. Department Secretary Margaret Spellings recently met with national leaders to discuss the recommendations of the commission's report, released in September 2006. Secretary Spellings emphasized the federal government's commitment to cooperating with states in order to create an educational system tailored to the 21st century economy and the needs of students.

 

Among the announcements is the unveiling of a new online tool to simplify the federal financial aid process. FAFSA4caster will help simplify the process of filling out the Free Application for Federal Student Aid and will provide users with an early estimate of a student's aid package. The site is the department's first step toward solving some of the problems with the financial aid system pointed out by the commission, which found that many students were discouraged from pursuing a college degree because of financial uncertainty. In the near future, the department plans to partner with states to use existing income and tax data to help students complete the FAFSA and to ensure that high school students can obtain financial aid estimates before the spring of their senior year.

 

Three states have volunteered to take part in a pilot study to evaluate the effectiveness of FAFSA4caster and to develop consumer information websites that help parents and students find out more about higher education options. The department plans to help Kentucky, Florida, and Minnesota build websites that will allow consumers to compare data from the colleges and universities in their state. The pilot effort will place a particular emphasis on providing information to nontraditional and underserved populations of potential students.



Last year's report found that current admissions and financial aid practices alienate many adults considering a return to school. These consumers often face a difficult a more decision about whether or not to enroll because of other financial responsibilities. By using FAFSA4caster and the new websites to obtain an earlier estimate of their FAFSA award, adult students may be able to make a more informed financial decision about enrollment.

 

Secretary Spellings also announced the department's agenda for higher education reform over the next few months. Top priorities include:

• Enacting increases for Pell and Academic Competitiveness (AC) grants. Under the president's proposed budget, the maximum for Pell grants would receive its first increase since 2003-04, and a 50 percent increase in the maximum award for the second year of the AC grant program.
• Building on FAFSA4caster and the consumer information pilot program to make the financial aid process more accessible and transparent;
• Creating a $25 million pilot program to track the performance and demographics of college students; and,
• Reauthorizing No Child Left Behind in order to improve data on graduation rates and college attendance, and to align high school curriculum standards with the needs of colleges, universities, and the U.S. economy.

Read Secretary Spelling's remarks at: http://www.ed.gov/news/pressreleases/2007/03/03222007.html