Student Financial Aid Programs

Student Financial Aid Programs
BETH Thank you for inviting us back to present part 3 in a series on student financial aid. As done in past presentations, we will focus on financial aid from the student and institutional vantage points. We hope that today’s slideshow and narrative will provide you with an understanding of how the money gets to the students. PART THREE

Getting the $$$ To The Student
Determine Cost of Attendance Packaging Policy Award Notification Disbursement of Funds BETH This slide provides an overview of today’s presentation. 9/20/2018 Commission Presentation

Getting the $$$ To Student
Calculate EFC Determine Cost of Attendance Disburse Aid BETH We will lead you through all five processes of how institutions “GET THE MONEY TO THE STUDENT”. Step 1 – We begin by determining the Cost of Attendance – a student is assigned a student budget based upon institutional categories – living with parents, on-campus housing or living off-campus, and is the student a resident (i.e., California) or non-resident (out of state or international). Step 2 – The student files a FAFSA and the U.S. Department of Education calculates the “Estimated Family Contribution”. The student’s EFC is transmitted electronically to the institution. The institution assigns the appropriate student budget (i.e.., cost of attendance) and then subtracts the student’s EFC. If you will recall from a former presentation – we demonstrated how the student’s financial need is determined. Let’s look again at that. GO TO SLIDE 4. 3 – The institution then packages the student with financial aid resources up to, but not to exceed, his/her “unmet need”. There will be more information explaining the packaging process later in our presentation. 4 – Once the package is created, the institution sends the student an award notification, either by mail or electronically. The award notification specifies what types of aid and the amounts of each type of aid the student will receive. 5 – Finally, the student’s aid is disbursed after checking her enrollment status, satisfactory academic progress, and any other conditions of eligibility required. SHOW ME THE MONEY!!!! The process is invisible to the student. All the student sees is this! (CLICK FOR COLORED AWARD NOTIFICATION) That’s the simplified version. Next, we will delve into a bit more detail about the five stages of getting the money to the student. Award Notification 9/20/2018 Commission Presentation

Getting the $$$ To Students
Cost of Attendance Expected Family Contribution MINUS BETH Here’s the method of determining a student’s financial aid eligibility or “financial need”. COA – EFC = Financial Need The general rule for packaging is that the student’s total financial aid and other resources must not exceed the student’s financial need (COA minus EFC). Except for Pell Grants, federal and state award amounts are affected by the student’s other aid included in their package. EQUALS 9/20/2018 Commission Presentation

Commission Presentation
Cost of Attendance Determined by federal law Higher Education Act, Sec. 472 Law specifies types of educational costs allowed in the “cost of attendance” Institutions determine appropriate amounts for those types of costs MEREDITH Read slide. Examples of ‘types” of educations costs would include books, housing & meals, and tuition & fees. 9/20/2018 Commission Presentation

Cost of Attendance Types of Educational Costs Tuition & Fees Books & Supplies Housing & Meals Transportation Personal/Miscellaneous MEREDITH Let’s review the types of educational costs allowable from our prior presentation. READ SLIDE Costs represent “average” cost for a category of student (i.e., CA resident vs. non-resident [out-of-state or international] status; or living on-campus, off-campus, or at home with parents) Institutions use the SEARS guidelines issued by CSAC to assist them with this process annually. Let’s take a look at that slide from the Part One presentation given last November. GO TO SLIDE 7. 9/20/2018 Commission Presentation

Cost of Attendance 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 & Meals Personal/Miscellaneous Books & Supplies Many colleges use some or all of these figures, relying on CSAC guidelines to meet federal requirements for student budgets MEREDITH Institutions use the SEARS guidelines issued annually by CSAC to establish “average” costs for student budget items. 9/20/2018 Commission Presentation

Cost of Attendance California Community Colleges
Budget Components College of the Canyons Tuition & Fees $768 Books/Supplies $1,332 Housing/Meals $9,522 Transportation $954 Misc/Personal $2,340 TOTAL $14,916 MEREDITH The student budget represents the “average” costs by budget component. The budget is for the academic year – which is 9 months. You’ll see a bit later in the presentation how the colored areas (i.e.., tuition & fees and housing/meals) are direct institutional costs and how they differ in disbursing aid to the student. *Sample Student Budget –2-Year Public California Community College, Academic Year, California Resident, Living Off-campus 9/20/2018 Commission Presentation

