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Kline Statement: Hearing on "Keeping College Within Reach: Simplifying Federal Student Aid"
As prepared for delivery.

In preparation for the upcoming reauthorization of the Higher Education Act, the committee has held nearly a dozen hearings to explore the challenges and opportunities facing our nation’s colleges and universities.

We’ve discussed the value of transparency and data in helping prospective students choose the postsecondary institution that best meets their unique needs. We have examined factors that contribute to rising college costs and reviewed the consequences of burdensome federal regulations and paperwork requirements. And we’ve highlighted the critical importance of promoting innovation and academic freedom in our nation’s higher education system.

Without question, ensuring more students have access to an affordable, quality postsecondary education is a top priority for everyone in this room. But despite the best of intentions, federal efforts to expand aid programs over the past 50 years have resulted in an overly complex system that is difficult to navigate.

Today, with the help of our witnesses, we will explore opportunities to streamline the federal aid system, making it easier for students to evaluate federal aid options and make smart investments in postsecondary education.

I’d like to take a moment to share with you the process students and families must go through when trying to access federal aid. First, students must complete the Free Application for Federal Student Aid, or FAFSA, which includes more than a hundred detailed questions on a range of topics including earnings and savings, parental education attainment, receipt of government benefits, and assets.

After completing the lengthy FAFSA application, students must try to understand the available aid options while also deciphering the differences between loans and grants. To make an informed decision about financial aid, students and their families need to grasp what makes each program unique, including the terms and conditions, eligibility requirements, and aid amounts awarded by individual institutions.

And finally, when a student chooses an aid package, he or she must also begin thinking about how to eventually repay the loans. As we saw with the recent student loan interest rate debate, far too many students don’t fully understand their loan obligations until after they graduate. And students often miss opportunities to take advantage of federal repayment initiatives simply because they don’t know such programs exist.

During the 2008 reauthorization of the Higher Education Act, Congress took an important first step toward improving the federal aid system by simplifying the FAFSA – but the still-cumbersome application proves there’s more work to be done. Fortunately, the higher education, business, and policy communities, in coordination with the Bill and Melinda Gates Foundation’s Reimagining Aid Design and Delivery initiative, have put forth a number of interesting ideas to restructure the system.

One proposal suggests further streamlining the FAFSA by dramatically simplifying the need analysis formula used to determine student eligibility. Instead of calculating a student’s expected family contribution through detailed questions, a modernized formula would only use a family’s size and adjusted gross income to determine eligibility. Additionally, the new formula would build on past efforts to rein in the FAFSA through partnerships with the IRS, allowing applicants to retrieve financial information more easily.

To reduce confusion and complexity in the federal aid system, another proposal calls for the consolidation of all existing federal postsecondary aid programs into a ‘one loan and one grant’ structure. In this scenario, students would have access to a single loan with a market-based interest rate and one universal repayment plan. Other proposals focus on helping students access more transparent information about their federal aid options, which has been a longstanding Republican priority.
Before I yield to the distinguished ranking member, George Miller, I’d like to note that I am proud of the work we did earlier this year to revamp federal student loans. Though it was a difficult battle, eventually we came together on a bipartisan solution that has resulted in lower interest rates for millions of loan borrowers. We now have the opportunity to build on this success and find the common ground necessary to the reauthorize the Higher Education Act. I look forward to working with my colleagues on both sides of the aisle to strengthen the law and ensure more students can realize the dream of a college degree.


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