The federal government provides billions through federal student aid programs every year—and should ensure that these programs are effective and efficient.
College and other postsecondary education—including vocational and graduate programs—play a vital role in supporting economic success for individuals and the nation as a whole. To help expand access to college education, in fiscal year 2020 the federal government provided over $115 billion in financial aid through grants, loans, and work-study funds.
However, the amount of federal student loan debt has grown to over $1.5 trillion, and many borrowers have struggled to repay their loans and eventually defaulted. To help address this issue, the Department of Education (Education) should take steps to strengthen its management and oversight of federal student aid programs.
- Education’s Office of Federal Student Aid should provide borrowers and the Public Service Loan Forgiveness loan servicer additional information to help determine which employers qualify for public service loan forgiveness.
- Education’s Federal Student Aid office issues and manages the Direct Loan Program, and contractors service these loans. Education should improve its methods of providing instructions and guidance to these contractors (such as by implementing a common servicing manual) to safeguard program integrity and improve service to borrowers.
- Education should sponsor and conduct research on the effectiveness of federal student aid programs and higher education tax expenditures at improving student outcomes.
Additionally, the COVID-19 pandemic has exacerbated college affordability and student loan repayment issues. To help students and borrowers overcome pandemic-related challenges, such as employment loss, it is critical for Education to effectively implement provisions in the CARES Act. These provisions offer grants to colleges to provide emergency funding to students affected by the pandemic and temporary relief from federal student loan payments.