Cost of Attendance UC and CSU
Budget Components UC Berkeley CSU Long Beach Tuition & Fees $7,800 $3,116 Books/Supplies $1,326 $1,386 Housing/Meals $9,122 $9,288 Transportation $684 $1,206 Misc/Personal $1,606 $2,174 TOTAL $21,014 $17,170 MEREDITH You may have noticed that the primary difference between the cost of attendance among the various segments of higher education is the cost of the student’s TUITION & FEES. CCC fees $768, CSU fees $3,116, UC fees $7,800 and next we’ll show you an example of tuition & fees for the Independent and Proprietary colleges/universities. *Sample Student Budget – 4-Year Public UC and CSU, Academic Year, California Resident, Living Off-Campus 9/20/2018 Commission Presentation

Cost of Attendance Independent and Proprietary
Budget Components University of San Diego Tuition & Fees $32,564 Books/Supplies $1,380 Housing/Meals $9,288 Transportation $1,098 Misc/Personal $2,520 TOTAL $46,850 This speaks for itself. Independent and proprietary institutions do not receive tax payer subsidies and therefore charge tuition to cover the cost of delivering a post-secondary education. The Cal Grant program originated in 1955 when the demand for classroom space by veterans exceeded available space in the public segments. Instead of building new public colleges, the legislature created the Cal Grant program as a voucher that student could use in the private segment, which did have classroom space for these students. *Sample Student Budget – 4-Year Private College or University, Academic Year, California Resident, Living Off-Campus 9/20/2018 Commission Presentation

Packaging - Definition
Packaging is the process of combining various types of aid from a variety of sources to meet the financial need of the student. Packaging policy is defined as: Determining what types of financial aid (i.e., grant, loan, workstudy) a student will be awarded, in what order, and the amount of each award. BETH Financial Aid Office establishes a packaging policy for each academic year Various campus constituencies (i.e., deans, business/fiscal, Board of Trustees, administration, Financial Aid Advisory Committee) have input into financial aid packaging policy, depending on the particular institution’s organizational structure at the individual campus. The policy clarifies the general minimum eligibility standards, packaging mechanisms (first-come, first-served, % of self-help, rationing funds to target student populations, such as 1st generation student or ethnic minority students) intended to best distribute funds, and determines the order of aid packaging sequence. (Federal Pell Grant foundation and awarded first. Pell eligible students treated differently than non-Pell eligible student with lowest incomes, etc.) 9/20/2018 Commission Presentation

Application & Packaging Priority Deadlines
Institutions establish an annual priority filing date to determine institutional aid funding priority. In California, the financial aid priority filing date generally coincides with CSAC’s March 2nd Cal Grant application deadline However, the CCC’s package year round and generally publish a May priority filing deadline to award limited funds Also, community college students have a secondary Cal Grant application deadline of September 2nd BETH Read slide. 9/20/2018 Commission Presentation

Packaging The financial aid package is created with a combination of grants, scholarships, loans, and workstudy Institutions establish their own packaging policies within the parameters of federal, state, and institutional guidelines Beth Read slide 9/20/2018 Commission Presentation

Packaging Financial aid packaging policies will vary between institutions based upon differences in: Cost of Attendance Self-Help Policy Priority Filing Deadline Institutional Grants & Scholarships Packaging Philosophy Student Loan Philosophy BETH Cost of Attendance includes the five student budget components. Can you name them? “Self-help” policy is a term for the students option to either earn money to help pay for college from a workstudy job, or borrow through a student loan program. Priority filing deadlines were discussed on the previous slide. Institutional Grants & Scholarships availability vary school to school, and segment by segment. Packaging Philosophy was just discussed, and vary greatly from school to school, and segment by segment just like the availability of institutional grants and scholarships. Student Loan Philosophy varied widely. Some institutions package loans for all students to reduce the “unmet need”. Other schools package student loans only when the student has indicated a preference for a loan on their FAFSA. And some colleges need an activation request from the student directly if they choose to participate in the Stafford Loan program. You see we wear many hats in Financial Aid. We are even PHILOSOPHERS. We even had a loan called the “PLATO” loan for students. BETH PROP HERE. 9/20/2018 Commission Presentation

