Discussions of higher-education policy shouldn’t be reduced to whether the interest rate on certain federal student loans will double, as planned, on July 1. That was Andrew P. Kelly’s frustration last year, when the increase was ultimately postponed. Now, with a new deadline fast approaching, the same issue is making waves again, even though it will reportedly cost the average student-loan borrower only $2,600 over 10 years of repayment.
Broad concerns about college attainment and affordability, meanwhile, loom large. And so Mr. Kelly, a resident scholar at the American Enterprise Institute, is trying to jump-start a more-comprehensive discussion of financial-aid policy.
He and Sara Goldrick-Rab, an associate professor of educational-policy studies and sociology at the University of Wisconsin at Madison, are editing a book on innovative improvements to financial aid. On Monday they will hold a meeting here to solicit feedback on the research papers that will become the core of the book.
The editors worry about the lack of research and development available to guide financial-aid policy, a topic Mr. Kelly has written about for The Chronicle. That’s why they decided to ground the book in research. In fact, one paper lays out what a financial-aid research agenda would entail.
The other eight papers discuss possible innovations in college access, grant aid, and student loans. Because the editors want the book to be a resource for people not intimately familiar with aid policy, the papers are rooted in historical context. One, from a retired Education Department official, Dan Madzelan, recounts lessons on the politics of student aid from his three-decade career.
Taking a step back to evaluate the financial-aid system in its entirety is not a new idea. Back in 2008, a group convened by the College Board released a report proposing large-scale changes in the federal system. More recently, the Bill & Melinda Gates Foundation awarded grants to associations, advocacy groups, and other organizations to offer ideas for improving the system and linking it to completion.
College-Based Aid
This latest approach is different in part because it includes thinkers beyond the “usual suspects,” said Ms. Goldrick-Rab. The authors were drawn from academe, and the editors looked especially for junior faculty members with fresh ideas.
Some of the papers may be controversial, not least one Ms. Goldrick-Rab took a lead in writing. In that paper, she and two co-authors argue that federal financial aid should be used to support colleges that serve needy students well, not awarded to students in a voucher-style system, as it is today.
The current system is entrenched, Ms. Goldrick-Rab said in an interview. “Like everybody else,” she said, “I didn’t question it for the longest time.” But a college-based aid model, if set up well, would make higher education more affordable, the paper argues. It doesn’t hold all the answers to how such a system would work, said Ms. Goldrick-Rab, but she hopes it will spark discussion.
Some of the papers offer insights from existing aid and access programs, while others imagine the consequences of policy changes nationally. One paper, for instance, suggests using the student-loan system to nudge students into better college decisions. Today, some students borrow too much to go to a particular institution, while others, debt-averse, forgo good matches, said Stephen Crawford, a co-author of that paper.
“Isn’t it time to explore the potential of a market-based system to send more-refined signals?” said Mr. Crawford, a research professor at George Washington University’s Institute of Public Policy.
His paper proposes letting students borrow more, at lower rates, if they select colleges and programs from which they’d have a better chance of graduating and earning a solid income. That model, Mr. Crawford said, would shift more responsibility onto colleges, which would have to lower costs or improve offerings to attract students.
Like Ms. Goldrick-Rab’s paper, Mr. Crawford’s offers an unconventional idea that isn’t fully fleshed out. Monday’s meeting will be devoted to critiquing the ideas. In addition to the authors, advocates for students, representatives of higher-education associations, and staff members for federal and state officials were invited to attend.
Afterward, the authors will revise their papers, and the editors will draft an introduction and conclusion to the book, which is expected to come out next year.
The next reauthorization of the Higher Education Act—the main federal law governing student-aid policy—is also due in 2014, but Mr. Kelly and Ms. Goldrick-Rab are taking a longer view. Their goal is to “inform policy making for the next century,” Mr. Kelly said, “rather than the next 10 years.”