When Congress reauthorized the Higher Education Opportunity Act in 2008, a provision in the bill required the Government Accountability Office to study "the feasibility of developing a national student loan clearinghouse on the (Education) Department's website that helps prospective borrowers make informed decisions." The GAO interviewed a variety of stakeholders and evaluated existing websites, but it ultimately opposed the development of a new web-based tool to help students compare loan offerings. While we think the GAO's concerns are reasonable, we also see at least one reason that the idea shouldn't be written off quite yet.
The report highlights several challenges that would impact a new addition to the Department of Education's website. Because the student loan overhaul effectively gives students only one option to secure a loan from the federal government, the new website would primarily be detailing information about private lenders. As a result, the Department would have to invest significant resources to ensure information was accurate and comprehensive. It may also be difficult to present such information in an unbiased manner, the report said. The GAO also noted that such a website would likely duplicate resources available from other websites and schools' financial aid offices.
We think these points are reasonable, and if the idea ever gains traction again, these issues would need to be resolved. However, we think it's worth pointing out that the legislation that passed in tandem with the student loan overhaul — the health care reform act — will be quite relevant to the broader issue of online resources.
Prompted by the new law, the Department of Health and Human Services over the summer launched healthcare.gov, a site that allows individuals to research health insurance options. Consumers can search a complete database of insurance providers available in their region, according to an August PBS story. The site also allows visitors to compare prices and coverage.
We imagine the health insurance site dealt with challenges similar to the ones the GAO highlighted in its report on a possible student loan website. Of course, the site isn't perfect — the "Find Insurance Options" page promises, "This tool will grow over time." But it is clearly providing and will continue to provide a valuable resource for individuals and families.
The health care law requires states to create health insurance exchanges by 2014, and most if not all states will probably end up putting information online. The states are, after all, the "laboratories of democracy," and their experiences in creating web-based tools for health insurance shoppers will be helpful if the government wants to develop similar resources for other areas — like student loans.
For now, we accept the GAO's judgment, and the Department of Education also said it agrees with the findings. But the GAO's own calculations are that 14 percent of undergraduates nationwide secured loans from private lenders in 2007-2008. As such, we hope officials are paying close attention to the implementation of the health care reform law for any broadly applicable insights that can be gleaned.
Editorials are written by The Herald's editorial page board. Send comments to editorials (at) browndailyherald.com.
