A white paper from the Committee for Economic Development, another entry in an effort by the Bill & Melinda Gates Foundation to redesign federal financial aid to focus on completion, calls for a radical change to student aid: turning the Pell Grant and other need-based aid into block grants for states. The paper, "A New Partnership: The Road to Reshaping Federal & State Financial Aid," calls for requiring states to match 20 percent of federal funds with need-based aid of their own. States would also be required to hold down tuition at public institutions in order to be eligible for federal aid. Grants would be portable across state lines.
The report, one of many released this month from organizations that received Gates grants, proposes the biggest changes so far of any Gates recipient. It also calls for eliminating tax credits for higher education and automatically enrolling student loan recipients in income-based repayment, both ideas that other groups have also proposed.