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Developing New Models of Student Financial Support

7 May 2013. Developing New Models of Student Financial Support. COSUAA Conference May 7, 2013. Presented by. Zakiya Smith. Strategy Director , Lumina Foundation. About Lumina Foundation.

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Developing New Models of Student Financial Support

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  1. 7 May 2013 Developing New Models of Student Financial Support COSUAA Conference May 7, 2013 Presented by Zakiya Smith Strategy Director, Lumina Foundation

  2. About Lumina Foundation • The nation’s largest private foundation focused exclusively on getting more Americans into and through higher education. • Goal: To increase the proportion of Americans with high-quality degrees, certificates, and other credentials to 60% by the year 2025.

  3. About Lumina Foundation: Strategic Priorities • Mobilizing to Reach Goal 2025 • Building a Social Movement • Mobilizing Employers, Metro Areas, and Regions to Increase Attainment • Mobilizing Higher Education to Increase Student Success • Advance State Policy for Increased Attainment • Advance Federal Policy for Increased Attainment • Designing a 21st Century Higher Education System • New Models of Student Financial Support • New Higher Education Business and Finance Models • New Systems of Quality Credentials

  4. Why Develop New Models? • Attainment imperative • Challenges with efficacy of current models even for their original purposes • Changing nature of the student body • National concern about cost (this time is different) • Focus on learning

  5. Identifying the Problem/Barriers • Price Increases • Uncertainty/Information gap • Complexity Causing Confusion • Debt without Degree/Debt Unconnected to Value of Degree

  6. Identifying the Problem/Barriers • Not enough flexibility • Difficulty determining need • Equity/Fairness generally

  7. Public Perception/Institutional Leadership • Gallup Survey: “Do you think higher education is affordable for everyone who needs it?” • General Public: 74% say “no”. • College presidents: 50% say “yes”. • (And 25% ‘strongly agree’ that it IS affordable)

  8. So What?

  9. Design Principles • Make college more affordable for low-income students • Make the cost of college more predictable and transparent • Provide incentives to students and institutions to increase completion and lower princes • Align federal, state, and institutional policies and programs Generally, all changes should be based on evidence about what works; and policy should seek to build evidence in cases where none exists.

  10. Design Principles • Make college more affordable for low-income students • Family income should not be a barrier to enrolling in or completing college. Subsidies should be prioritized on needy (low-income) students. • Responsible student loan debt should not be a deterrent to enrollment or completion—student loans should be easy to repay, and default should not be common. • Aid should be flexible enough to meet unique needs that may come up throughout a student’s term.

  11. Design Principles • Make the cost of college more predictable and transparent • Students and families should be provided with clear information on which to make decisions about enrolling in college. • Information should be structured in such a way that students are encouraged to choose a college where they are likely to complete a timely manner, with a high quality credential. • Students and families should be informed about financial aid early and often

  12. Design Principles • Provide incentives to students and institutions to increase completion and lower prices. • Incentives should build on the base subsidy provided by need-based aid, and be clearly communicated to students and institutions • Any financial aid incentives should be included in as many aid programs as are practicable, not only on those targeted to low-income students.

  13. Design Principles • Align federal, state, and institutional policies and programs • States and institutions should be encouraged to offer low tuition options for students so that price increases don’t dwarf available aid. • Federal investments should supplement, not supplant state and institutional investment. • States and institutions should be held accountable for completion.

  14. Initial Areas of Exploration • Affordability: What does it mean? How is it defined? Is it too complex to try to define? If so, how do we know if policy is successful? • State Policy: How can state financial support systems be improved to become more efficient? Would a federal/state partnership for aid be more effective at making college affordable? • Passive Repayment: What does a fair and effective income-contingent/income-based loan repayment program look like in the United States?

  15. Also Interested In: • Information Barriers • Simplification • Effective Institutional Aid Practices (Completion Management) • Specific Federal Policy Recommendations • Ideas for pilots

  16. Policymaker Interest • Cost/Quality/Completion • Regulatory Burden • Competency Based Education • Solving Budget Gaps (hopefully with the least harm to students)

  17. Moving Forward: What To Expect • Additional Concept Papers • Reauthorization “Blueprints” • Hearings on Reauthorization-related areas

  18. Contact Information • Zakiya Smith • Strategy Director • Lumina Foundation • zsmith@luminafoundation.org

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