PRESENTATION TO THE CALIFORNIA STUDENT AID COMMISSIONERS

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PRESENTATION TO THE CALIFORNIA STUDENT AID
COMMISSIONERS

• California Association of Student Financial Aid
  Administrators (CASFAA)
• California Community College Financial Aid
  Administrators Association (CCCSFAAA)
• California Lenders for California (CLFE)

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History of Financial Aid

• Financial Aid began in the Private Sector
• Private Colleges Harvard College in the
  1600s. No Public Funds until much later.
• Federal Government
• 1944 GI Bill enacted by Congress to assist WWII
  Veterans returning from the war.

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• 1958. The Soviet launch of Sputnik gave Congress
  the occasion to justify a limited form of student
  assistance in the name of national security. The
  National Defense Education Act of 1958 provided
  low-interest loans for college students, with
  debt cancellation for those who became teachers
  after graduation. (NDSL to Perkins Loans)

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1965. The Kennedy legacy, the civil rights
movement, and the Johnson Administration's War on
Poverty converged in the mid-1960s. The 89th
Congress presided over the broadest sweep of
social legislation since the New Deal. Along with
breakthroughs in civil rights came large-scale
aid to education, including the Higher Education
Act . (Federal Student Aid Policy History and
an Assessment Lawrence E. Gladieux)
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• California
• 1955 Creation of the California State
  Scholarship Commission
• Cal Grant Program Fueled by the GI Bill
  benefits, the numbers of students in California
  pursuing post-secondary education exceeded
  available class room space at public
  universities. Rather than building more
  campuses, the state created a scholarship program
  with funding that students could use at private
  institutions institutions which had available
  classroom space.
• The Scholarships were portable meaning the
  students took them to the institution of their
  choice.

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Today California Student Aid Commission 2006
Cal Grant Tuition/fee amount at private
postsecondary institutions 9708 Cal Grant
Tuition/fee amount at University of
California 6141. Cal Grant Tuition/fee amount
at California State University 2520. Cal
Grant B access grant 1551 Cal Grant C Books
and supplies Tuition
3168
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History Of Need Analysis How to determine how
much to award a student

• 1954 The College Scholarship Service, founded
  by private colleges, developed a standard need
  analysis formula to award scholarship money.
• 1957 A national system of analysis was being
  used.
• 1974 A uniform need analysis was used to award
  private and government money.

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The Formula is used to determine how much a
family can be expected to contribute to their
students education

• CSAC used uniform need analysis to award Cal
  Grant funds.
• Today, CSAC uses the current need analysis, known
  as federal methodology (FM), to award to Cal
  Grant funds.

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What is included in the Formula?

• Income from all sources (past year year ahead)
• Parents employment status
• Number of Dependents
• Federal income taxes
• State income tax
• Included reported assets and indebtedness
• Assets

• Family Size
• Number of children in college
• How many parents working
• Age of the older parent

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Cost of Attendanceor The Student Budget

• COA is defined in HEA Sec. 472 where RULES are
  set by federal law and the actual BUDGETS are set
  by the colleges.
• Budgets must include tuition, fees, books,
  supplies, room and board, transportation,
  miscellaneous personal.
• May also include child care, disability related
  expenses, computer expenses.
• May be increased or decreased by the college for
  an individual student if justified and documented
  and in accord with federal regulations.

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CSAC assists budget determination in California

• Student Expense and Asset Survey (SEARS)
• Collects Students data every four years
• Based on data determines average expense for
  students
• Transportation
• Housing and Food
• Personal expenses
• Books and Supplies
• Many Colleges use some or all of these figures,
  relying on CSAC documentation to meet federal
  requirements to support their budget figures.

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The Financial Aid Process
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Goals of Financial Aid

• Institutions desire to
• Provide ACCESS and CHOICE.
• Conduct an accurate and fair assessment of the
  familys ability to pay for college.
• Promote equity by assuring funds go to the
  neediest students first.
• Promote efficiency by making the process work for
  all students.
• Be accountable for tax dollars and institutional
  funds.

