Welcome to
Understanding Financial Aid
Awards and Communicating
 with Financial Aid Offices
          Presented by the
   ...
Today’s Agenda
•  Financial aid award letters
•  Comparing financial aid award letters among
   schools
•  Prospects for s...
Today’s Presenters
•  Cedrick Andrews, Policy Associate,
   The Institute for College Access and
   Success (TICAS)
•  You...
Today’s Presenters, cont.
•  Barbara Hall, Senior Consultant, Murray &
   Associates and the National Center for
   Colleg...
Components of Financial Aid
        Award Letters
•  Award letters are not standardized, so
   not all will contain each o...
Components of Financial Aid
      Award Letters, cont.
•  Cost of attendance (COA), cont.
  –  Health insurance/fees
  –  ...
Components of Financial Aid
      Award Letters, cont.
•  Cost of attendance (COA), cont.
  –  May also include:
     •   ...
Components of Financial Aid
      Award Letters, cont.
•  Take-away: Chapter on “Cost of
   Attendance (Budget) in the 200...
Components of Financial Aid
      Award Letters, cont.
•  Possible issues with cost of attendance
  –  Definitions of comp...
Components of Financial Aid
       Award Letters, cont.
•  Expected family contribution (EFC)
  –  Derived from informatio...
Components of Financial Aid
      Award Letters, cont.
•  Expected family contribution (EFC),
   cont.
  –  May be increas...
Components of Financial Aid
       Award Letters, cont.
•  Financial aid
  –  Gift aid
  –  Self help aid
     •  Need-bas...
Components of Financial Aid
       Award Letters, cont.
•  Gift aid
   –  Grants and scholarships
   –  May come from fede...
Components of Financial Aid
       Award Letters, cont.
•  Gift aid, cont.
   –  Does not have to be repaid as long as
   ...
Components of Financial Aid
      Award Letters, cont.
•  Federal need-based loans
  –  Perkins
  –  Subsidized Stafford
•...
Components of Financial Aid
       Award Letters, cont.
•  Federal non-need based loans
  –  Unsubsidized Stafford
  –  Pa...
Components of Financial Aid
       Award Letters, cont.
•  Federal non-need based loans, cont.
  –  Higher interest rates
...
Components of Financial Aid
       Award Letters, cont.
•  New repayment options are becoming
   available for most federa...
Components of Financial Aid
       Award Letters, cont.
•  Take-away: Income-based repayment
   and public service loan fo...
Components of Financial Aid
       Award Letters, cont.
•  Work-study employment
  –  Must be willing to work during
     ...
Components of Financial Aid
       Award Letters, cont.
•  Take-away: The financial aid chapter in
   NACAC’s Guide to the...
Components of Financial Aid
       Award Letters, cont.
•  Take-away: The National Association of
   Student Financial Aid...
Components of Financial Aid
       Award Letters, cont.
•  Private Loans
  –  Not really financial aid but a financing too...
Components of Financial Aid
      Award Letters, cont.
•  Private Loans, cont.
  –  Only used as a last resort after other...
Components of Financial Aid
      Award Letters, cont.
•  Take-away: The Institute for College
   Access and Success, Proj...
Components of Financial Aid
      Award Letters, cont.
•  Unmet need or “gapping”
  –  May need to find alternative financ...
Comparing Financial Aid Award
     Letters Among Schools
•  Why aid packages differ from institution
   to institution
  –...
Comparing Financial Aid Award
   Letters Among Schools, cont.
•  Why aid packages differ from institution
   to institutio...
Comparing Financial Aid Award
   Letters Among Schools, cont.
•  May be useful to subtract gift aid
   from cost of attend...
Comparing Financial Aid Award
   Letters Among Schools, cont.
•  Loan terms
  –  May not be stated on award letter
•  Amou...
Comparing Financial Aid Award
   Letters Among Schools, cont.
•  Future aid packages
  –  Renewability
  –  Changes in pro...
Comparing Financial Aid Award
   Letters Among Schools, cont.
•  Ideal (for student) treatment of outside
   scholarships
...
Comparing Financial Aid Award
   Letters Among Schools, cont.
•  Take-away: NACAC’s “Student
   Bulletin: Understanding Yo...
Comparing Financial Aid Award
   Letters Among Schools, cont.
•  Non-financial considerations to bear
   in mind
  –  Scho...
Prospects for Standardization of
    Financial Aid Award Letters
•  Steps Congress and the U.S.
   Department of Education...
Prospects for Standardization of
 Financial Aid Award Letters, cont.
•  Steps institutions could take now, cont.
  –  Incl...
Prospects for Standardization of
 Financial Aid Award Letters, cont.
•  Steps institutions could take now, cont.
  –  Enco...
Prospects for Standardization of
 Financial Aid Award Letters, cont.
•  Take-away: Mark Kantrowitz’s editorial
   on stand...
Communicating with Financial
          Aid Offices
•  Responsibilities of the aid office
  –  Counseling
  –  Need analysi...
Communicating with Financial
       Aid Offices, cont.
•  What financial aid administrators do
  –  Helping professionals ...
Communicating with Financial
       Aid Offices, cont.
•  Electronic communication
  –  Email is good for routine correspo...
Communicating with Financial
       Aid Offices, cont.
•  Written communication
  –  On-the-record (as is email)
  –  When...
Communicating with Financial
       Aid Offices, cont.
•  Proactive strategies
  –  Inform the aid office of outside award...
Communicating with Financial
       Aid Offices, cont.
•  The appeals process
  –  Appealing vs. negotiating awards
    • ...
Communicating with Financial
       Aid Offices, cont.
•  Appeals and professional judgment
  –  Professional judgment is ...
Communicating with Financial
       Aid Offices, cont.
•  Professional judgment, cont.
  –  Often requires third-party doc...
Communicating with Financial
       Aid Offices, cont.
•  A final word on appeals
  –  Aid office workloads have increased...
Communicating with Financial
       Aid Offices, cont.
•  Take-away: Recent guidance on
   professional judgment from the ...
Counseling Considerations in the
    Current Economic Climate
•  Practically speaking, there is nothing
   going on that c...
Counseling Considerations in the
 Current Economic Climate, cont.
•  Counselors can help families manage
   expectations
 ...
Counseling Considerations in the
  Current Economic Climate, cont.
•  On an emotional level, counseling is
   much more ch...
Counseling Considerations in the
  Current Economic Climate, cont.
•  On an emotional level, counseling is
   much more ch...
Counseling Considerations in the
 Current Economic Climate, cont.
•  Take-away: NACAC’s “Statement of
   Principles of Goo...
Q&A
•  Continue to submit questions via e-mail
•  We will select those questions with the
   broadest applicability
•  An ...
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Understanding Financial Aid Awards and Communicating with Financial Aid Offices

