Financial Aid Update The Good, the Bad, the Ugly

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Financial Aid UpdateThe Good, the Bad, the Ugly

• Curt Gaume
• Director of Financial Aid
• Canisius College

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Topics for Discussion

• Federal Legislation
• Higher Education Reduction Act (HERA)
• FAFSA Update Review
• New York State Legislative Changes

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Federal Legislation

• The Higher Education Reduction Act of 2005

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Deficit Reduction Act

• New Grant Programs
• Academic Competitiveness
• Smart Grants
• Loan Issues
• New Loan Amount Limits
• New Interest Rate
• Other Loan Issues
• Need Analysis Issues
• Simple Need Analysis Test
• Automatic Zero EFC
• Income Asset Offsets

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New Grant Programs
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Academic Competitiveness Grant

• 1st 2nd Year Undergraduate Study
• 750 for 1st Year
• 1,300 for 2nd Year
• Criteria
• Pell Grant Eligible
• Enrolled Full Time
• Must be a U.S. Citizen
• Attend a High School whose programs have been
  deemed rigorous
  
• Maintain a 3.00 GPA (Annually)

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ACG Process

• Students who apply for aid on or after 7/1/06
• Online Applicants -- FAFSA on the Web will
  screen applicants for potential eligibility and
  give applicants option to provide ACG
  information
• Paper Applicants -- No change to paper 06-07
  FAFSA -- filers will be sent comment on SAR
  directing them to Web site or FSAIC
  
• SAR sent to students
• Central Processing System (CPS) notifies
  institutions of potential ACG eligibility on ISIR
  and in flat file

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ACG Process

• College must determine that the student meets all
  the eligibility requirements for payment.
  
• Pell Grant awarded paid
• U.S. Citizenship requirement meet
• Actually enrolled full-time
• Did the student meet rigorous high school
  criterial
  

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Rigorous H.S. Program

• Graduate from H.S. with an Advanced or Honors
  Diploma (i.e.. Regents with Honors)
  
• Minimum of two AP or IB courses with scores of 3
  for AP 4 for IB.
  
• Passing Grades in the following courses
• 4 Years of English
• 3 Years of Math (Algebra I and higher)
• 3 Years of Science (2 must be either Biology,
  Chemistry or Physics)
  
• 3 years of social studies
• 1 year of a foreign language

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Science Math Access to Retain Talent (SMART)
Grant

• 3rd 4th Year Undergraduates Study
• Award up to 4,000 annually
• Criteria
• Pell Grant Eligible
• Enrolled Full-Time
• U.S. Citizen
• Major in Science, Math, Engineering, specific
  Languages
  
• Must maintain a 3.00 GPA (per semester)

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SMART Grant

• Required Majors
• Life Sciences
• Mathematics
• Physical Sciences
• Engineering
• Computer Science
• Technology
• Specific Foreign Languages

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Major Issue with ACG SMART Grant

• Definition Academic Year vs. Award Year
• Historically all Federal Grant Programs are
  awarded on a Award Year Bases July 1st June
  30th
  
• ACG SMART Grant are awarded based on an
  Academic Year Basis
  
• Minimum definition is 24 credit hours
• Traditional definition is 30 credit hours

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Definition of Academic Year
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Student Loan Changes
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Student Loans Limits

• Increase 1st Year loans from 2,625 to 3,500.
• Increase 2nd Year loan limits from 3,500 t0
  4,500.
  
• No increase of loan limit for 3rd 4th year
  loans (5,500).
  
• The aggregate loan limit of 23,000 does not
  increase.

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Student Loan Interest Rates

• Interest rates will change from a variable rate
  to a fixed rate on loans made from 7/1/2006.
  
• Stafford Direct loans will have a fixed rate of
  6.8
  
• The variable rate this year is 5.3
• Parent Loans will have a fixed rate of 8.5
• The variable rate this year is 6.1

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Other Loan Issues

• Phase out the 3 Origination Fee.
• Authorize military deferments up to three years
  during war time national disasters.
  
• Fix consolidation loan rates
• Eliminate in-school spousal consolidations.

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Need Analysis Changes
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Need Analysis Changes

• Increase the Income Protection Allowance for
  dependent students from 2,200 to 3,000.
  