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Financial Aid Process Outline

• Student requirements for obtaining financial aid
• Documents the student will receive (CAR, FAN),
  and from whom
• Significance of each document, and how they
  relate to one another

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The Initial Process Filing the FAFSA

• Each student must complete and file a FAFSA (Free
  Application For Federal Student Aid) annually
• Deadlines
• FAFSA
• CAL Grant
• Parent and student income requirements
• List of schools

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The Basic Formula

• This formula guides the college award process,
• Determines eligibility for every student,
• And is enacted and regulated by federal and state
  authorities while being implemented by the
  college
• Cost of Attendance
• Minus Expected Family Contribution
• Equals Need

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Cost of Attendanceor The Student Budget

• COA is defined in HEA Sec. 472 where RULES are
  set by federal law and the actual BUDGETS are set
  by the colleges.
• Budgets must include tuition, fees, books,
  supplies, room and board, transportation,
  miscellaneous personal.
• May also include child care, disability related
  expenses, computer expenses.
• May be increased or decreased by the college for
  an individual student if justified and documented
  and in accord with federal regulations.

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Expected Family Contribution

• The EFC is calculated by the federal processor
  from the data on the FAFSA.
• The formula is determined by federal law and
  adopted for California use by state law.
• It includes both the student and the parent(s)
  ability to pay for a 9-month time period.
• Is sent to the college electronically on an
  ISIR.
• The EFC may be adjusted at the campus level based
  on verified information or special student or
  parent circumstances.

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Determination of Eligibility

• The college determines the budgets (COA) and
  places the student in an appropriate cost
  category.
• The college receives an ISIR and verifies the
  students EFC.
• COA - EFC Cal Grant Eligibility (Need)
• The college now works to find funding sources to
  fill the eligibility in a process called
  packaging.
• See the sample of Determination of
  Eligibility on the next slide...

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How The Formula Works

• CC CSU UC Private
• Cost 15,000 18,000 20,000
  47,000
• EFC - 2,600 - 2,600 - 2,600
  - 2,600
• Need 12,400 15,400 17,400
  44,400
• In the best of all possible worlds, full need
  will be met with a financial aid package that is
  made up of grants and scholarships along with
  reasonable amounts of work and loan

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COA - EFC Federal Need
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CAL Grant GPA Verification

• This is a CAL Grant process requirement
• Filing date is November - March 2nd
• Student files individually
• Most High Schools and Institutions submit the GPA
  verification document electronically for all
  enrolled students

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The California Aid Report (CAR)

• The student receives a CAR directly from The
  California Student Aid Commission (CSAC) based on
  information provided on the FAFSA and GPA
  Verification.
• Identifies the CAL Grant (A, B, and C) for which
  the student is eligible

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The Financial Aid Notice (FAN)

• The student will receive a FAN directly from the
  campuses for which they have applied and have
  been accepted
• Provides the student with a complete financial
  aid award package
• Indicates what open requirements the student may
  have

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Financial Aid Notice (FAN) Details

• Cost of Attendance (COA)
• 9 month budget
• Expected Family Contribution (EFC)
• Awards being offered
• Federal (PELL Grant, SEOG, Loans, Work-Study)
• State (CAL Grant Estimates)
• Campus (Grants, Scholarships, Loans)
• Outside Aid (Independent Scholarships, Tuition
  Assistance, Fee Waivers)

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Sample UC Davis Financial Aid Notice (FAN)

• COA 20,256
• EFC - 0
• Need 20,256
• -Pell Grant - 4,050
• -Cal Grant A - 6,141
• Need 10,065
• Loan - 4,500
• Work - 4,000
• Need 1,565
• UC Grant - 1,565
• 0

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Financial Aid Notice - Open Requirements

• Verification Process
• Loan Documentation/Entrance Loan Counseling
• INS-Citizenship
• Selective Service
• Social Security Number

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Accountability

• The colleges are held accountable by many
  authorities
• USDE conducts thorough program reviews.
• Congress requires every college to contract for
  an annual review (with results submitted to
  USDE).
• The federal government conducts other
  miscellaneous reviews (INS, IRS, Inspector
  General, etc.).
• CSAC conducts grant audits.
• EdFund conducts loan reviews.
• USDE follows-up on consumer and student
  complaints.
• Proprietary Institution administrators have to be
  certified by the State of CA and fall under
  closer scrutiny than other segments.

