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Study: U.S. financial aid fails students who need it most

The $86 billion system is so complex and piecemeal that experts call for an overhaul.

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The United States government spends upward of $86 billion a year on grants, loans, work aid, and tax benefits for college students. But the patchwork system is a barrier to many who are academically qualified for college, say a group of policy experts and higher-education professionals who laid out their recommendations in a report Sept. 18.

The "piecemeal, rickety financial aid system" needs an overhaul, according to by the Rethinking Student Aid study group. The College Board, a nonprofit association in New York, convened the group two years ago.

"There's a growing recognition that the federal student aid system is simply too complicated," says Sandy Baum, the report's co-author and an economics professor at Skidmore College in Saratoga Springs, N.Y. "We're seeing proposals in Congress; we're seeing the Department of Education talk about simplification…. People are really ready to do something more dramatic to the system."

The goal is to increase access to college and persistence through graduation, particularly among students from low- and moderate-income backgrounds. A variety of business and education groups have been sounding the alarm in recent years, concerned that if the US fails to generate more college graduates, it's at risk of falling behind economically as other nations step up their education levels.

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