• For independent students increase the allowance
  against income from 5,000 to 6,050.
  
• Reduce the percentage of a dependent students
  assets from 35 to 20.

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Current Definition of SNT Auto Zero EFC

• What is Simple Needs Test?
• No Assets are attributed to the EFC
• If AGI is under 50,000
• If the family completed a short federal Tax
  return
  
• What is Auto Zero EFC?
• The EFC is automatically Zero
• If the family income is under 16,000

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Changes to SNT Auto Zero EFC

• SNT and Automatic Zero EFC
• Only parents type of tax return filed will be
  considered for dependent students
  
• Means-tested federal benefit program an
  alternative to tax return requirement
  
• Automatic Zero EFC Only
• Income threshold increased from 16,000 to 20,000

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FAFSA Update
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Application Processing Statistics

• For 2006-07
• 94 of applications filed electronically
• 6 of applications filed on paper FAFSA

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The 2007-08 Paper FAFSA

• 2007-08 FAFSA is yellow and purple
• New packaging
• Form pages numbered 1 through 4
• Notes pages 5 through 10
• Expanded instructions one page of Tips

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2007-08 FAFSA on the Web
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2007-08 PIN Web site
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Drug Offenses

• Both paper and online FAFSA drug offense wording
  updated
  
• Help text on FAFSA on the Web updated

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SNT and Auto Zero EFC Criteria

• New SNT/Auto Zero EFC criteria (tax return and
  Auto Zero income parameter) rolled forward into
  2007-08 CPS
  
• Means-tested benefits questions will be asked
  about base year 2006 on both 2007-08 paper and
  online FAFSAs
  

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Definition of Independent Students
Serving on active duty in the Armed Forces
Question 54
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The 2007-08 Paper FAFSA

• Four college and housing code choices
• Colleges re-numbered on paper FAFSA to 96a 96h
  
  
• Web continues to include six college and housing
  code choices
  

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2007-08 Renewal Application Process

• Renewal Reminders sent in early January 2007
  (instead of once in November and again in
  February)
  
• Students with a valid e-mail address will receive
  e-mail reminders
  
• If no e-mail address or e-mail is undeliverable,
  paper reminder letter will be sent to applicant
  

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State Legislation

• The 2006-2007 New York State Budget

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2006-2007 New York State BudgetTopics

• Two New Aid Programs
• Math Science Teaching Incentive Scholarship
• Part-Time TAP
• Ability to Benefit
• Change to Satisfactory Academic Chart

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Math Science TeachingIncentive Scholarship

• Purpose
• Increase the number of middle and secondary
  teachers in the fields of Math Science
  
• Conditions of the Scholarship
• Available for both bachelor masters degree
  levels
  
• Must enters into a contract with HESC to teach on
  a full-time basis for five years in math or
  science
  
• Failure to comply with terms of contract will
  have the value of the award converted to a
  student loan
  

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Math Science TeachingIncentive Scholarship
(Cont.)

• Number of Awards
• A Maximum of 500 awards annually
• Amounts
• Equal to SUNY Tuition Rate (4,350)
• Awards made after one successful completion of
  the academic year (1st payment made in
  2007-2008)
  
• Annual awards for 4 years of full-time
  undergraduate study and 1 year of full-time
  graduate study
  

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Part-Time TAP

• Requirements
• Student must be a Freshman in 2006-07
• Full-Time for two consecutive semesters
• Maintain a C average
• Hence, program will not start until 2007-2008
• Questions
• How is the award calculated?
• What is the Award amount?

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Part-Time TAP (Cont.)

• Part-Time TAP vs. Aid for Part Time Study (APTS)
• Part-Time TAP does not replace APTS
• APTS is fully funded at 14.6 million
• APTS is a campus based program whereas Part-Time
  TAP is an entitlement program.

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Ability to Benefit (ATB) Changes

• Students who do not have a high school diploma or
  GED must pass a federally approved ATB test in
  order to receive any state aid
  
• The State Education Department will provide
  guidance about the independent testing and
  evaluation process.
  

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Changes to SatisfactoryAcademic Progress Charts

• The State has legislated a
• uniform chart to determine a
• students satisfactory progress.
• Must be used by all institutions for first-time
  undergraduate students beginning with the
  2006-2007 academic year.