Originally posted on The Hill’s CongressBlog on November 12, 2013
By Jennifer Mishory
The Great Recession ravaged young people more than any recession since WWII. Youth unemployment remains stubbornly high and wages for young workers have fallen. Less educated young people were the hardest hit of anyone. At a time when our struggling economy needs a well-educated workforce, going to college has never been more expensive.
This is a recipe for disaster.
Thankfully, Congress has the opportunity to make some of these necessary changes when it begins its work to reauthorize the Higher Education Act. There’s a lot of work to do, but here are few to start with.
The problems start early: even accessing financial aid can be a struggle. The complexity of the 10-page, 106 question FAFSA form, prevents millions of financial-aid eligible students from accessing the support. Assuming students manage to navigate the maze to receive federal grants and loans, the federal loan counseling system fails to deliver the information they need to understand the loans they’re taking out. Fortunately, we can fix this problem cheaply and quickly. We should slash the number of questions on the FAFSA and improve loan counseling so students can receive and understand their financial aid.
Once a student applies, they can get a sense of what type of aid they qualify for. This is when Congress can do its part to reduce debt burdens in the first place. The Pell grant is the foundation of federal aid and primary tool for ensuring access and affordability for hardworking students across the country. However, soaring tuition means the Pell grant covers a lot less than it used to. Further, Congress must appropriate money for the grants every year, meaning that fluctuations in the number of qualifying students creates periodic shortfalls. As a consequence, it has cut grant aid to eligible students several times in recent years. This makes no sense in an age when higher education is more important than ever to individual success and to growing our economy. And while states have a big role to play in keeping college costs low, Congress shouldn’t stand on the sidelines: it should bolster the Pell grant program and mandate funding for Pell grant aid to ensure that all students who need it receive aid.
But as those who still must take on debt (about 2/3 of graduating college seniors) know, leaving college and repaying student loans these days knows just how difficult it can be. Whether it’s working with irresponsible loan servicers or scrounging the money together every month to make a payment and avoid default, graduates have never faced more strain in repaying their loans. It’s no wonder that student loan default rates are in the double digits. Federal student loan borrowers have the option to enroll in one of several Income-Based Repayment plans (IBR) that ensures affordable monthly payments based on a borrower’s income. Unfortunately, few loan holders know that IBR is an option. To fix this, Congress should streamline the process and automatically enroll all borrowers into IBR. Everyone would be able to make affordable payments in tough times, and still pay down their loans when their situation improves. We can even hold schools accountable when their graduates aren’t paying them off.
These ideas are just the beginning. For young people to have the skills they need to succeed, Congress needs to act, and it needs to act swiftly. Every year that we fail to address our financial aid system’s obstacles, more young people find themselves handicapped by the realities of the 21stcentury workforce. This generation can’t wait – and neither can this country.
Mishory is deputy director of Young Invincibles.