Gillen, A. Smarter spending: Reforming federal financial aid for higher education.  Center for College Affordability and Productivity, Washington, DC, 2011. Pages: 22.

This latest policy paper of the Center for College Affordability and Productivity (CCAP) comes amidst the US congressional debate on a USD 1 trillion federal budget for 2012, including anticipated changes to the Pell Grant programme and subsidised undergraduate student loans. The report undertakes an ambitious effort to explore various ways to optimise the current architecture of financial aid for higher education in the United States. More specifically, the author provides insight into the background and rationale for some of the current approaches to US financial aid for higher education. In this context, it offers some specific recommendations that include 

• the continuation of the Pell Grant programme; 
• a replacement of the current student loan programmes; and 
• the creation of a new subsidy programme targeting support in those areas of higher education that create social benefits.

The author argues that, if implemented, these proposals could (over a ten-year period) result in a range of concrete achievements, such as keeping unchanged Pell grant spending, reallocating USD 276 billion from inefficient and ineffective tax expenditures to the new subsidy programme, and reducing the national budget deficit by USD 158 billion.

CCAP