(2016). Starting from Scratch: A New Federal and State Partnership in HigherEducation. New America.

Higher education in America has become costly over the years. Many vulnerable families
have found it difficult, almost impossible to pay for college. Catering for tuition fees has become
a perilous hindrance to achieving economic stability. Although past generations of students used
education as a pathway opportunity to forge ahead in life, today’s generation of students has
found it rough. High profile plans have been promoted in recent months. The plans seek to
restore free college or atheist debt-free college. Proposals have come from many spheres,
including leading presidential candidates (McCarthy et al., 2016). However, not much has
changed. All the proposals have built on a foundation of a financial and regulatory agreement
arrived on between the institutions of higher learning and the two forms of government more
than four decades ago. However, the foundation is more than forty years old and has been broken
by unaccountable lawmakers, misaligned incentives, and changes in the industry. Any reforms
that seek to uphold the existing system are aimed at only perpetuating the cycle of indebtedness.
The authors explore the reforms aimed at ending financial disinvestment that has been hollowing
higher learning systems in the country.
The reforms entail holding colleges accountable, whether they are public, for-profit, or
private, for admitting students from low-income backgrounds and providing quality education at
reasonable rates. They also propose a system where not all students in the country will pay their
expected contribution for college (EFC). Such a move will help reduce the spread of
indebtedness, especially among students from low-income families. The authors explain the

nature and origin of the existing financial system. The aid system provided by the federal
government was established in the early 1970s (McCarthy et al., 2016). It was designed in a
completely different era when a private college was largely inexpensive. Loans taken by students
were maintained at low levels, and resident students had access to low-cost higher-education in
public colleges and universities. In 1972, the Pell Grant was established (McCarthy et al., 2016).
It is a program that has since helped millions of students from low-income families access higher
education.
The Pell Grant is the bedrock for the current student financial aid system. It was intended to
increase access to higher education among the disadvantaged students and consequently create a
diverse and learned workforce. The money was given directly to a student, unlike in the past,
where it would flow to institution accounts. The system has, over the years, broken down.
Colleges and universities began increasing their prices in the early 1980s (McCarthy et al.,
2016). Even though the prices continued increasing, the Pell Grant has, over the years, been
unable to keep up. Further, some states that do not support hikes in taxes and are grappling with
rising health care costs have continued to cut down on higher education funding. Also, colleges
that are interested in raising more revenue and prestige spend more of their institutional aid to
fund wealthy students, as this is one of the ways through which they are able to raise their
rankings. Low-income students are left to take loans to finance their education. Those who
cannot take more loans end up dropping out and consequently default on repaying their loans.
The authors then explore a plan where all student financial needs are met. In this case,
students will not have to take federal loans, tax credits, or even Pell Grants. Rather than having
students struggle to finance their education, the plan recommends a formula where colleges are
funded by the states, and they then enroll low-income students, and all students are then served

well (McCarthy et al., 2016). states will be encouraged to invest more in higher education for
them to be eligible for formula funds. The colleges will charge only what students can afford,
and thus college price will be limited only to student’s EFC. Unmet needs for needy students will
be eliminated, and students will access education regardless of the program they choose.
The article further explores some of the changes that will be effected upon the
implementation of the formula fund plan. For instance, the allocation of federal funding to
institutions of higher learning will change o a formula-funded grant program, which will be
different from the voucher program. Living expenses such as tuition, child care costs,
transportation, and room and board will be met. Colleges will be expected to have positive
student outcomes. Measures will be put in place to ensure that colleges are accountable
(McCarthy et al., 2016). Further, federal and state partnerships will be strengthened, and more
states will be committed encouraged to make huge investments in colleges and universities.
Further, the plan will see the student aids programs provided for under Title IV eliminated.
Such programs include student loans and Pell Grants. In their place, the federal government,
through the Department of Education, will give states the federal formula funds (McCarthy et al.,
2016). The funds given will account for low-income students enrolled in different institutions,
and it will be large and effective enough to attract more students to attend colleges and
universities. States will distribute funds provided to them alongside their contributions to specific
participating institutions. The cost of eliminating unmet needs among low-income students will
be met by colleges, states as well as the federal government. On the other hand, states will only
be eligible if they remain committed to increasing their funding. Further, institutions of higher
learning that seek to take part in the formula fund program must admit a considerable number of
low-income students.

The plan and argument presented by the authors can be a huge relief to the struggles of
receiving college education currently experienced in America today. The plan is estimated to
cost the federal government approximately $38.6 million every year (McCarthy et al., 2016). The
amount does not include other costs currently incurred in sustaining other sectors of higher
education. Further, states will contribute $19.9 billion (McCarthy et al., 2016). Colleges do not
have a set amount to contribute but are required to ensure that students contribute their EFC.
However, some expensive colleges will give more from their reserves and other sources in an
attempt to meet cost requirements. Other institutions considered to be low quality will need to
invest more in improving their quality and student outcomes if they wish to remain eligible for
formula funds.
Overall, the plan can be an effective starting point for making informed decisions on how
higher education will be funded in America. It provides an entirely new system for funding post-
secondary education, which is what this country requires. Most needy students are deep in debt,
while others continue to drop out of school because education is becoming highly unaffordable.
However, the implementation of the new plan will see the country offer quality education at
affordable rates. Student debts will be eliminated, and college education made accessible for all.

References

McCarthy, M. A., Fishman, R., Palmer, I., Laitinen, A., Dancy, K., Burd, S., … & Holt, A.
(2016). Starting from Scratch: A New Federal and State Partnership in Higher
Education. New America.