Student Aid Association Releases Ideas for Loan Reforms

WIH

The National Association of Student Financial Aid Administrators (NASFAA) released a report this week on improvements needed in the administration of student loan programs. The release of this report comes at an apt time, given the current pause in student loan repayments due to the pandemic and the Administration’s plans to potentially forgive billions in student loan debt. “As the president and Congress debate and consider widespread debt forgiveness, we call attention to the noticeable absence and urgently needed policy reforms that will prevent borrowers from being in this same exact position in the future,” said NASFAA President and CEO Justin Draeger. “That’s why NASFAA convened subject matter experts across the higher education system to develop policy recommendations that address systemic shortcomings in our federal student loan system.”

The report recommendations include:

Strengthen and simplify income-driven repayment programs so they protect borrowers and allow them to repay in accessible, realistic, and manageable ways.
Reexamine the federal student loan system as a direct-to-borrower federal loan program, as opposed to a vestige of bank-based lending.
Develop policies that both help and incentivize borrowers to meet their obligations and target resources toward borrowers who need assistance.
Create policies that assist struggling borrowers, rather than punish and hinder those who are already behind.
Ensure policies are progressive — not regressive — for low-income students.

For more information about the report and NASFAA’s recent activities on student loan debt forgiveness, please see the association’s press release.