Late last year, the Bill & Melinda Gates Foundation awarded grants to a collection of think tanks, associations, and other groups to produce reports as part of the foundation’s Reimagining Aid Design and Delivery project. Each of the 16 recipients had its own ideas about how to improve student aid, but a handful of key ideas cropped up in a number of reports. The chart below explores some of the most-popular proposals. (Related article: To Fix Student Aid, First Try to Understand It)
| Student-loan repayment plans | Consumer information | Simplified financial-aid application | Tax-benefit reform | Pell Grant program | Student-loan system | College accountability measures | |
| Alliance for Excellent Education |
| ✓ Require colleges to publicly report persistence and graduation rates for student aid recipients | ✓ Use only AGI, dependency status, and family size to assess need | ✓ Merge tax credits and limit them to students who enroll full-time at least one semester a year | ✓ Target Pell Grants to the neediest students and increase their awards; provide additional aid to high-performing students; if students drop out or drop below half-time, convert their Pell grants into loans | ✓ Abolish Perkins loans and end the in-school interest subsidy on Stafford loans | ✓ Tie colleges’ eligibility to award federal aid to student withdrawal and graduation rates; reward institutions that increase their Pell persistence rates with additional aid |
| America’s Promise Alliance |
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| ✓ Ask colleges to help parents and students complete Fafsa and provide continuing financial counseling to at-risk students |
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| ✓ Hold colleges accountable for student graduation rates |
| Association of Public and Land-Grant Universities |
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| ✓ Simplify and better target tax benefits; require recipients to demonstrate satisfactory academic progress |
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| ✓ Withhold or reduce aid to college with low loan-repayment rates or high default rates, using a risk-adjusted trigger; provide additional aid to colleges with good rates |
| Center for Law & Social Policy |
| ✓ Require colleges to report data on the graduation rates of Pell recipients, their transfer-of-credit policies, and their costs; ask federal and state governments to collect data on certificate and degree attainment, employment, and earnings by major |
| ✓ Eliminate all tax credits and benefits except for American Opportunity Tax Credit; increase the refundable portion of it |
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| Committee for Economic Development | ✓ Make income-based repayment the default option |
| ✓ Abolish Fafsa and have the IRS calculate the expected family contribution using tax returns | ✓ Eliminate higher-education tax credits | ✓ Replace Pell Grants with a federal-state matching grant |
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| Education Trust | ✓ Move toward income-based repayment as the default option, but focus it on the neediest borrowers | ✓ Require states to create a “return on investment” index score for programs, based on wage data |
| ✓ Consolidate tax benefits and lower the eligibility cap for the American Opportunity Tax Credit | ✓ To shore up Pell program, adjust the program’s baseline, tighten the rules for the return of federal aid, and create a rainy-day fund | ✓ Eliminate loans for low-income families; let middle-income families borrow interest-free | ✓ Provide grant aid to states, based in part on measures of student access and success; require institutions receiving the aid to meet standards for enrolling and graduating low-income students; require students receiving grants and interest-free loans to work 10 hours a week and complete their degrees within 150 percent of normal time |
| Excelencia in Education |
| ✓ Provide information about college costs and outcomes through social media and other nontraditional outlets | ✓ Allow students to complete the Fafsa as part of their income-tax submission |
| ✓ Make Pell an entitlement; allow federal aid to be used for remedial education | ✓ Create loans that convert to grants with timely completion |
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| HCM Strategists | ✓ Place all borrowers in income-based plan with years to forgiveness based on total debt; high-income borrowers would pay 15 percent of discretionary income, and low-income borrowers would pay 10 percent | ✓ Publicly report student outcome metrics, including completion and loan repayment rates | ✓ Determine eligibility based on adjusted gross income and family size for most students; automatically award full Pell to students whose families get means-tested benefits | ✓ Streamline tax benefits, offering only one non-refundable credit, based on the Lifetime Learning Credit, that will be made available to students in emerging education models, or limit the American Opportunity Tax Credit and use the savings to expand grants or experimental studies | ✓ Offer a larger Pell Grant or the current max as an incentive for students taking enough credits to graduate on time, and prorate grants for students taking fewer credits | ✓ Offer only unsubsidized federal loans, with fixed market-based rates and no deferment or forbearance benefits; set one loan limit for undergraduates and one for graduate students and charge interest during school | ✓ Use an “institutional effectiveness index” based on access, loan repayment, and input-adjusted completion rates to determine Title IV eligibility |
