The NASFAA task force provides recommendations for smarter borrowing:
- Institutions should be allowed to limit borrowing based on the institutional, degree, or program level, while retaining the authority to allow students to borrow up to the federal annual and aggregate limits on a case-by-case basis.
- The federal government should consider how subsidies could be better targeted, possibly by making income-based repayment the automatic repayment plan for all borrowers.
- In addition, the federal government should permit the interest rate on student loans to vary based on the year the student takes out the loan, but then be fixed at that rate for the life of the loan. Loan origination fees should be eliminated.
- Parent PLUS loan borrowers should be held to a more restrictive loan underwriting standard.
- Congress should mandate the creation of a single web portal where students can go to easily access information about federal, private, and institutional loans.
- The U.S. Department of Education should standardize the process for placing a student in the various repayment plans.
- Also, the DOE should transition its Financial Awareness Counseling Tool (FACT) into an entrance and exit counseling module that would satisfy legislative requirements.
- The regulatory burden of private lender lists should be reduced. This could happen by requiring adherence to a code of conduct, disclosure to families of the criteria used to develop a preferred lender list, and assurance that families may choose any lender not on the list.