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ILASFAA Annual Conference April 16-18, 2008 AN INTRODUCTION TO STUDENT FINANCIAL AID How did we get here? Why do we do what we do? Where do we go from.

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Presentation on theme: "ILASFAA Annual Conference April 16-18, 2008 AN INTRODUCTION TO STUDENT FINANCIAL AID How did we get here? Why do we do what we do? Where do we go from."— Presentation transcript:

1 ILASFAA Annual Conference April 16-18, 2008 AN INTRODUCTION TO STUDENT FINANCIAL AID How did we get here? Why do we do what we do? Where do we go from here?

2 Purpose: – To develop skills needed by the country – To provide increased access to post secondary education across income groups – To provide increased choice of post secondary schools for low and middle income students FACT: Federal Student Aid for post secondary education serves 8 million students each year – However, it represents less than 1% of the annual federal budget. How Federal and State Student Aid Evolved

3 How Did We Get Here? The History of Federal Student and State Student Financial Aid 1862 - The Morrill Act This act created Land Grant Colleges by encouraging states to establish public universities by providing Federal land and financial support. Created for the working classes, these colleges taught agriculture, military tactics, mechanical arts and classical studies.

4 How Did We Get Here? 1867 The first US Office of Education was created. It’s role was limited to gathering and disseminating information about the status of education 1944 – The Serviceman’s Readjustment Act This created the GI Bill. Originally created to cover tuition, fees, books, supplies and living expenses, this was the first major federal offering of student aid to individual students instead of institutions.

5 How Did We Get Here? 1957 Legislation was passed by the Illinois General Assembly and signed by Governor Stratton to create the Illinois State Scholarship Commission (ISSC). The purpose of the new agency was to increase access to college for Illinois students by offering scholarships and grants.

6 How Did We Get Here? 1958 – The National Defense Education Act This created the National Defense Student Loan (NDSL) Program – the first student aid program for non- veterans. A direct result of the launching on October 4, 1957 of the USSR Satellite SPUTNIK, Congress passed this act to fund student loans in the critical fields of study in math, science and foreign languages. ISSC awards the first honorary scholarships to academically-talented students with no financial need.

7 How Did We Get Here? 1964 – The Economic Opportunity Act This act created the College Work Study (CWS) Program. It offered students part-time employment opportunities while they pursued their college degrees.

8 How Did We Get Here? 1965 – The Higher Education Act (HEA) Title IV of the HEA created the Educational Opportunity Grant Program, increasing college opportunities for low- income students. It also created the Guaranteed Student Loan Program (GSL). This program allowed students to borrow from private lenders for college expenses. It was called “guaranteed” because the lenders wouldn’t lose money. Illinois legislation established the Illinois Guaranteed Loan Program (IGLP) with ISSC as the guaranty agency.

9 How Did We Get Here? 1967 Illinois issues the first need-based college grant under the new Monetary Award Program (MAP). Eventually, four million MAP awards will be issued by ISSC/ISAC between 1967 and 2007

10 How Did We Get Here? 1972 - HEA AMENDMENTS These amendments created the Basic Education Opportunity Grant (BEOG) Program. This new “portable” grant could be used at any eligible post secondary school. They changed the name of the Educational Opportunity Grant Program to SEOG because it now “supplemented” the BEOG Program They changed the name of the National Defense Student Loan Program to the National Direct Student Loan Program These amendments also established the State Student Incentive Grant (SSIG) Program and allowed Proprietary Schools to participate in Title IV Programs

11 How Did We Get Here? 1976 – HEA AMENDMENTS These amendments added SAP Requirements and required participating institutions to provide consumer information to students. They reauthorized all existing FSA programs and tightened the rules. 1976 Later becoming the Illinois National Guard (ING) Grant Program, ISSC began awarding scholarships to enlisted persons serving in the IL National Guard or Naval Militia.

12 How Did We Get Here? 1978 – Middle Income Student Assistance Act This act provided assistance to middle-income parents by expanding Basic Grant eligibility and lifting the income ceiling on the GSL Program.

13 How Did We Get Here? 1980 – HEA AMENDMENTS These amendments established PLUS Loans, allowing parents to borrow $3,000 per year for each dependent child, regardless of the parent’s income. They renamed the BEOG Program to the Pell Grant Program in honor of the prime sponsor of the program, Senator Claiborne Pell.