| The Institute for College Access & Success | ✓ Streamline and improve income-based repayment option, but still give students a choice between it and a payment plan based on the total amount they owe; place delinquent borrowers in the income-based option | ✓ Provide information on debt, default, and graduation outcomes to prospective students; offer better loan counseling; require colleges to use a standard aid award letter | ✓ Base aid on tax data available when students apply; streamline the verification process | ✓ Eliminate tax benefits or, if tax benefits are kept, streamline them and focus on lower-income students | ✓ Double the maximum Pell Grant and make the program mandatory | ✓ Provide a single undergraduate loan with a fixed rate and no fees; let the rate rise when students graduate but never exceed a set cap | ✓ Hold colleges accountable for their Student Default Risk Index, which accounts for the share who borrow, rather than cohort default rate; offer risks and rewards to colleges depending on how well they do on this measure |
| Institute for Higher Education Policy | ✓ Make income-based repayment the default option and offer employers incentives to help students repay their loans |
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| ✓ Make the American Opportunity Tax Credit fully refundable so it may be utilized by low-income households, and create a pilot for the early delivery of the credit | ✓ Make Pell an entitlement and index it to inflation |
| ✓ Tie campus-based aid to student-debt-repayment levels and degrees awarded, in addition to cohort default rates; increase aid to students as they progress toward completion and provide loan forgiveness to Pell recipients who graduate on time |
| National Association of Student Financial Aid Administrators | ✓ Automatically enroll borrowers in income-based repayment | ✓ Give students predicted wage information before enrollment) |
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| ✓ Commit Pell funding to eligible high schoolers, and in college, give students a “Pell Well” to draw down through their college years; give students additional Pell for taking more credits | ✓ Use a “Student Loan Eligibility Index” that would introduce minimal underwriting standards on federal loans to shield academically unprepared students from loan indebtedness; give aid offices authority to limit borrowing for certain groups of students | ✓ Use part of campus-based funding to incentivize schools to foster better-than-predicted student outcomes |
| National College Access Network | ✓ Make income-based repayment ‘opt-out’ | ✓ Require colleges to use the shopping sheet; overhaul Ipeds to focus on outcomes; use public/private partnerships to inform prospective students at a low cost | ✓ Use tax data from two years before enrollment on the aid application | ✓ Lower income caps on tax benefits and use savings to shore up Pell program | ✓ Maintain full funding and bring back year-round Pell | ✓ End student-loan subsidies and use the savings to expand Pell grants and improve income-based repayment | ✓ Award campus-based aid to colleges based on student outcomes |
| National Urban League |
| ✓ Require early financial-literacy education; create postsecondary affordability workshops; work with community-based groups to do outreach |
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| ✓ Change how interest rates are set; offer lower interest rates to students from underrepresented groups who do outreach in their communities | ✓ Require colleges to provide detailed cost information |
| New America Foundation | ✓ Make a modified income-based repayment plan the only option; restore bankruptcy protections to private loans | ✓ Require colleges to use the shopping sheet; expand the “gainful employment” reporting requirements to all colleges; withhold aid from those with low loan-repayment and job-placement rates; limit aid to those with mediocre results | ✓ Research ways to simplify the Fafsa and consider whether the application should be necessary for all tax filers | ✓ End federal tax benefits in favor of direct aid | ✓ Make Pell an entitlement and increase the maximum award; limit eligibility to 125 percent of program length; restore year-round Pell grants and aid to students who don’t have high-school diplomas or GEDs but pass a basic skills test | ✓ Set one loan limit for all undergrads, regardless of dependency status; let colleges set lower limits; limit loans to 150 percent of program length; end loan subsidies; peg interest rates to the 10-year Treasury note; end Parent and Grad PLUS programs and increase loan limits for graduate students | ✓ Provide Pell bonuses to colleges that serve large shares of Pell recipients and have strong student outcomes; require Pell matching for colleges that enroll small shares of recipients and charge them high net prices |
| U.S. Chamber of Commerce | ✓ Provide federal aid as a loan that would be forgiven as students reach benchmarks toward completion | ✓ Publish more data about labor-market outcomes for college graduates; plug the holes in Ipeds |
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| ✓ Provide more aid to students who pursue high-demand degrees; allow federal aid to be used for dual-enrollment and AP courses, as well as certificate and non-credit-bearing programs | ✓ Consider having just one grant program and one loan program | ✓ When students don’t complete their degrees, require colleges to repay a portion of their debt, or create a risk pool of noncompleters and have colleges pay premiums proportional to their cost and completion rates |
| Young Invincibles | ✓ Automatically enroll borrowers in income-based repayment | ✓ Improve online counseling tools; increase access to counselors; create a new online hub with data on student outcomes | ✓ Simplify the Fafsa and award letters | ✓ Consolidate existing benefits and focus them on lower-income students | ✓ Fully fund the program and retarget Supplemental Education Opportunity Grant money to colleges that best support needy students. | ✓ Offer a single, unsubsidized federal loan | ✓ Distribute work-study dollars based on which colleges do the best job of connecting school to work; end SEOG, use savings to provide extra Pell dollars to colleges that maintain a base percentage of Pell recipients and improve their graduation rates |
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