WASHINGTON — Getting financial aid at American colleges is too complicated and should be simplified immediately to make it easier for low-income students to apply for the funds while also consolidating the confusing number of programs, the chairman of Senate Health, Education, Labor, and Pensions Committee said during a hearing Thursday.  Families going through the college application process often have difficulty distinguishing between grants and loans when they receive their aid packages, said Chairman Sen. Lamar Alexander,  R-Tenn. Alexander said regulations should be simpler and more effective in helping students better understand their aid options.  Senators from both parties recognized the need to create a plan that reduces red tape and ensures students feel their degrees are worth their time and money. 

Pell grants in 2017

New federal loans in 2017

The committee is considering how best to renew the Higher Education Act, which has been in place since 1965 and was scheduled to expire in 2016, but has had one-year extensions while senators try to reach an agreement.  

There are currently two grant programs, five loan programs and nine repayment plans available to families seeking financial assistance for college students. Alexander and Sen. Michael Bennet, D-Colo.,  want to simplify federal aid into a “one grant, one loan” program. 

  • Proposed federal grant programs will drop to 1
  • Proposed federal loan programs will drop to 3
  • Proposed federal repayment plans will drop to 2

The committee also has proposed cutting the number of questions on the Free Application for Federal Student Aid form from 108 to no more than 25, using information the government already has.  

Advising groups meant to match students to their best loan options often opt for the ones with the least paperwork, said a professor of public policy at the University of Michigan.  

Though most senators agreed on the need to simplify the federal aid system Sen. Elizabeth Warren,  D-Mass., asked for better navigation of the existing plans, which may better fit low-income students’ needs.

“What I think is most important here is that we not use simplification as a ploy to leave students with more debt,” Warren said. “The way to simplify the student aid system is to make it cheaper for students, to make it easier to find a high-quality school and to make the path out of debts smoother.”

Alexander said he hopes to bring a comprehensive bill ready for a Senate vote by early spring.