14 How Did We Get Here? 1986 - HEA AMENDMENTS These amendments created two need analysis formulas, one for Pell and another for all other Title IV Programs. They tightened academic and eligibility standard. They created a new loan program called the “Supplemental Loan for Students” (SLS) for Independent Students. They renamed the National Direct Student Loan Program to the Federal Perkins Loan Program after Congressman Carl D. Perkins.

15 How Did We Get Here? 1988 The Guaranteed Student Loan Program was renamed the Stafford Loan Program in honor of Senator Robert T. Stafford, a major sponsor of student assistance legislation. 1989 The Illinois State Scholarship Commission (ISSC) was renamed the Illinois Student Assistance Commission (ISAC).

16 How Did We Get Here? 1990 The Omnibus Budget Reconciliation Act This act introduced “Ability to Benefit” testing. It also held schools accountable for high loan default rates. Schools were ineligible for the Stafford Loan Program if rates were 35% or higher.

17 How Did We Get Here? 1992 These amendments combined the two Federal need analysis formulas into one. They required the student aid application process to be free to students They renamed the private lender loan programs FFELP and created the Federal Direct Loan Program. They reauthorized student aid programs for 5 years.

18 How Did We Get Here? 1996 The first awards were made to students under the Illinois Incentive for Access (IIA) Program 1997 Illinois families were afforded a tax- advantaged method of saving for college through the Illinois Prepaid Tuition Program called College Illinois!

19 How Did We Get Here? 1997 Taxpayer Relief Act This act established tax credits and relief measures to offset the cost of post secondary education. These included the Hope Scholarship; Lifetime Learning; Student Loan Interest deduction, education IRAs, etc. It also authorized various initiatives and incentives for saving for college.

20 How Did We Get Here? 1998 The HEA was amended to establish the Return to Title IV rules. The SSIG Program was renamed LEAP and GEAR UP was created. These amendments increased services and options for federal student loan borrowers. For the first time, Title IV eligibility was tied to compliance with federal and state drug laws.

21 How Did We Get Here? 2005 The Higher Education Reconciliation Act of 2005 (HERA) This act created ACG and SMART Grants. It made active duty military personnel independent. The Grad PLUS Program was created. It changed the treatment of prepaid tuition plans. The qualifications for the Zero EFC and Simplified needs test was changed.

22 How Did We Get Here? 2007 The College Illinois! Capstone Loan Program pilot was launched to make low-interest loans with “salary- sensitive” interest rates to Illinois college seniors. The College Cost Reduction and Access Act of 2007 2008 Reauthorization is Pending

23 What Principles Guide Us? Our institutions each have a Code of Conduct The Participation Agreement between an institution and the Department of Education addresses conduct ILASFAA has a Statement of Ethical Principles in the Association’s Policies and Procedures Manual MASFAA has a Statement of Ethics and Professionalism listed in their Policies and Procedure Manual NASFAA has a Statement of Ethical Principles and Code of Conduct for Institutional Financial Aid Professionals

24 Why Do We Do What We Do? A Desire to help others Enjoy interacting with people Good communicators Good listeners Responsive to the needs of others Enjoy problem solving Self-sacrificing Organizational abilities Strong writing skills Detail oriented Dependable Comfortable working with numbers Accurate Ability to navigate through bureaucracy Like to be continually educated

25 Where Do We Go From Here? “Lifers” will move up through the ranks to Asst. Director, Director, Chief Administrator, VP, etc. Account Executives with lenders Positions with guarantee agencies or servicers Loan departments with banks Human Resources Career guidance Counseling Any high-volume environment that involves contact with people

26 The More You Give, the More You Get Volunteer in your Community Volunteer Opportunities in the State, Regional and National Associations – Professional and personal growth – Forum to collaborate on new and proposed legislation and regulations – a unified voice – Networking opportunities “Success usually comes to those who are too busy to be looking for it.” - Henry David Thoreau

27 Janet Ozuna Director of Finance Midstate College 411 W. Northmoor Road Peoria, IL 61614 (309) 692-4092

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