S.

6: Establishing Affordable and Sustainable Higher Education

through Federal Student Loan Reform Act
Senator Nakamaru
Short Title: This Act may be cited as the Federal Student Loan Reform Act

Section 1. Findings and Purposes

The economic growth of the United States heavily relies on its intellectual capital, and college
affordability is the key factor to promote higher education. However, college affordability today
is at its crisis. In 2015, student loans have reached a critical mass of roughly 1.3 trillion U.S.
dollars,1 and it is estimated that the costs of higher education has increased by 137% since 2000.2
Education costs today are the higher than ever before. The demand for higher education has
increased, while the price of colleges and universities has become less affordable.
A solution to stop this extraordinary increase in higher education costs and student loans
is necessary, and the higher education system has to become more sustainable. Students should
be given an equal opportunity for higher education and provided with sufficient information and
aid. Colleges and universities should be encouraged to regulate the costs within a reasonable
level. In the purpose of establishing and promoting affordable and sustainable higher education,
this act aims to establish Federal Center on College Affordability (FCCA) in the U.S.
Department of Education by expanding Federal Student Aid (FSA) in order to achieve the
following:
(a) Assessing affordability of colleges and universities in the United States, and providing
information for people who need support for higher education,
(b) Making non-binding recommendations to colleges and universities on college affordability to
provide useful information and possible solutions to improve affordability,
(c) Giving concrete advice on financial and academic plans on higher education to students who
need Federal student loans, and
(d) Taking the assessment of college affordability into account when offering Federal student
loans.

Section 2. Definition
(a) Schools refer to higher education, like colleges and universities.
1 Federal Reserve Bank of St. Louis, Student Loans Owned and Securitized, Outstanding,
https://research.stlouisfed.org/fred2/series/SLOAS.
2 Federal Reserve Bank of St. Louis, Personal consumption expenditures: Services: Higher
education, https://research.stlouisfed.org/fred2/series/DHEDRC1A027NBEA.
1

(b) Federal student loan providers may include Federal Perkins Loan, Federal Family
Education Loan (FFEL) and Federal Direct Student Loan (FDSL).

Section 3. Structure of Federal Center on College Affordability (FCCA)

Federal Center on College Affordability (FCCA) shall be established in the U.S. Department of
Education by expanding Federal Student Aid (FSA) and consists of the two main bodies that
follow:
(a) Information Center
The Information Center expands College Affordability and Transparency Center in the U.S.
Department of Education. The Information Center aims to collect data on schools, make
sophisticated assessments of college affordability and provide its data and assessments for the
public, schools, the Advisory Center and the Federal student loan providers. For that purpose, the
Information Center shall complete the following tasks:
(i)

Making assessments on affordability of colleges and universities in the United States

by collecting and analyzing data,

(ii)

Releasing its assessments on college affordability and making them publicly

accessible,

(iii)

Issuing annual reports on the activities and assessments that it conducts, including
the assessment-making process, to maintain its transparency and accountability,

(iv)

Making non-binding recommendations to schools to improve affordability, and

(v)

Sharing its information and assessments with the Advisory Center, and assessing the
activities of the Advisory Center and the Federal student loan providers.

(b) Advisory Center

The Advisory Center expands FSA, including its regional staffs. The Advisory aims to give
concrete advice to those who need support for higher education based on the assessments that the
Information Center makes and bridge between Federal student loan applicants and providers. For
that purpose, the Advisory Center shall complete the following tasks:
(i)

Making financial models for higher education to support people in different financial
situations and with different needs,

(ii)

Providing concrete financial advice on higher education for those who need support,
and

(iii)

Advising the Federal student loan providers on loan plans and loan-receiver
assessments based on the Information Centers assessments.

Section 4. Assessment of College Affordability

Considering the importance of a fair and universal assessment, assessment of college
affordability shall be made by the Information Center based on valid measures. The assessment
may be based on costs, financial support and services of schools.
(a) Costs may include the total costs of tuition, living fees and other expenses and be measured
by the following items:
(i)

Fees for academic purposes like tuitions and books.

