Student Aid Modernization Initiative (SAMI) Marcus Szymanoski Manager, Regulatory Affairs DeVry Education Group April 6, 2017 Champions of Financial Aid - 2017 ILASFAA Conference

Champions of Financial Aid - 2017 ILASFAA Conference What is SAMI? The Student Aid Modernization Initiative (SAMI) is a new approach to awarding federal student aid. SAMI has two primary components: Program-length awarding Proportional, per-unit distribution of financial aid Champions of Financial Aid - 2017 ILASFAA Conference

What is wrong with the current system? The current structure has several limitations: Designed for traditional, semester-based programs - requires a defined Academic Year Students cannot plan beyond year-one Students must re-apply every year (FAFSA) Complex, burdensome, inefficient Year-round study is not supported by Pell Champions of Financial Aid - 2017 ILASFAA Conference

What is wrong with the current system? Pell Grant issues Enrollment status tier (not actual enrollment) determines maximum Pell Grant award Students attempting different portions of a program (often) receive the same funding Year-round study is not supported Award amount can change annually Champions of Financial Aid - 2017 ILASFAA Conference

What is wrong with the current system? Direct Loan issues Enrollment status (part-time), not actual enrollment, determines eligibility Students attempting different portions of a program can borrow the same amount Complexity Student’s grade level affects loan amount Student’s dependency status affects loan amount Institutions lack authority to limit borrowing Champions of Financial Aid - 2017 ILASFAA Conference

Example of Current Awarding Scenario Aaron: 8 Semesters to complete = 4 full Pell awards, $23,100 Bill: 10 Semesters to complete = 5 full Pell awards, $28,875 Funding Inequity: $5,775 Champions of Financial Aid - 2017 ILASFAA Conference

Champions of Financial Aid - 2017 ILASFAA Conference What is the Solution? SAMI Award financial aid to students for the full duration of their academic program Distribute financial aid proportionally as the student progresses through their academic program Champions of Financial Aid - 2017 ILASFAA Conference

Student Aid Modernization Initiative Aaron: 8 Semesters to complete = $23,100 Bill: 10 Semesters to complete = $23,100 Funding Inequity: $0 Champions of Financial Aid - 2017 ILASFAA Conference

Champions of Financial Aid - 2017 ILASFAA Conference How Does SAMI Work? Student completes the FAFSA once - upon beginning an academic program Student receives federal student aid award information for their entire academic program “Program Awards” The program award(s) are distributed proportionally as the student progresses Champions of Financial Aid - 2017 ILASFAA Conference

How Does SAMI Work? Each of the student’s program awards are divided by the number of units required to complete the academic program Program-Level Award / Units in the program = Per-unit award Champions of Financial Aid - 2017 ILASFAA Conference

How Does SAMI Work? Each of the student’s program awards are divided by the number of units required to complete the academic program Program-Level Award / Units in the program = Per-unit award Champions of Financial Aid - 2017 ILASFAA Conference

How Does SAMI Work? The per-unit award is multiplied by the number of units being attempted in the enrollment period Units in enrollment period X Per-unit award = Grant award Champions of Financial Aid - 2017 ILASFAA Conference

Champions of Financial Aid - 2017 ILASFAA Conference Pell Example The following example uses 2015-16 Pell Grant award amounts as a baseline to approximate program level Pell Grant award using the SAMI method A student with a 0 (EFC) might have a maximum program-level award of approximately $23,100, at the bachelor’s level ($5,775 x 4 years of study) Champions of Financial Aid - 2017 ILASFAA Conference

Champions of Financial Aid - 2017 ILASFAA Conference Pell Example This example also assumes the student is enrolled in a 120 credit-hour bachelor’s program, and that the student enrolled for 15 credit-hours in the enrollment period being awarded Champions of Financial Aid - 2017 ILASFAA Conference

Champions of Financial Aid - 2017 ILASFAA Conference Pell Example Program-Level Pell Grant Award / Units in the program = Per-unit Pell Grant award $23,100 / 120 = $192.50 Champions of Financial Aid - 2017 ILASFAA Conference

Pell Example Units in enrollment period X Per-unit award = Pell Grant award 15 X $192.50 = $2,888 Champions of Financial Aid - 2017 ILASFAA Conference

Champions of Financial Aid - 2017 ILASFAA Conference Pell Example Using SAMI, the award automatically compensates for the student’s enrollment changes in Term 2, unlike the current method, which awards the same amount for both terms. Champions of Financial Aid - 2017 ILASFAA Conference

