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Lisa, a single mother who receives approximately $700 a month in Social Security disability payments, qualified for over $45,000 in federal Parent PLUS loans to send her daughter to school. “…It’s something that in my lifetime I couldn’t pay back. Let’s be realistic. With what I get, there was no way,” , a reporter for ProPublica. For Lisa, the standard monthly payment she will have to make on her Parent PLUS loans will be over $500 a month—which will eat up over 70 percent of her monthly Social Security benefit. Situations like Lisa’s illustrate deep problems with financial aid and college affordability. Recently, a lot of coverage, , has been given to the definition of for parent loans and who should and should not qualify for one. But this debate has masked the real problem—our higher education financing system does not meet the needs of today’s students.

How broken is the system? Keep in mind that Lisa took out this money to send her daughter to school and that it is likely her daughter will max out her student loans as well. If she graduates in four years, that sums up to an intergenerational debt of $72,000 for a low-income family to send their child to college—a very painful tab for a family to bear.  Given the current higher education financing system in place, what other choice do low- and moderate-income families have? Sure, students could attend a public institution, but even in the public sector tuition and fees have gone up dramatically as states have continued to disinvest and institutions have shifted the burden of paying to students and families.

The hard truth is that not enough is being done by institutions, states, and the federal government to ensure that higher education is affordable for low- and middle-income families. We can do better by students and families. Instead of tinkering, we need to reimagine the federal financial aid system so that it works for today’s students—one that focuses aid on the low- and middle-income students who need it most.

Many researchers and stakeholders have been trying to move the discussion to than just marginal tweaking. Just last year, . Instead of doling out costly higher education tax benefits to middle- and upper-income families who send their children to college no matter what, we redirect that $180 billion primarily toward the Pell Grant program. Bottom line: If we get rid of poorly-targeted tax benefits, we could greatly increase the maximum Pell Grant, make it an entitlement, and help expand it to the middle-class. We could bring back year-round Pell and include ability to benefit students. In addition, we could create a Pell Grant bonus fund for public and private non-profit colleges that enroll a substantial share of low-income students and graduate at least half or their students. The savings from redirecting the tax benefits would ensure that this increase to Pell wouldn’t cost the federal government a dime.

But any discussion of re-designing higher education finance has to involve state funding. Public colleges and universities have been and will continue to be the largest source of postsecondary education for the foreseeable future. Disinvestment has been occurring for decades now, but the rate of disinvestment has become truly worrisome over the past few years. The average state now spends than before the recession. We need a renewed higher education federalism that repairs the state-federal funding relationship. ������Ƶ’s aforementioned proposal creates a 10-year, $10 billion grant program that would provide incentives for state-level policy reforms including establishing statewide access and completion goals and maintaining or increasing state support for higher education. In addition, ������Ƶ is continuing to research ways we can renew the federal and state partnership, recognizing that state disinvestment is one of the biggest cost drivers of higher education.

Institutions can’t be let off the hook either. There needs to be accountability and transparency. Reforming financial aid only ensures that funds are distributed more effectively. But there needs to be new incentives for institutions to not just soak up this aid leaving students with the same price they were facing before. ������Ƶ’s proposal includes an accountability system that uses a combination of eligibility thresholds and financial incentives to encourage colleges to keep higher education affordable and help students earn degrees. And while is still under development, the result could eventually provide institutions that are rated well in areas of student outcomes and college affordability with extra funds to help make college more affordable.

Lisa’s story illustrates well that our financial aid system is broken for families who need the most support getting into and through college. It’s time to move away from financing options that provide no real relief for students and families. We need to fix the system to make it simpler, more understandable, and fairer. It’s time to move the conversation from tinkering to overhauling.