Strengthening the Federal Student Loan Program for Borrowers Congressional Written Testimony

Chairman Harkin, Ranking Member Alexander, and Members of the HELP Committee: I am deeply appreciative of the opportunity to participate in this hearing discussing strategies for strengthening the federal student loan programs. 

My name is Michelle Asha Cooper, and I am president of the Institute for Higher Education Policy (IHEP). IHEP is a nonpartisan, nonprofit organization committed to promoting access to and success in higher education for all students, with a focus on students who have been underserved by our postsecondary educational system. Based in Washington, DC, we believe that all people, regardless of background or circumstance, should have the opportunity to reach their full potential by participating and succeeding in higher education. And working together, we can do more to make that dream a reality.

We believe that institutional leaders and policymakers must support strategies that enhance the quality of the postsecondary experience in ways that are appropriate and relevant to the demands of the 21st century. As such, it is necessary to reassess and, in some cases, redesign our policies to ensure that they open doors and facilitate the success of today’s students–a growing percentage of whom are low-income, first-generation, students of color, and returning adults.

The reauthorization of the Higher Education Act is an opportunity to examine Title IV financial aid programs, including student loans, within this context. In seeking to improve these programs, we must ensure that our policies and strategies help today’s students complete college with manageable debt levels that can be repaid in an affordable, easy, and timely manner. In support of this goal, IHEP offers the following recommendations for federal policymakers that reflect three strategic areas:

Informed Choices

• Provide students with better information—more useful data presented in a useable format—that can inform decision-making about how to choose and how to pay for colleges that offer real value.
• Improve student loan counseling—the timing, content, and delivery—so that it helps more students make better borrowing and repayment decisions, which may help them avoid delinquency and default.

Simplified Options

• Streamline federal loan repayment options and ensure that information about eligibility and terms are sensible and simple.

Shared Accountability

• Improve the shared accountability framework used in college finance by holding states and institutions more responsible for high loan debt and defaults.

Details about each of these recommendations are provided in this testimony. As background on these recommendations, we provide the following overview of recent trends in student aid…read more