For instance, as a result of the expanding entitlement mentality, the Pell Grant program—the foundation of the federal investment in student financial aid—is on unsure financial footing. To keep up with the program’s massive increases, the government has been forced to take steps such as eliminating subsidized loans for graduate students. A Romney Administration will refocus Pell Grant dollars on the students that need them most and place the program on a responsible long-term path that avoids future funding cliffs and last-minute funding patches.
Students and their families must also be given the information they need to intelligently weigh the costs and benefits of the many options available to them. Better information about products and services helps consumers make more informed choices, and nowhere is this as important as when students consider a postsecondary education. Despite requirements that colleges and universities report volumes of data to the U.S. Department of Education, there is no simple way for students to access that data and interpret its implications.
A Romney Administration will eliminate unnecessary data collection requirements and partner with existing private-sector entities to create consumer-friendly data on the success of specific institutions of higher education. Students should make decisions with full understanding of data points such as completion and persistence, loan repayment rates, and future earnings. In turn, these ratings can be used by private lenders to evaluate the risks of lending to students at these institutions, creating incentives for schools to focus on factors related to student success.
Less regulation, more innovation
When the Obama Administration and the Democratic Congress nationalized the student loan market, they drove away private lenders and moved a trillion-dollar obligation to the federal balance sheet. A Romney Administration will embrace a private-sector role in providing information, financing, and education itself, working with effective businesses to support the goals of students and their families.
The hallmark of the U.S. economy is its constant ability to innovate, to develop and deliver new products and services, and to offer ever-increasing quality to consumers at an ever-lower cost. Our colleges and universities have been a significant part of the innovation driving our economic growth for the past century, helping to develop the basic research and related patents behind everything from communications technologies to medical treatments to energy sources.