1. FINANCIAL AID PRESENTATION CALIFORNIA STUDENT AID COMMISSIONERS

2. PRESENTED BY California Association of Student Financial Aid Administrators (CASFAA) California Community Colleges Student Financial Aid Administrators Association (CCCSFAAA) California Lenders For Education (CLFE)

3. November 29, 20063 Presentation Overview History & Student Eligibility Accountability Who We Are

4. November 29, 20064 History of Financial Aid Financial Aid began in private sector Private Colleges: Harvard College in the 1600’s No public funds until much later

5. November 29, 20065 1944 GI Bill enacted by Congress to assist WWII Veterans returning from the war

6. November 29, 20066 1955 California State Scholarship Commission created Cal Grant Program: Fueled by GI Bill benefits, the numbers of students in California pursuing post-secondary education exceeded available class room space at public universities

7. November 29, 20067 1955…more Rather than building more campuses, the state created a scholarship program with funding that students could use at private institutions where classroom space was available The scholarships were “portable” meaning the students took them to the institution of their choice

8. November 29, 20068 1958 The Soviet launch of Sputnik gave Congress the occasion to justify a limited form of student assistance in the name of national security The National Defense Education Act provided low-interest loans for college students, with debt cancellation for those who became teachers after graduation

9. November 29, 20069 1965 The Kennedy legacy, the civil rights movement, and the Johnson administration's War on Poverty converged in the mid-1960s The 89th Congress presided over the broadest sweep of social legislation since the New Deal

10. November 29, 200610 1965…more Along with breakthroughs in civil rights came large-scale aid to education, including the Higher Education Act signed by President Lyndon Johnson

11. November 29, 200611 California State Aid Programs Today Cal Grant A Tuition/Fees Tuition Charging Institutions $9,708 Cal Grant A Tuition/Fees University of California $6,141 Cal Grant A Tuition/Fees California State University $2,520 Cal Grant B Access Grant$1,551 Cal Grant C Tuition/Fees Books & Supplies ONLY BOOKS & SUPPLIES $3,168 $ 576

12. November 29, 200612 1954 The College Scholarship Service, founded by private colleges, developed a standard need analysis formula to award scholarship money 1957 National system of need analysis 1974 Uniform need analysis was used to award private and government money History Of Need Analysis

13. November 29, 200613 The Formula n CSAC used uniform need analysis to award Cal Grant funds n Today, CSAC uses the current need analysis, known as federal methodology (FM), to award Cal Grant funds

14. November 29, 200614 What is included in the Federal Formula? –Income from all sources (past year) –Parent’s employment status –Number of dependents –Federal income taxes –State income taxes –Net Assets n Family Size n Number of children in college n How many parents working n Age of the older parent

15. November 29, 200615 Cost of Attendance n COA is defined in HEA Sec. 472 where RULES are set by federal law and the actual STUDENT BUDGETS are set by the colleges n Student budgets include tuition, fees, books, supplies, room and board, transportation, miscellaneous personal n COA may also include child care, disability related expenses, computer expenses n COA may be increased or decreased by the college for an individual student if justified and documented in accordance with federal regulations

16. November 29, 200616 CSAC Assists Budget Determination in California Student Expense and Asset Survey (SEARS) –Collects student data every four years, updated with annual adjustments in between –Determines “average” student expense for: Transportation Housing & Food Personal expenses Books & Supplies –Many colleges use some or all of these figures, relying on CSAC guidelines to meet federal requirements for student budgets

17. November 29, 200617 The Financial Aid Process…

18. November 29, 200618 Goals of Financial Aid Institutions desire to: n Provide ACCESS and CHOICE n Conduct an accurate and fair assessment of the family ability to pay for college n Promote equity by awarding funds to the neediest students first n Promote efficiency by making the process work for all students n Be accountable for tax dollars and institutional funds

19. November 29, 200619 Financial Aid Process Outline n Student requirements for obtaining financial aid n Student will receive two documents, CAR & FAN, from CSAC and college respectively

20. November 29, 200620 The Initial Process… Filing the FAFSA n Student must complete and file a FAFSA each academic year n Deadlines –FAFSA –CAL Grant n Parent & student income requirements n List of schools

21. November 29, 200621 The Basic Formula n Formula guides the college’s awarding process n Determines eligibility for every student n Enacted and regulated by federal and state authorities while being implemented by the college Cost of Attendance Minus - Expected Family Contribution Equals = Financial Need Minus $1,500 (additional) Equals Eligibility for a New Cal Grant Recipient

22. November 29, 200622 Expected Family Contribution n The EFC is calculated by the federal processor from the data on the FAFSA n The formula is determined by federal law and adopted for California use by state law n It includes both student and parent’s ability to pay for a 9-month time period n College receives EFC electronically via “ISIR” n EFC adjustments permitted at the campus level based on verified information or special student or parent circumstances

23. November 29, 200623 Determination of Eligibility n College determines the student budget (COA), placing the student in the appropriate cost category n The college receives an ISIR and verifies student’s EFC n COA - EFC = Eligibility (Financial Need) n College works to find resources to fill the student’s need eligibility in a process called “packaging”

24. November 29, 200624 How The Formula Works CCC CSU UC Private Cost $15,000 $18,000 $20,000 $47,000 EFC - 2,600 - 2,600 - 2,600 - 2,600 Need $12,400 $15,400 $17,400 $44,400 Student’s “need” is met with a financial aid package made up of grants and scholarships along with reasonable amounts of “self-help” aid (work and loan)

