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
• 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.
About Lumina Foundation: Strategic Priorities
Mobilizing to Reach Goal 2025
1. Building a Social Movement
2. Mobilizing Employers, Metro Areas, and Regions to
Increase Attainment
3. Mobilizing Higher Education to Increase Student
Success
4. Advance State Policy for Increased Attainment
5. Advance Federal Policy for Increased Attainment
Designing a 21st Century Higher Education System
6. New Models of Student Financial Support
7. New Higher Education Business and Finance Models
8. New Systems of Quality Credentials
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
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)
So What?
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Design Principles
1.
Make college more affordable for low-income students
2.
Make the cost of college more predictable and transparent
3.
Provide incentives to students and institutions to increase
completion and lower princes
4.
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.
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Design Principles
1. 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.
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Design Principles
2. 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
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Design Principles
3. 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.
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Design Principles
4. 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.
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?
Also Interested In:
• Information Barriers
• Simplification
• Effective Institutional Aid Practices
(Completion Management)
• Specific Federal Policy Recommendations
• Ideas for pilots
Policymaker Interest
• Cost/Quality/Completion
• Regulatory Burden
• Competency Based Education
• Solving Budget Gaps (hopefully with the
least harm to students)
Moving Forward: What To Expect
• Additional Concept Papers
• Reauthorization “Blueprints”
• Hearings on Reauthorization-related
areas
Contact Information
Zakiya Smith
Strategy Director
Lumina Foundation
zsmith@luminafoundation.org