Report on Federal Aid and Affordability

May 26, 2016

A new report from the Center for American Progress looks at how federal health care and housing benefits address affordability and how those programs could help inform a rethinking of federal financial aid in higher education.

"The result of an expectation-light approach to college affordability is that the ability of federal postsecondary benefits to achieve their desired aims is completely dependent upon the choices made by schools, governors and legislatures across the country," the report said. It adds that "changing federal financial aid benefits to guarantee recipients can purchase a specific set of goods, not just receive a set amount of money, will better conform these programs to the rest of the U.S. social safety net."

Key points from the comparison, the center said, are:

  • Areas such as health care set distinct affordability policies for the most vulnerable individuals that result in minimal to no expectations for out-of-pocket spending.
  • The federal government limits which products within a market it will make affordable, refusing to subsidize the priciest options.
  • Related to this sense of limits, the federal government also creates affordability standards -- specifically, when it deals with debt in areas related to housing -- to protect consumers from unaffordable payments.
  • The federal government does not always pursue affordability on its own. For crucial items such as health insurance, it enlists the help of states and employers to achieve its aims.
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