Mr. John Klacik, President National Association of State Student Grant and Aid Programs (NASSGAP)
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My name is John Klacik. I am the President of the National Association of State Student Grant and Aid Programs (NASSGAP). We are the organization of agencies in each of the states and territories that administer state appropriated student financial aid.
On behalf of NASSGAP I wish to present the organizations proposals for Reauthorization of the Higher Education Act. We have eight specific areas of recommendations. Our major theme in developing these recommendations is the need to strengthen the somewhat shaky partnership that currently exists between the federal government and the states for the provision of student financial aid.
Neither the states nor the federal government can be successful in providing access to students, without the participation of the other. States appreciate the base of funding and support offered through the Federal Pell Grant and loan programs. The federal government, on the other hand, would be unsuccessful without the more than $5 billion appropriated annually by states for student aid. Together we will be less than successful if we fail to consult each other on issues such as improving retention, improving the efficiency of the delivery system, and modernizing policies and procedures to respond to a changing educational world.
One of NASSGAP's primary federal relations goals is the continuation and improvement of the federal LEAP program. This is our first recommendation for Reauthorization.
LEAP, which is the successor to the old SSIG program, is the only partnership between the federal state governments for the provision of financial aid to students. It has multiple benefits to both partners and works to the ultimate benefit of students.
First, LEAP leverages state funding. For federal appropriations under $30 million, it requires a dollar-for-dollar state match. For appropriations above $30 million, it requires a 2-1 state match. Nationwide the US Department of Education estimates that about 171,000 students received state awards as a result of LEAP.
Second, LEAP provides welcomed flexibility to states to allow the funds to be directed toward those students that each state has identified as its population in need. Third, 100 percent of all federal appropriations and state match goes to students. There is no administrative expense allowance in LEAP and NASSGAP is not asking for one. And forth, the maintenance-of-effort requirements in the program give states a reason to preserve their own appropriation levels. This is particularly important in the tough economic time that states face now.
The only downside to LEAP is that it is under-funded. LEAP is the smallest of the student aid programs currently funded at slightly less than $67 million. That appropriation level hardly even qualifies as rounding error in the Pell Grant program. NASSGAP recommends that the program be reauthorized; that its funding authorization be increased to $200 million; that the maximum annual student award be increased to $12,500; and for the sake of clarity at the schools, that LEAP be excluded from the formula for the return of Title IV funds.
Regarding other programs, and in terms of other partnerships, NASSGAP recognizes the great value of the GEAR-UP program. NASSGAP member states were integrally involved in the creation of GEAR-UP's predecessor program, which was called NEISP. Funding for GEAR-UP needs to be increased to allow all states to participate in this very valuable early awareness project. NASSGAP endorses an authorized funding level of $500 million.
NASSGAP requests that the Act be amended to name state student grant agencies to the list of groups involved in negotiated rulemaking. In this regard NASSGAP wishes to remind the Department and Congress that states have built their programs around a framework of federal rules and processes. There is virtually no Title IV policy or procedural change that will not have an impact on state programs, regardless of whether we are talking about grant, work, or loan policies.
A clear example of states building upon federal processes to streamline the delivery system is the universal use of the FAFSA as a primary application document. States are very interested in the questions asked on, and the availability of data from, the FAFSA. NASSGAP recommends that the Act retain the language ensuring that the application will provide for the same number of state questions as it does in the current higher education act. States also ask that the Secretary be directed to provide free electronic state specific FAFSA-On-the-Web supplemental questions. And finally, that the Secretary permits states free use of the federal PIN for FAFSA filers who are also applying for state aid.
Not the least of our concerns is the Pell grant program. NASSGAP advocates increasing the authorized Pell Grant and making it an entitlement. NASSGAP believes that the cost of the Pell Grant can be offset through an automatic and mandated verification match with the IRS. The savings alone in misdirected Pell grant funds will pay for much needed Pell grant improvements. NASSGAP proposes that this verification match be started as a demonstration project in the 2004-05 year with full implementation for all filers in the 2005-06 year.
NASSGAP also endorses the proposal of the College Savings Plan Network regarding the Federal Needs Analysis treatment of "529" state based savings and prepaid tuition plans. The proposal specifically seeks to end the very unfair and inconsistent treatment of distributions from prepaid tuition plans that have the effect of directly reducing student aid eligibility on a dollar-for-dollar basis.
And finally, while our recommendations are all born from the spirit of partnership I admit that one is also born from the frustration of a past failure in that partnership. We recommend that the Higher Education Act specifically state that the Department can take over collection efforts in the Paul Douglas Teacher Scholarship program. This is a conditional scholarship program designed to attract the best and brightest students to the teaching profession by offering students generous scholarships conditioned on their future service as teachers. Students were encouraged to remain in the profession by requiring that they serve a two-year teaching commitment for every year of scholarship received. It is administered by states. But Congress abruptly stopped funding the program in 1995 leaving a substantial number of students in the lurch without funds to continue their educations and unfortunately sending an unintended message that their services as teachers was not valued. States were left to deal with the mess. States continue to track students and provide forgiveness of the loans to those who are teaching and for collecting from those students who subsequently switched to other careers. This is a considerable task for which states are not compensated in any way. The Department has a substantial centralized collections operation that is in a good position to take over the remaining job of monitoring, billing, collecting, and forgiving. It is NASSGAP's recommendation that the Department assume this task.
I want to leave you with three thoughts. The first is that partnerships are necessary and that NASSGAP and the states stand prepared to be partners. We just are looking for a positive signs that the Department supports and recognizes the efforts of states. Second, that all policies and procedures suggested as changes to Title IV of the act will have a direct impact on states. The states and NASSGAP ask that you consult with us on the proposals and certainly in the implementation of changes. And last, that while this reauthorization is being discussed under the specter of the toughest economic circumstances we've faced in 20 years, it is exactly for times like these that student aid programs were created and for which partnerships are needed. Now is not the time to cut back.
Once Again, thank you for this opportunity to present NASSGAP's reauthorization proposals.