The 2014 National Student Aid Profile: Overview of Federal Programs

• "Foundation" of aid package

awarded to undergraduate students with lowest EFCs who have not already earned a baccalaureate degree

• Unaffected by student's other aid

• Awarded to undergraduate students with lowest EFCs who have not already earned a baccalaureate degree
• Priority is given to Pell Grant recipients
• Award must be made in order starting with lowest EFCs

• Schools must contribute at least 25% of funding, with limited exceptions
• Schools may transfer up to 25% of allocation to Federal Work-Study Program

The 2014 National Student Aid Profile: Overview of Federal Programs

NASFAA Policy Department

Presentation Overview

• Brief History of Federal Government's Role in Student Aid
• Higher Education Today
• Federal Financial Aid Programs

Justin Draeger, President

Joan Berkes, Senior Policy Analyst

Karen McCarthy, Senior Policy Analyst

Megan McClean, Managing Director for Policy and Federal Relations

Jesse O’Connell, Assistant Director for Federal Relations

Blondeen Philemond, Policy Intern

Charlotte Pollack, Research Analyst

• Need Analysis
• Budget and Appropriations
• HEA Reauthorization
• NASFAA Tools
• Resources and Q & A

• FWS
• FSEOG
• TEACH Grant
• Direct Loans & Origination Fees
• Iraq Afghanistan Service Grants

• FY 2015 Budget and Appropriations

Federal Pell Grant Program

Federal Student Aid Today: A National Profile

There are multiple ways of filing the FAFSA:

• How will sequestration impact future award years?

Processed

Application

output sent to:

• Maximum Pell Grant for award year 2014-15: $5,730
• Impact of sequestration for upcoming award year:

Federal Aid Available for Packaging:

Pell Grant

FSEOG

FWS

Perkins Loans

Direct Loans

TEACH Grant

Iraq and Afghanistan Service Grant

Budget and Appropriations Update

• Nearly 34.2 million FAFSA applications, 2012-13
• 71% of the total amount of federal student aid was Title IV Federal dollars
• 105% increase over 10 years of total amount of Title IV federal student aid
• $82.7 billion, 2002-03
• $169.7 billion 2012-13

• FAFSA on the Web (FOTW)
• Financial Aid Administrator (FAA) Access to Central Processing System (CPS) Online
• The paper FAFSA
• FAFSA on the Phone

School

Student

Files

FAFSA

Institutional Student Information Record (ISIR)

Student

State Agency

Institutional Student Information Record (ISIR)

Student Aid Report (SAR)

HEA Reauthorization

Campus-Based Programs

SOURCE: U.S. Department of Education, Federal Pell Grant Program End-of-year Report, 2011-12.

Federal Supplemental Educational Opportunity Grant Program (FSEOG)

• Senate Bills
• House Bills
• Major Themes
• Simplification
• Affordability
• Indebtedness
• Competency-Based Learning
• Transparency
• Predictions for movement?

• Loan discharged if borrower dies, becomes permanently or totally disabled, or manages to pass bankruptcy requirements
• Loan canceled for certain types of employment, volunteer activities, or military service

Budget and Appropriations Update Cont'd

Federal Appropriations in Current and Inflation-Adjusted Dollars (in Millions), 2002-03 to 2012-13

Source: The College Board, Trends in Student Aid, 2013.

• Annual appropriation is allocated among participating institutions
• Statutory formula
• Institutions must apply by Oct 1 (FISAP)
• School awards funds to eligible students based on program requirements
• School may draw cost allowance to offset costs of administering campus-based and Pell programs

CPS database

matches

conducted

Federal Appropriations for the FWS Program in Current and Inflation-Adjusted Dollars

(in Millions), 2002-03 to 2012-13

Source: The College Board, Trends in Student Aid, 2013.

