TASFAA NAOW Workshop 2010 Packaging Financial Aid Martin R. Hernandez Director of Financial Aid Paul Quinn College

What is Packaging? Packaging is a process by which the financial aid office awards a combination of aid from several sources to meet part or all of a student’s financial need.

Packaging Goals of Financial Aid Administrator Provide as many students as possible with resources to meet their financial need Distribute resources in an equitable manner Provide assistance that will be the most beneficial Attract students to the school

Resources Resources include (but are not limited to): Pell Grant (first source of aid) Scholarships Other Federal, State and Institutional Grants Subsidized Stafford and Perkins Loans Need-based employment Waivers of tuition and fees Fellowships or assistantships Source: FSA Handbook , Vol. 3, Pages

Resources Resources include (but are not limited to): VA Benefits Americorps Funds Unsubsidized Stafford Loans* PLUS Loans* Private Loans* *indicates resources that may exceed need, but may not exceed COA. Source: FSA Handbook , Vol. 3, Pages

Additional Guidelines Enrollment criteria Classification Annual and Aggregate Maximums Annual Minimums Need Based vs. Non-Need Based Academic Criteria Residency Criteria

Steps in Packaging Determine the cost of attendance (COA). Calculate financial need Determine eligibility for individual funds Develop package using funds for which student qualifies Refer to supplemental sources of assistance as needed

Step 1- Determining the Student’s Cost of Attendance (COA) Tuition & Fees Books & Supplies Room & Board Transportation Miscellaneous/Personal Dependent Care Loan Fees Cost of approved study-abroad program Source: FSA Handbook , Vol. 3, Chapter 2

Step 2 – Calculating the Student’s Financial Need Cost of Attendance -EFC Financial Need

Step 3 – Determine Eligibility for Individual Resources Determine Pell Grant eligibility first FSEOG Generally awarded to neediest students (Pell Grant recipients) State Grants Examples: Texas Grant, TEG Criteria set by the state Institutional Grants & Scholarships - criteria set by the institution

Step 3 – Determine Eligibility for Individual Resources Work-Study Examples: FWS, TCWSP Awarded within need and according to institutional policy Perkins Loan Generally awarded to neediest students and according to institutional policies Subsidized Stafford Loan Awarded within need, maximums determined by federal regulations

Step 4 – Develop Package Develop package using funds for which the student qualifies Institution’s award packaging policy can influence the resulting package Total of package cannot exceed COA

Step 5 – Other Supplemental Assistance Unsubsidized Stafford PLUS Loan Private Loans

Five Basic Packaging Techniques First-Come, First-Served Special Targeted Groups Self-Help Concept Equity Concept Absolute Dollar Equity Fixed Percentage Equity Packaging to Cost of Attendance

Packaging Techniques First-Come, First-Served Based on the order in which completed applications are received by the aid office until funds are exhausted.

Packaging Techniques Targeted Groups Separate packaging criteria for specific groups of students in addition to specific criteria required by law or regulation. (Good for institutional scholarships)

Packaging Techniques Self-Help Self-help assistance awarded after the family contribution and before any consideration for gift aid.

Packaging Techniques Equity Concept Absolute Equity Students funded up to an institutional maximum fixed dollar amount with gift aid before their remaining need is filled with self-help. Fixed Percentage Equity An institutional maximum percentage of NEED or COST for all gift aid is used.

Packaging Techniques Packaging to Cost of Attendance Student’s FA need is met as much as possible according one or a combination of the previous techniques Unmet COA is filled using remaining unsubsidized Stafford loan eligibility, PLUS and/or Private Loans.

Packaging Techniques Many institutions do not use a specific model by itself. Variations of the models can be used to best fit the institutional objectives.

Award Notification Institutions are required to inform the student of: the amounts terms and conditions of his/her award manner and timing of payments Signature of acceptance by the student is no longer required. However, many institutions continue this practice.

Packaging Example Holly B. Needy Incoming first-year student, AY 10/11 COA = $20,000 EFC = $500 Qualifies for state residency Has PTA scholarship of $2000 Eligible for Pell Grant of $5500 Maximum awards: State Grant - $2500, Stafford Loan - $3500, Work Study - $2500, Institutional grant to fill remaining gap in gift aid. Package this student with the “FIXED PERCENTAGE OF NEED” equity model with a maximum of 70% gift aid (scholarship considered part of gift aid).

Packaging Example Determine need COA – EFC = Financial Need $20,000 - $500 = $19,500 Financial Need Determine gift aid Financial Need * Gift Pct = Max gift aid $19,500 * 70% = $13,650

Packaging Example Need 19,500 Max Gift Aid 13,650 Pell Grant 5,000 PTA Scholarship 2,000 State Grant 2,500 Institutional Grant 4,150 Gift Aid Awarded13,650 Remaining FA Need 5,850 Work Study 2,500 Sub Stafford Loan 3,350 Total Self-Help 5,850 Unmet FA Need 0 Total Package19,500 Can Holly get anything else?

Thank you for your attention! Questions? Martin R. Hernandez