financial literacy

States: Our financial aid needs major overhaul

A new report notes that a handful of emerging paths may lead to greater financial aid impact

Although state financial aid programs can be powerful policy tools to defray the increasingly burdensome costs of college, many states’ financial aid programs are not in alignment with strategic postsecondary education policy goals, according to a new report from the Education Commission of the States (ECS).

The report, State Financial Aid: Applying redesign principles through state engagement, examines a variety of state-level projects intended to redesign state financial aid and shares lessons learned from those efforts.

During the past two years, ECS supported states as they developed more strategic approaches to financial aid policy design, notes author Sarah Pingel, Ed.D., a policy analyst in the Postsecondary and Workforce Development Institute at ECS. In 2014, states allocated $11.7 billion to financial aid programs that supported 4.5 million students. States that want to redesign their financial aid programs can apply for state technical assistance through the State Financial Aid Redesign Project.

State financial aid policy experts met to envision new financial aid programs that truly meet state and student needs. As the group proposed changes to current state financial aid policies, four redesign principles and lessons around those principles emerged.

(Next page: The four leading state financial aid principles)

Laura Ascione