Free Application for Federal Student Aid (FAFSA)

Financial Aid Administrator: Rich Heath, Director of Financial Aid & Veteran's Benefits at Anne Arundel Community College

• No interest accrues during deferment or 6-month post-deferment grace period
• Deferments
• In school and certain fellowships or rehab
• While in service eligible for loan cancellation
• While seeking but unable to find employment
• Economic hardship (including Peace Corps)
• Certain military service

Internal Revenue Service Data Retrieval Tool

FAFSA Filing Process

• Process enables students and parents to transfer tax return information from IRS website directly to FOTW application
• IRS Data Retrieval Tool also available for corrections
• Available February 2, 2014 for 2014-15 processing cycle

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+

Schools must award FWS employment "to the maximum extent practicable, that will complement and reinforce each recipient's educational program or career goals

• Free Application for Federal Student Aid (FAFSA) is the central element of the federal student aid application process
• FAFSA data is used to:

1) Compute the expected family contribution (EFC)

2) Confirm certain student eligibility criteria via database matches with federal agencies

Regular

(full data element)

• Need-based

CPS

Calculates

EFC

• Undergraduate Students

Dependent

Student

William D. Ford

- Prior to July 1, 2012, graduate/professional students

- COA minus other aid, up to applicable limit

• Interest accrues and is payable by borrower, but may be capitalized during periods of study or deferment

• Interest accrues but is paid by the federal government during periods of study or deferment

• Undergraduate, graduate, professional students
• Non-need-based

Direct Subsidized Loans

Direct Unsubsidized Loans

- COA minus EFC minus other aid, up to applicable limit

Parent's Contribution

One EFC short cut: Automatic Zero EFC (Auto Zero)

Two EFC formulas

• Applicable to dependent model and independent with dependents model
• AGI of parents (or independent student and spouse) was no greater than $24,000 (for 2014-15)
• Same tax filing criteria as for simplified

Student's Contribution

Independent

with dependents

other than a spouse

Three EFC models

Dependent Student's EFC

Umbrella for four loan programs:

Federal Work-Study Program (FWS)

Federal Perkins Loan Program

Independent

with no dependents

other than a spouse

- COA minus other aid, no limit

• Single
• Married, no children or other dependents

Aliases

• Federal Direct Stafford/Ford Loan Program
• Federal Direct Unsubsidized Stafford/Ford Loan Program
• Federal Direct PLUS Program
• Federal Direct Consolidation Loan Program

• Direct Loans
• Direct Subsidized Loans
• Direct Unsubsidized Loans
• Direct Stafford Loans
• Stafford Loans
• Subsidized Stafford Loans
• Unsubsidized Stafford Loans

Provides low-interest loans to financially needy students attending institutions of higher education to help them pay their educational costs.

• Interest accrues and is payable, but may be capitalized during periods of study or deferment.

• Campus-based program Revolving Fund
• Federal Capital Contribution (FCC)
• Institutional Capital Contribution (ICC):
• 1/3 of FCC
• Collections on previously made loans
• Reimbursements for loan cancellations
• Up to 25% of allocations (FCC) may be transferred to FSEOG and/or FWS

• Graduate, professional students
• Parents of dependent undergraduate students
• Non-need-based

Direct PLUS Loans

• Parental AGI (or earnings for non-filer) under $50,000
• Parents were not required to file 1040 long form, or family member received means-tested Federal benefit, or parent is a dislocated worker
• For independent student, apply tests to student and, if married, spouse

Simplified

(excludes assets)

William D. Ford Federal Direct Loan Program

Direct Loans

Final Step: School packages student

Source: The College Board, Trends in Student Aid, 2013.

Need Analysis Continued

Federal Student Loan Volume (Inflation-Adjusted Dollars, in Millions), 2002-03 to 2012-13

• Campus-based program
• School generally must match allocation with its own funds, 75% federal, 25% school
• Institutional share varies by nature of job or employer
• Some schools exempt from matching
• Match can also be "in-kind"

CPS sends info to student, school, and state

Need

Cost of Attendance (COA)

Definition of Need:

• Eligibility for non-need-based programs (Direct Unsubsidized and PLUS loans) does not consider EFC
• COA and EFC defined in Part F of the HEA, Title IV
• Professional Judgment
• ED may not regulate

FWS employers may be:

Expected Family Contribution (EFC)

• The school itself
• Limitations if the school is for-profit
• A Federal, State, or local public agency
• A private nonprofit organization
• A private for-profit organization
• Limitations

Direct Loan Summary

1 Grace period: period after borrower graduates, leaves, or falls below half-time status

2 Grace Period Interest Subsidy is temporarily eliminated on Direct Subsidized Loans during the six month grace period. This change is effective for new Direct Stafford Loans for which the first disbursement is made on or after July 1, 2012, and before July 1, 2014.

