Student-Loan Programs Are Behind the Times

Students, Not Parents, Often Pay for Higher Education

American youth have bought into the idea that a higher education is a worthwhile investment. That’s because it is: a college degree comes with lifelong benefits like increased job satisfaction, decreased durations of unemployment, and financial stability.

The Free Application for Federal Student Aid (FAFSA) assists students in affording post-secondary education by assessing his or her family’s ability to pay, based on the Estimated Family Contribution calculation. Though seemingly progressive, the federal government’s policy toward funding higher education is severely outdated and current reform will further burden low-income, first-generation students.

As it stands, the Higher Education Act of 1965 (HEA) puts the onus on parents to pay for school before the federal government. This contentious political philosophy fails to account for the context of the 21st century. America is changing, and nostalgia is a dirty liar.

For a student to qualify for institutional, state, or federal financial aid in the United States, he or she must file the FAFSA with his or her parent’s information. It’s a very similar process to filing annual taxes: Students must file a new one each year, gather documents to validate the his or her family’s income, and dread the deadline every year.

It takes incredible persistence and patience to deal with the financial aid process in the United States, particularly for low-income and first-generation students. Legislators have argued for FAFSA simplification through various reauthorizations of the HEA, required every five years. The last reauthorization was in 2008, and in 2013 it was temporarily extended. Now, in 2018, it’s time for reauthorization.

Legislators are currently working to pass a bill from the House Committee on Education and the Workforce known as the Promoting Real Opportunity, Success and Prosperity through Education Reform (PROSPER) Act.

The bill embraces a few progressive education policies and would save the federal government money over time, but for low-income students the losses would far outweigh the gains.

One of its main features is a one grant and one work study program, complemented by a one loan program that effectively reduces the amount of choice a student has in financing his or her education.

It would eliminate subsidized loans for undergraduates, a loan option that defers interest until six months after a student leaves an institution. Also on the chopping block are loan forgiveness programs that benefit responsible borrowers or incentivize careers in the public sector, such as teaching or social work.

A lot can happen in four years — parents get sick, income is lost, and goals can change. Young people run out of money, out of energy, or lose motivation. This might explain why on average, in the United States, it takes six years to complete a four-year degree.

What perpetuates the student debt crisis is the fundamental fact that the modern American family fails to conform to the federal government’s expectation that it is the parent’s, not the student’s, responsibility to pay for school.

Families make decisions based on perceptions of responsibility. The families that saved for college believed it was the parent’s responsibility. Of those that didn’t save, more believed financing an education was the student’s responsibility than those who assumed it to be a shared responsibility. This economic behavioral trend is why American students need more flexibility and choice in federal financial aid, not less.

The PROSPER act will make it harder for students to attend college simply because it caps federal financial aid in spite of rising tuition hikes, trims budgets of student support programs like TRiO, and deters smart, hardworking students from attending graduate school to educate the next generation of scholars.

America must invest in its young people by providing the tools and resources necessary financial tools for low-income and first-generation students to access and succeed in higher education. The only way to ensure an equitable post-secondary education system in the country is for young students’ voices — instead of out-of-touch conservative politicians — to be heard in the push for progressive policies that reflect the values of the modern American family.