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Summary of Delivery

• The college is the bottom line in the student aid
  process -- both for the students and for the
  government agencies.
• The college receives data, works individually
  with students, parents and families, verifies and
  documents the financial data and other
  eligibility features (citizenship, residency,
  etc.), determines eligibility, selects funds for
  the student aid package, determines unit load and
  eligible programs and determines continuing
  eligibility.

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Summary of Delivery - Continued

• Delivery systems (other than Cal Grant) differ
• For Pell Grant, colleges identify eligible
  recipients from among all applicants based on set
  EFC criteria.
• For FSEOG, FWS, Perkins Loan, and State Work
  Study colleges select recipients from among
  eligible students.
• For most loans, colleges provide access to
  capital.
• For segmental programs, colleges select
  recipients from among eligible students (when
  funds are limited) or identify recipients when
  funds are available to all eligible students.
• However, all of these programs have something in
  commonthe college names the recipients, not the
  federal or state government.

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WHO ARE WE?

• CASFAA
• CCCSFAAA
• CLFE

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CASFAA

• CASFAA is a non-partisan, non-profit professional
  organization with a membership of more than 1700
  California student financial aid administrators
  (and financial aid administrators from other
  states who can belong as Associate members).
  Representing more than 500 colleges and
  universities, its members share a common goal of
  improving access to and delivery of federal,
  state, institutional and private donor financial
  aid to students in the State of California.

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CASFAAMISSON STATEMENT

• It is our mission to provide training and
  professional development opportunities to the
  financial aid community and to advocate on behalf
  of the financial aid profession for student
  educational access and choice.

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CASFAAVision Statement

• CASFAA will
• Serve as a resource for all financial aid
  professionals in California.
• Provide members with opportunities to become
  actively involved in the activities of the
  Association.
• Prepare members to assume leadership roles in the
  student aid profession, the Association, and
  other financial aid associations.
• Serve as an authority in the State on student aid
  issues and be consulted regularly by Federal and
  State policy makers, the media, and other
  educational partners and
• Be proactive with regard to positions on State
  and national financial aid policy issues, and in
  protecting the interests and rights of California
  students for educational access and choice.

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CCCSFAAAMission Statement

• The California Community Colleges Student
  Financial Aid Administrators Association is
  founded on three fundamental principles that
  define the mission of the Association
• First, accessibility to higher education is
  essential to the development of human potential
  and the human condition and financial aid is an
  essential access vehicle to higher education and
• Second, that the effective administration of
  financial aid programs require accurate, current
  and focused information on federal and state
  legislation and regulations governing student
  financial aid programs and
• Third, communication between members of the
  profession, government agencies, and private and
  community organizations is critical to the
  development of effective financial aid programs
  and the advancement of the profession.

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CCCSFAA MISSION(continued)

• To achieve this mission, the Association will
• Provide training through regional meetings,
  workshops, statewide conferences and other
  related activities and services
• Keep the membership apprised of changing
  legislation, regulations and policies and
  procedures that will affect the administration of
  financial aid programs
• Monitor and respond to state and federal issues
  that will adversely affect the community college
  student population
• Advocate for adequate funding for student
  financial aid programs and accessibility to
  higher education
• Network with other governmental agencies,
  community organizations and associations to seek
  support on common issues and
• Work through the existing formal process to bring
  forward issues, to increase awareness and to seek
  support on issues that affect students.

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CLFEWHO WE ARE

• Formed in 1988 and incorporated as a
  non-profit mutual benefit corporation, The
  California Lenders for Education (CLFE) is an
  association represented by lenders, secondary
  markets, servicers and guaranty agencies.

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CLFE Mission

• To define common goals and engage in
  activities that improve and preserve the quality
  and integrity of education loan products and
  services delivered to students and schools in
  California through a diverse coalition of
  industry participants.

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CLFE Goals

• Committed to serving the needs of California
  students, parents and schools. partners in the
  delivery and administration of education loans.
  We promote responsible borrowing, default
  prevention/aversion and debt management. We
  believe that honest and fair competition in a
  regulated industry enhances product and service
  quality. We encourage and participate in the open
  exchange of ideas and information to maximize the
  synergy of our efforts. We support community
  outreach and develop and articulate legislative
  and regulatory positions.

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CLFE

• There are over 1900 lenders nationally
• The top 10 lenders originated over 52
• The top 25 lenders originated over 71.0
• The top 50 lenders originated over 82.9
• of the 2005 FFELP volume nationally