25. November 29, 200625 COA - EFC = Financial Need

26. November 29, 200626 CAL Grant GPA Verification n CAL Grant process requirement n Filing date - March 2 nd or September 2 nd n Student files FAFSA annually n Most high schools and colleges submit GPA verification electronically for all enrolled students

27. November 29, 200627 California Aid Report (CAR) n The student receives a CAR directly from California Student Aid Commission (CSAC) based on information provided on the FAFSA and GPA Verification –CAR identifies student eligibility for CAL Grant (A, B, C) for the academic year

28. November 29, 200628 Financial Aid Notice (FAN) n The student will receive a FAN directly from the college to which they have applied and have been accepted n Provides the student with a financial aid award package n Indicates additional requirements the student must complete

29. November 29, 200629 Financial Aid Notice (FAN)…more n Cost of Attendance (COA) –9 month budget n Expected Family Contribution (EFC) n Types of aid offered: –Federal (PELL Grant, Loans, Work-Study) –State (CAL Grant) –Institutional (Grants, Scholarships, Loans) –Outside Aid (Independent Scholarships, Tuition Assistance, Fee Waivers)

30. November 29, 200630 Sample UC Riverside Financial Aid Notice (FAN) Total Cost of Attendance$22,217 Minus EFC 0* Equals Financial Need $22,217 Financial Aid Award Pell Grant4,050 Cal Grant A6,141 UC Grant6,320 Loan2,625 Work3,075 Total Aid= $22,211 *CSAC deducts $1,500 as gap for self-help for Cal Grant A, and $750 for Cal Grant B, to determine financial need for a Cal Grant

31. November 29, 200631 Financial Aid Notice Open Federal Requirements n Verification Process n Loan Documentation/Entrance & Exit Loan Counseling n INS - Citizenship n Selective Service n Social Security Number

32. November 29, 200632 Accountability n Colleges are held accountable by multiple authorities: –USDE conducts thorough program reviews Congress requires participating colleges to submit an annual audit Federal government conducts other miscellaneous reviews (INS, IRS, Inspector General Office, etc.) USDE follows-up on consumer and student complaints –CSAC conducts grant audits –EdFund conducts loan program reviews

33. November 29, 200633 Summary of Delivery n The college is the bottom line in the student aid process -- both for the students and for the government agencies n The college receives data, works individually with students, parents and families, verifies and documents financial data and eligibility (citizenship, residency, etc.), determines eligibility, selects funds for student aid package, determines unit load and eligible programs and determines continuing eligibility

34. November 29, 200634 Summary of Delivery …Continued n Delivery systems (other than Cal Grant) differ: –For Pell Grant, colleges identify eligible recipients from among all applicants based on set EFC criteria –For FSEOG, Federal Work Study, Perkins Loan, and State Work Study, colleges select recipients from among eligible students –For most loans, colleges provide access to capital –For segmental programs, colleges select recipients from among eligible students (when funds are limited) or identify recipients when funds are available to all eligible students

35. November 29, 200635 Summary of Delivery …Continued n However, all of these programs have something in common…the college identifies the student recipients, not the federal or state government

36. November 29, 200636 WHO WE ARE: California Association of Student Financial Aid Administrators n CASFAA is a non-partisan, non-profit professional organization with a membership of more than 1,700 California student financial aid administrators n CASFAA represents more than 500 colleges & universities, all segments of higher education in the State of California

37. November 29, 200637 CASFAA Mission n CASFAA members share a common goal of improving access to and delivery of federal, state, institutional and private donor financial aid to students in the State of California n CASFAA’s mission is to provide training and professional development opportunities to the financial aid community and to advocate on behalf of the financial aid profession for student educational access and choice

38. November 29, 200638 WHO WE ARE: California Community Colleges Student Financial Aid Administrators Association n CCCSFAAA is a not-for-profit professional organization with a membership of nearly 1,000 financial aid professionals - 716 active members and 263 associate members n CCCSFAAA represents 109 California Community Colleges which last year enrolled 2.5 million students and is the largest system of higher education in the world

39. November 29, 200639 CCCSFAAA Mission n First, accessibility to higher education is essential to the development of human potential and the human condition; and financial aid is an essential access vehicle to higher education; and n Second, that the effective administration of financial aid programs require accurate, current and focused information on federal and state legislation and regulations governing the student financial aid programs; and n Third, communication between members of the profession, government agencies, private and community organizations is critical to the development of effective financial aid programs and the advancement of our profession

40. November 29, 200640 WHO WE ARE: California Lenders for Education CLFE formed in 1988 and incorporated as a non-profit mutual benefit corporation CLFE is an association represented by lenders, secondary markets, servicers and guaranty agencies

41. November 29, 200641 CLFE Mission CLFE defines common goals and engages in activities to improve and preserve the quality and integrity of education loan products and services delivered to students and colleges in the State of California through a diverse coalition of industry participants

42. November 29, 200642 CLFE Goals CLFE is committed to serving the needs of California students, parents and schools CLFE partners in the delivery and administration of education loans CLFE promotes responsible borrowing, default prevention/aversion and debt management

43. November 29, 200643 Contact Information CASFAA President Mindy Bergeron (925) 969-3388 bergeron@jfku.edu CCCSFAAA President Beth Asmus (661) 362-3275 beth.asmus@canyons.edu CLFE President Rob Smith (530) 244-7960 robsmith@salliemae.com

44. November 29, 200644 Thank You