Packaging In determining the student’s need for aid, we must first consider other educational resources the student expects to receive. This may consist of veteran's benefits, EOPS/CARE Grants, Bureau of Indian Affairs, or other educational benefits, including outside scholarships Next, a financial aid package is created to come as close as possible to meeting the student’s financial need MEREDITH Read slide. 9/20/2018 Commission Presentation

Packaging Calculated Financial Need $10,000 Minus Need-Based Aid $ 7,500 Minus Non-Need Based Aid $ 1,000 Equals “Unmet Need” $ 1,500 MEREDITH Here’s a simplified version of how we package a student’s financial need. First, we determine the Calculated Financial Need = COA – EFC = Financial Need (You will remember this from SLIDE 4) Next, we determine the types and amounts of any Need-Based Aid – Pell Grant, Cal Grant, FSEOG, Federal Workstudy, Stafford Subsidized Loan, and some scholarships for the student. Then, we subtract any Non-Need Based Aid – such as Unsubsidized loans, private loans, and scholarships The result is the Unmet Need – This is the G-A-P which results between the student’s need and available aid. If adequate resources are not available to fully meet this student’s “unmet need”, the student does not get a full financial aid package $10,000. GRANTS ARE NOT ENOUGH! STUDENTS MUST SUPPLEMENT WITH A STUDENT LOAN. 9/20/2018 Commission Presentation

Sample Packaging Sequence
State Fee Waiver / Grant Federal Pell Grant Federal Academic Competitiveness Grant and SMART Cal Grant Federal Supplemental Educational Opportunity Grant MEREDITH After tuition & fee waivers, the Federal Pell Grant is the “foundation” and first federal student aid program to be awarded. Next considered are the new ACG or SMART grants, again a federal program. Then, state grant aid is awarded if the student is eligible. Then comes the federal campus-based aid programs – SEOG. The SEOG is an additional grant a low-income student can receive, but it is limited in dollars. 9/20/2018 Commission Presentation

Sample Packaging Sequence
Federal / Institutional Workstudy Scholarships & Other Educational Resources Subsidized Stafford Loan Unsubsidized Stafford Loan PLUS Loan Alternative / Institutional Loan MEREDITH Then comes the self-help aid programs – first the workstudy programs, any institutional or outside scholarship awards, and the coordination of all other known student educational resources. Lastly, is a sequence of student loans – beginning with the Stafford Subsidized Loan, next the unsubsidized loan, the Parent Loan for Undergraduate Students, and lastly, any alternative or institutional loan to meet the student’s financial need. 9/20/2018 Commission Presentation

Packaging MEREDITH Here you see a simplified flow chart of the decision making required for packaging aid. Some institutions have sophisticated software systems which automate all packaging steps. The majority of institutions process their student aid packages with a combination of automated and manual steps. It looks simple here, but it is not. Let’s take a closer look. Step 1 Every student begins with whether or not they qualify for a tuition / fee waiver or grant? YES or NO YES – package the waiver or grant. Continue following the packaging sequence if the student still has unmet need. NO – Continue to Step 2 Step 2 Does the student qualify for a Federal Pell Grant? If YES, package amount from Pell Grant Payment Schedule based upon the assumption of full-time enrollment status for the full academic year (9 months). Continue following the packaging sequence if the student still has unmet need. If NO, skip to Step 5 – Cal Grant Step 3 If the student qualifies for a Federal Pell Grant, does the student also qualify for an ACG or SMART Grant? YES – award the ACG or SMART Grant. Continue following the packaging sequence if the student still has unmet need. NO – Go to Step 4 Step 4 Does the student have Federal Pell Grant eligibility and exceptional financial need to qualify for FSEOG? YES – package Federal SEOG. Continue following the packaging sequence if the student still has unmet need. NO – Skip to Step 5 Step 5 Does the student qualify for a Cal Grant? YES – Cal Grant A, B or C? Continue following the packaging sequence if the student still has unmet need. NO – Skip to Step 6 And so on and so forth. 9/20/2018 Commission Presentation