Loan limits: See the Student Aid Reference Sheet

Need Analysis

Cost of Attendance (COA)

• Earnings must be monitored to avoid exceeding award
• Student may be paid up to $300 over need
• This is basis for campus-based over-award tolerance when student gets unanticipated additional aid
• Additional flexibility:
• Carry forward (10% limit)
• Carry back (10% limit unless for summer)
• Transfer to FSEOG and/or Perkins (25% limit)

• Tuition and fees
• Books and supplies
• Room and board
• Transportation, miscellaneous personal expenses, personal computer
• Dependent care costs
• Costs related to disability
• Loan fees
• Etc.

Robert T. Stafford

• Independent students with dependents
• Independent students with no dependents

• Loan limits are listed on NASFAA's Student Aid Reference Sheet
• Interest rate: 5%
• Interest begins to accrue when repayment begins
• 9 months after borrower is no longer enrolled at least half-time
• Repayment period: 10 years

• Calculated as a dollar amount
• Often viewed more as a rationing device

Expected Family Contribution

(EFC)

• Deferments
• Forbearance

Repayment Features

• Consolidation

For 2014-15

Direct Loan Repayment Plans

• Standard
• Graduated
• Extended
• Income-Based (except parent PLUS)
• Income-Contingent (except parent PLUS)

• Discharge
• Forgiveness

• Maximum award is $5,730
• Minimum award is $587

School Packages Student

• Undergraduate, graduate, professional students
• Priority must be given to exceptionally needy students
• School defines "exceptionally needy"
• Willingness to repay

Higher Education Today

2014 National

Student Aid Profile

Quick Stats:

• Student Aid Index
• Today's News
• Policy White Papers

For the Policy Community

NASFAA TOOLS

Contact Information

• Justin Draeger: draegerj@nasfaa.org
• Megan McClean: mccleanm@nasfaa.org
• Jesse O'Connell: oconnellj@nasfaa.org
• Joan Berkes: berkesj@nasfaa.org
• Karen McCarthy: mccarthyk@nasfaa.org
• Charlotte Pollack: pollackc@nasfaa.org
• Blondeen Philemond: philemondb@nasfaa.org
• Richard Heath: rcheath@aacc.edu

For Members

• NASFAA University
• ASKRegs
• National Conference
• Code of Ethics & Code of Conduct
• Self-Evaluation Guides
• Policies and Procedures Tools
• Webinars
• Journal of Student Financial Aid

• www.NASFAA.org

NASFAA Statement of Ethical Principles

-Please see handout

2014 National Profile of Programs in Title IV of the Higher Education Act

For students, parents, and counselors information can found on the NASFAA website

Resources and Q&A

NASFAA Mission Statement: The National Association of Student Financial Aid Administrators supports the training, diversity, and professional development of financial aid administrators; advocates for public policies and programs that increase student access to and success in postsecondary education; and serves as a forum for communication and collaboration on student financial aid issues.

• 62% of total students are full-time
• 41% of total students are 18-24 years old
• 57% of total students are women
• More than 74% of Pell Grant recipients had a family income of less than $30,000 in 2011-12

History of Federal Government's Role in Student Aid

• Morrill Act of 1862
• Land Grants to fund state colleges

• "G.I. Bill" - Servicemen's Readjustment Act of 1944
• Educating and retraining returning servicemen

SOURCE: U.S. Department of Education, National Center for Education Statistics, Integrated Postsecondary Education Data System (IPEDS), Spring 2001 through Spring 2013.

SOURCE: U.S. Department of Education, National Center for Education Statistics, Integrated Postsecondary Education Data System (IPEDS), Fall 2000 through Fall 2012, Institutional Characteristics component.

History of Pell Grant Program

History of Campus-based Aid

• Higher Education Amendments of 1972
• Basic Educational Opportunity Grant

Program (BEOG) or Basic Grant

• 1980
• Renamed after Senator Claiborne Pell

• Federal Perkins Loan Program
• Sputnik, 1957
• National Defense Education Act of 1958
• Federal Work-Study Program (FWS)
• Economic Opportunity Act of 1964
• FSEOG Program
• Federal Supplemental Educational Opportunity Grant
• Higher Education Act (HEA) of 1965

created precursor program (Educational Opportunity Grant - EOG)

• HEA Amendments of 1972 replaced EOG with FSEOG

Senator Claiborne Pell

History of FFEL and DL

• FFEL (Federal Family Education Loan)
• Higher Education Act (HEA) of 1965
• PLUS (Parent Loans for Undergraduate Students
• Higher Education Amendments of 1980
• DL (Direct Loan)
• Higher Education Amendments of 1992