NCHER Legislative ConferenceSeptember 26, 2013

American Dream 2.0 Report and Coalition

• Consensus on the problem: Aid should be more efficient and effective

• Make aid simpler and more transparent

• Spur innovation to lower costs

• Ask institutions, states and students to share responsibility for completion

Doing Better for More Students: Technical Panel White Paper

• Simplify Financial Aid– One Grant, One Loan, One Tax Benefit

• Share Responsibility– Incentives for On-Time Completion

• Innovation and Experimentation– Invest in demonstration programs and

research

A Simpler More Effective System

• One Grant Program– Import IRS data, include look-up table

• One Loan Program– One loan with one set of terms– Automatic IBR– Market-based interest rate

• One Tax Benefit– Consolidate household tuition and fee

credits into a Lifetime Learning Credit

New features in the Comprehensive Single Loan Program help mitigate potential new risks to borrowers or taxpayers, such as:• Repayment schedule assuring middle and higher-income

earners pay back loans faster• New institutional eligibility to reduce number of

borrowers at high-risk institutions• Eliminate interest-free benefits and routine forebearance • Safety net of more generous income-based repayment

terms• Ability of institutions to restrict loan limits• Easier counseling with one loan program

Good borrowing decisions by students would continue to be critical

• Local counseling to insure best match, improve odds of completion and repayment

• Independent 3rd party maximizes the public benefit of new single IBR loan program

• Save the government defaulted loan expenses

Pell-Ready Grant Proposal• Pell-Ready Purpose: Test if it is possible to

finance remediation in a more cost-effective

way

• Competency-based remediation

• $1,800 grant for low-income students to

purchase remediation from a provider

• States chosen by the Department to

participate through competitive grant process

Performance Contract Demonstration

• Department could enter into performance based contracts with 10 states, systems of higher education, or large universities or consortia

• Department would provide multiple years of the federal aid allocation the entity would have received (averages adjusted for increases in cost)

• Grantee would agree to graduate more Pell students in less time– In return, the Department would grant flexibility – Rigorous evaluation and maintenance of access standards

attached

HCM Strategists, founded in 2008, is a public policy and advocacy consulting

firm that works with clients to align, advocate for, and advance public policies

that improve our nation’s education and health.

1156 15th Street, NW, Suite 850

Washington, DC 20005