Indiana University has been generating buzz in the higher-education world for its efforts to boost college access and affordability. Justin Draeger, president and CEO of the National Association of Student Financial Aid Administrators, visited IU Bloomington recently to find out what’s going on.
“This school has gotten some national attention for what it’s doing on getting students through school on time, on financial literacy, on keeping debt low,” he said in a conversation with news media and IU staff. “These are all things I’m excited to learn about.”
Draeger and Dan Mann, past national chair of the association and director of financial aid at the University of Illinois at Urbana-Champaign, toured campus last week. They met with IU students and with university officials in the enrollment management, financial aid and student financial literacy offices, and they sat in on a meeting of the Financial Aid Council, with aid directors from all IU campuses.
The visit came at the invitation of Edson Sample, who retired 27 years ago after a distinguished career as IU director of scholarships and financial aid. Draeger called Sample “one of the founding fathers” of the National Association of Student Financial Aid Administrators, which celebrated its 50th anniversary in 2016.
IU’s efforts around promoting student access and college affordability dovetail with the association’s priorities, Draeger said. Its 20,000 members represent 3,000 higher-education institutions, ranging from large research universities to community colleges.
“It’s a very broad membership, and their primary goal is to help students and families find ways to pay for college,” Draeger said.
IU officials reported in the fall that student borrowing had decreased by over $100 million in four years since the university implemented a multi-faceted financial literacy program and began adopting policies to increase financial aid and promote on-time graduation.
The effort include the popular MoneySmarts program, which provides presentations, peer advising and courses on personal financial literacy; a “Finish in Four” initiative that supports on-time graduate; and a widely copied student debt letter that keeps students informed about how much they’ve borrowed and will have to repay.
“Proactively letting students know about their loans so they take on less debt – that’s something a lot of people have talked about,” Draeger said. “If you can provide targeted information at the time students are taking out loans, it seems to have an impact.”
Indiana legislators seized on IU’s innovation and approved a law requiring Indiana colleges and universities that receive state funding to send annual debt letters to their students. U.S. Rep. Luke Messer, R-Ind., introduced legislation this year to make it a federal requirement.
Draeger’s association doesn’t oppose Messer’s bill, but he is skeptical of federal mandates. He pointed to the exit counseling required of students who receive federal college loans. Counseling is typically done online, and a survey found 40 percent of student borrowers didn’t remember receiving it.
One thing the federal government should do, he said, is to boost funding for need-based higher education grants such as Pell Grants. A generation ago, he said, grants were often sufficient to ensure access to higher education for low-income students, while students could borrow to attend more expensive schools. Now loans have become essential to access, with half of all students borrowing.
He would also like the government to make it simpler for student loan borrowers to enroll in income-based repayment plans. Total U.S. student loan debt has topped $1.4 trillion, producing media attention for students who owe $100,000. But the real problem, he said, is for students who drop out of college, can’t find a good job and struggle to make even modest loan payments.
Draeger said increased flexibility in implementing student loans and other federal programs and accountability requirements would help colleges and universities better serve their students.
“The major strength, when you talk about American higher education, is its diversity,” he said. “What works for one may not work for all.”