(ii)

Living expenses are fees for living necessities, including housing, food, etc.

(iii)

Other expenses are fees that are necessary and spent for other purposes than tuition
and living expenses.

(iv)

Increase or decrease of the costs of a school affecting the affordability.

(b) Financial support is college or university based financial support plans, including financial
aid, scholarship and loans, and may be measured by scale, variety, and accessibility.
(i)

Scale refers to the amount of financial support that a school provides for its students.

(ii)

Variety refers to the different kinds of financial support that a school provides to its
students.

(iii)

Accessibility refers to the number of students that qualify for financial support from
the school

(c) Services are both academic and non-academic services that schools provide for students in
return for the costs, and may be measured by the quality of academic programs and of nonacademic services.

(i)

Academic programs are measured by the quality of academic activities and support,
such as classes and tutoring system, that a school provides in return for the costs

(ii)

Non-academic services like clubs and events are measured by the quality of nonacademic activities that a school provides in return for the costs.

(d) The Information Center maintains up to date scores of a school. The Information Center
bases the score on the three measures of costs, financial support or services. Such scores
change based on the actions or activities that colleges and universities take to improve
affordability, and future plans of their costs, and financial support and services.
(e) The Information Center makes the assessment publicly accessible through its website. The
details of the assessment-making process, and the scores and the ranking of college
affordability shall be included in its annual report that is issued at the end of each school
year.
(f) For the purpose of the assessment, the Information Center has the authority to determine the
measurements of the assessment, but it is also obliged to make the assessment-making
process transparent and report to the public.

Section 5. Recommendations
Based on the assessments of college affordability, the Information Center makes
recommendations to colleges and universities that are ranked low in terms of measurement.
(a) Any recommendation made by FCCA is non-binding, and colleges and universities bear no
legal obligation to follow the recommendations that they receive.
(b) Recommendations have to be advisory and shall only include details of the assessment for
the college or university to which recommendations are made and possible solutions to
improve the score and affordability.
(c) Recommendations shall be sent to the colleges and universities that are ranked within the
lowest one to ten percent of the schools that are assessed. The Information Center has the
authority to determine which colleges and universities that it makes recommendations to, but
the decision has to be based solely on the latest assessments, scores and ranking.
(d) The Information Center has to reflect on the feedback from the Advisory Center when
making recommendations.

Section 6. Providing Information and Advices

The Advisory Center provides advice on college affordability based on the assessment that the
Information Center provides.
(a) The Advisory Center makes financial models for people in different financial situations that
include a list of colleges and universities that best suit them, and recommended financial
support.
(b) The Advisory Center provides local advisory services on college financial support and works
closely with those who need financial support for higher education, and provides advice that
best suits each persons needs.
(c) The Advisory Center receives applications for Federal student loans and provides
information and advice for applicants before submitting applications to the Federal student
loan providers.
(d) The Advisory Center is obliged to announce its activities and criteria on the advisory services
that it provides to maintain its transparency and accountability.
(e) The Advisory Center shall consider a wide variety for choices on financial support beyond
Federal student loans.

Section 7. Cooperation with the Federal Student Loan Providers

FCCA shall cooperate with the Federal student loan providers in providing advice on college
affordability and reflecting the assessment of Federal student loans in the following manners.
(a) The Advisory Center receives data on loan plans from the Federal student loan providers and
considers the data in providing the advice.
(b) The Information Center provides the data and its assessments on college affordability to the
Federal student loan providers through the Advisory Center.
(c) The Advisory Center functions as an advisory body of the Federal student loan system, and
gives advice and recommendations to people who need Federal student loan based on the
assessment that the Information Center provides.
(d) The Information Center assesses Federal student loans as well as the activities of the
Advisory Center.