Champions of Financial Aid - 2017 ILASFAA Conference SAMI Concepts Program Awards: Student receives program-length awards up front, based on applicable variables such as credential type and financial need Unit: The term “unit” denotes the measurement used to subdivide an educational program into its constituent parts (credit hours, clock hours, competencies, etc.) Champions of Financial Aid - 2017 ILASFAA Conference

Champions of Financial Aid - 2017 ILASFAA Conference SAMI Concepts Enrollment Period: The period of enrollment used to calculate and award a student’s financial aid - no defined academic year exits under SAMI Cost of Attendance: COA continues to exist under SAMI, serving as a factor limiting a student’s total awards in an enrollment period The COA applied to an enrollment period under SAMI is calculated on a per-unit basis Champions of Financial Aid - 2017 ILASFAA Conference

Champions of Financial Aid - 2017 ILASFAA Conference SAMI Concepts Expected Family Contribution: EFC is used in two ways: To calculate the student’s initial program award eligibly (Pell Grants, FSEOG) To determine a student’s financial need within each enrollment period Two EFC values will exist An annual EFC to determine a student’s program-level awards A per-day EFC used to determine a student’s financial need Champions of Financial Aid - 2017 ILASFAA Conference

Champions of Financial Aid - 2017 ILASFAA Conference SAMI Concepts 150 Percent Cap: To appropriately limit the amount of aid a student can use over time, while also accounting for unproductive units, students are limited to 150% of the program-level award, for each award type Going back to the previous example, a student with Pell Grant program-level award of $23,100, would have a 150 percent cap of $34,650 Champions of Financial Aid - 2017 ILASFAA Conference

Champions of Financial Aid - 2017 ILASFAA Conference SAMI Concepts 150 Percent Cap: SAMI also incorporates a pace expectation of 67% Necessary to avoid hitting the 150% cap before the program is completed – also encourages persistence Schools will have discretion to address unique circumstances Champions of Financial Aid - 2017 ILASFAA Conference

Champions of Financial Aid - 2017 ILASFAA Conference SAMI Concepts Direct Loans As with Federal Pell Grant awards, loans are awarded at the program level Eliminates the need for award year maximum loan amounts based on grade level Eliminates the need to differentiate loan award amounts based on the student’s dependency status Champions of Financial Aid - 2017 ILASFAA Conference

Champions of Financial Aid - 2017 ILASFAA Conference SAMI Concepts Figures above are for illustrative purposes only, not policy recommendations Additional program tiers should be considered to address the full spectrum of programs (certificate, boot camps, health professions, etc.) Champions of Financial Aid - 2017 ILASFAA Conference

Champions of Financial Aid - 2017 ILASFAA Conference SAMI Concepts Pell: Several other program-level tiers would exist Figures above are for illustrative purposes only, not policy recommendations Additional program tiers should be considered to address the full spectrum of programs (certificate, boot camps, health professions, etc.) Champions of Financial Aid - 2017 ILASFAA Conference

What is the Anticipated Impact? Students will have the ability to receive federal student aid (including Pell) “year-round,” in proportion to their enrollment Increased precision of federal student aid awards, increasing overall system efficiency More equitable distribution of federal student aid among students Incentive for institutions to “lock-in” tuition rates for continuing students Champions of Financial Aid - 2017 ILASFAA Conference

What is the Anticipated Impact? Students will have the ability to develop a financing plan for the entire academic program Students will be empowered to make financially-informed enrollment decisions Students will more easily understand federal student aid, and how awards relate to enrollment, progress toward completion, and other behaviors Excessive loan debt will be more difficult to incur Champions of Financial Aid - 2017 ILASFAA Conference

What is the Anticipated Impact? Students with the time and ability to increase course load will be incentivized to do so, since awards increase proportionally with enrollment Students who study part-time will be better supported by receiving federal student aid in proportion to their enrollment Reduction in administrative burden through simplified awarding procedures, less frequent ISIR processing, verification, and related activities Champions of Financial Aid - 2017 ILASFAA Conference

What is the Anticipated Impact? Increased predictability of federal budget impact of Title IV programs Institutions of higher education will have greater flexibility to innovate, experiment, and improve education delivery models Increased cohesion between policymakers and students, by viewing postsecondary education as a multi-year commitment Champions of Financial Aid - 2017 ILASFAA Conference

Questions. https://www. nasfaa mszymanoski@devrygroup.com (630) 353-9924 Champions of Financial Aid - 2017 ILASFAA Conference