College & Workforce Readiness

U.S. Dept. of Ed. Looks to Experiment with New Financial-Aid Models

By Caralee J. Adams — December 09, 2013 1 min read
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Give high school students Pell Grants to pay for college courses. Have students earn federal student aid based on how much they learn, rather than the amount of time they spend in class.

These are some of the ideas the U.S. Department of Education would like to see tested at colleges willing to be “experimental sites” for the delivery of federal student aid, according to a Federal Register notice published last week. A letter of invitation and a blog post by department officials outlined more details on how the program would work.

To conduct the experiments, U.S. Secretary of Education Arne Duncan will use his authority under the Higher Education Act to grant waivers from regulatory requirements to allow a limited number of postsecondary educational institutions to test alternative methods for administering federal-aid dollars.

Proposals to reform the financial-aid system have been plentiful.

This spring, a study group convened by the College Board issued a report recommending revisions to the Pell Grant program. The Alliance for Excellent Education called for a simplified student-aid system with a focus on rewarding completion in a report last December. A promise of a Pell Grant in 9th grade could help motivate students toward enrolling in college, suggested the National Association of Student Financial Aid Administrators earlier this year.

The department’s call for new ideas in this arena is part of its larger agenda to expand pathways to college and improve college affordability.

“Innovation offers the potential to dramatically reshape and improve postsecondary education in ways that increase value by raising quality and decreasing costs,” wrote U.S. Under Secretary of Education Martha Kanter and David Soo, senior policy adviser to the Office of the Under Secretary in a Dec. 4 blog. “This is a pivotal moment, and we want to do all that we can to encourage responsible innovations in higher education that build on promising practices and develop an evidence base so that the highest-impact practices can be identified, replicated, and eventually brought to scale.”

The department is asking the public, including the higher education community and others with an interest in a more educated workforce, to send ideas for experimental sites.

The deadline for submissions, which can be sent to, is Jan. 31.

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A version of this news article first appeared in the College Bound blog.