Student Award Notification California State University, Chico
MEREDITH This is an example of California State University, Chico’s packaging completed for a specific financial aid student. 9/20/2018 Commission Presentation

Packaging Most funds are limited Types and amounts awarded often do not meet the student’s total financial need Total amount of financial aid packaged may not exceed the student’s financial need BETH Many institutions have very complex package policies to ration funds effectively to meet their student population needs. Some families choose to borrow to fill the gap to cover the difference between the cost of attend and unmet need. Again, GRANTS ARE NOT ENOUGH to meet the financial need the student is eligible for. Over awards are a violation of federal regulation, create audit findings, and are a BIG NO NO !!!! 9/20/2018 Commission Presentation

Student Award Notification
Examples Community Colleges California State University California Student Aid Commission BETH Now, we will show you three samples of student award notifications. One from a community college, the second from a California State University, and the third is a CAR from the California Student Aid Commission used to notify a student of their Cal Grant eligibility. 9/20/2018 Commission Presentation

Student Award Notification College of the Canyons
BETH This is a sample of a student award notification letter, the type that might be mailed to students. It shows the student their cost of attendance, family contribution, and financial need. Then, it lists the types and amounts of awards for Fall and Spring semesters. 9/20/2018 Commission Presentation

Student Award Notification California State University, Chico
BETH Example of CSU, Chico’s electronic student financial aid award notification This letter is like a contract between the Financial Aid Office and the student It informs the student of what type and amount of aid has been offered This institution’s student award notification auto-accepts grants, and then the student must indicate “accept” or “decline” all self-help aid (i.e., workstudy and loans) 9/20/2018 Commission Presentation

Coordinating Student Resources
MEREDITH Refer to last page in full color at the back of your handout. This dizzy chart published by the U. S. Department of Education, May 2007, flowcharts the delivery process for a student’s financial aid. Let me walk you quickly through this. CHOOSING – 14 million aid applicants APPLYING – Loads of admission applications to more than 6,100 institutions nationwide FUNDING – $77 billion federal aid – and that’s broken down into grants, workstudy, loans (which includes 35 guaranty agencies and 3,200 lenders) and also state & institutional aid. ATTENDING – which is where the institution the student applies to creates a “financial aid package” for the student. Notice the multiple award packages from “Schools”, “States”, and “Private Foundations”. REPAYING – the loan path is down the center of this flowchart – with $47.3 Billion in the FFEL and $12.7 Billion from the Direct Loan programs during FY 2006. 9/20/2018 Commission Presentation

Coordinating Resources
STUDENT X – Foster Youth Financial Need = $17,170 CSU University Grant $3,000 F Pell Grant $4,150 Federal Workstudy $5,000 Stafford Sub Loan $3,500 Total Aid = $15,650 Unmet Need = $1,520 CHAFEE Grant $5,000 OVERAWARD = $3,480 MEREDITH Revisions to a student’s awards are necessitated by late awards, changes in enrollment status or the coordination of additional education resources which require re-packaging. This may result in an over award for the student. And federal law requires resolution of any overaward exceeding a $300 tolerance. Two common examples of a student over award: This first student is a foster youth attending California State University, Long Beach – A late CHAFEE GRANT award is sent to the institution by CSAC after the student has already been fully packaged to meet 100% of his financial need. 9/20/2018 Commission Presentation

