Federal financial aid programs should be quicker to punish colleges with high loan default rates and more vigilant in ensuring that all students are making satisfactory academic progress, a white paper released Wednesday by the Association of Public and Land-grant Universities argued. The white paper, "Federal Student Aid: Access and Completion," is the latest in a series funded by the Bill and Melinda Gates Foundation, called for using both loan default rates and repayment rates to judge colleges' eligibility to participate in financial aid programs. The association argued that standards should be tightened, saying colleges can game the current system by forcing students into forbearance and deferment.
The group also called for rewarding colleges with high completion rates for at-risk students with additional financial aid, cracking down on fraud and improving advising. The paper is somewhat an outlier among the Gates-funded efforts in proposing provisions that appear aimed at for-profit colleges, including the loan default provisions and a recommendation that the government count veteran's benefits as federal aid under the 90/10 rule, which governs how much of a college's revenue can come from the federal government.