Coordinating Resources
STUDENT Y Cal Grant “C” Nursing Student Financial Need $11,450 BOG Fee Waiver $800 F Pell Grant $4,150 F SEOG $2,000 Stafford Sub Loan $ 4,500 Total Aid = $11,450 Unmet Need $ - 0 - Cal Grant “C” $576 OVERAWARD = $576 MEREDITH The second example is of a Cal Grant C recipient who is a Nursing student attending a California Community College. A late notification for a CAL GRANT “C” award is received at a community college resulting in an overawarded student. It may too late to resolve the overaward – which is primarily corrected by decreasing the student’s workstudy or loan amount to make room for the additional good type of aid – GRANTS! We included this example as it demonstrates the critical nature of the timing of Cal Grant and Chafee Grant awards to students and institutions. 9/20/2018 Commission Presentation

Disbursement of Financial Aid
Checks and balances required prior to disbursement of aid to the student Enrollment Verification Institutional HOLDS Satisfactory Academic Progress MEREDITH Read slide. 9/20/2018 Commission Presentation

How funds are disbursed to students above and beyond costs owed to institution UC, CSU, Independent & Proprietary $$$ transferred into student account and credit balance disbursed to student for educational cost Community Colleges $$$ disbursed directly to student (no student accounts) MEREDITH Most institutions have student accounts. Each term the student’s tuition & fees charges, on-campus housing and meals plans are debited to the student account. Then. the financial aid is disbursed and posted as a credit balance to the student account. Generally, this then results in a credit balance due to the student. This credit balance is disbursed to the student for living expenses. This is a the standard business practice of financial aid disbursement at institutions in California, and nationwide. 9/20/2018 Commission Presentation

Timely Disbursement of Aid Late Disbursement of Aid Student Account Balance (Tuition & fees, on-campus housing and meal plans) $3,116 Financial Aid Disbursed (Grants, loans and scholarships) $15,650 $10,650 Balance Due/Balance Owed by Student $12,534 $ 7,534 BETH So to summarize the disbursement of aid to students, if the Cal Grant, or other aid, is delayed, the student will not have living expense money to pay their rent, transportation and food expenses. Financial aid is generally disbursed directly to the student at community colleges because CCC’s do not have student accounts due to not charging tuition to resident students. This is disbursement model for financial aid is considered a reimbursement for out-of-pocket expenses for tuition and fees, books & supplies, and funding for additional living (housing and meals), transportation and personal/miscellaneous expenses of attending college. 9/20/2018 Commission Presentation

Ultimate Goal – Serving Students
The ultimate goal for financial aid - between the time the student completes a FAFSA to the disbursement of funds – is serving students INVISIBLY Solid, efficient processes at the institutions make financial aid award delivery seem invisible to the student BETH The student has no idea how complicated the “behind the scenes” financial aid process can be. We want to hear them say “Wow, that was easy. All I did was fill out my FAFSA and I got money to help me pay for my college education!” Of course, the downside to making the process so relatively easy for the students, is that these students go on to become legislators or other decision-makers and sometimes make recommendations without understanding the full impact of their actions – and that is then our job to education them so that institutions can continue to assist students with equal access to higher education. Student retention and graduation is the goal. Successful retention occurs when the student is able to focus on their academics, not worry about how to pay for college, and moves on. 9/20/2018 Commission Presentation

Ultimate Goal BETH How many of you knew all the stuff that goes on behind the scenes in the Financial Aid Office? Congratulations! (IF NO HANDS RAISED) – your college did an excellent job. IF HANDS RAISED (recognize the person) – Except for workstudy students who worked on their campus in the Financial Aid Office – many of whom will someday be financial aid administrators! 9/20/2018 Commission Presentation

Next Presentation Guarantor and Lender Steps for Student Loan Borrowers Stafford Loan Direct Student Loan PLUS Alternative Loans BETH Here is a sneak preview of our next presentation for the Commission meeting on September 6, Our presentation will address the student loan program processes for institutions and students. We hope you now know that GRANTS ARE NOT ENOUGH! 9/20/2018 Commission Presentation

Thank You CASFAA – California Association of Student Financial Aid Administrators CCCSFAAA – California Community Colleges Student Financial Aid Administrators Association CLFE – California Lenders for Education ANY QUESTIONS? BETH Today’s presentation has been brought to you by CASFAA, CCCSFAAA and CLFE. Thank you for your attention and questions. 9/20/2018 Commission Presentation

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