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A primer for guidance counselors and other college access providers on helping students and parents understand their financial aid award letters and communicate effectively with financial aid offices.

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Understanding Financial Aid Awards and Communicating with Financial Aid Offices

  1. 1. Welcome to Understanding Financial Aid Awards and Communicating with Financial Aid Offices Presented by the National Association for College Admission Counseling Wednesday, April 15, 2009 1 • www.nacacnet.org
  2. 2. Today’s Agenda •  Financial aid award letters •  Comparing financial aid award letters among schools •  Prospects for standardization of award letters •  Communicating with financial aid offices •  Counseling considerations in the current economic climate 2 • www.nacacnet.org
  3. 3. Today’s Presenters •  Cedrick Andrews, Policy Associate, The Institute for College Access and Success (TICAS) •  Youlonda Copeland-Morgan, Associate Vice President for Enrollment Management and Director of Scholarships and Student Aid, Syracuse University 3 • www.nacacnet.org
  4. 4. Today’s Presenters, cont. •  Barbara Hall, Senior Consultant, Murray & Associates and the National Center for College Costs, and former Guidance Director and College Counselor at Bishop Dwenger High School, Fort Wayne, IN •  Tim Christensen, Specialist on College Access and Success (moderator) 4 • www.nacacnet.org
  5. 5. Components of Financial Aid Award Letters •  Award letters are not standardized, so not all will contain each of these components •  Cost of attendance (COA) –  Tuition and fees –  Room and board –  Books and supplies 5 • www.nacacnet.org
  6. 6. Components of Financial Aid Award Letters, cont. •  Cost of attendance (COA), cont. –  Health insurance/fees –  Transportation –  Personal 6 • www.nacacnet.org
  7. 7. Components of Financial Aid Award Letters, cont. •  Cost of attendance (COA), cont. –  May also include: •  Dependent care •  Study abroad expenses •  Disability expenses •  Employment expenses for co-op study •  Loan fees 7 • www.nacacnet.org
  8. 8. Components of Financial Aid Award Letters, cont. •  Take-away: Chapter on “Cost of Attendance (Budget) in the 2008-2009 Federal Student Aid Handbook at http://ifap.ed.gov/sfahandbooks/ attachments/ 0809FSAHbkVol3Ch2Oct14.pdf 8 • www.nacacnet.org
  9. 9. Components of Financial Aid Award Letters, cont. •  Possible issues with cost of attendance –  Definitions of components not standardized –  Cost categories not standardized –  May not include all costs –  May not be based on actual costs or may not be most recent data 9 • www.nacacnet.org
  10. 10. Components of Financial Aid Award Letters, cont. •  Expected family contribution (EFC) –  Derived from information reported on Free Application for Federal Student Aid –  Generally consistent from school to school 10 • www.nacacnet.org
  11. 11. Components of Financial Aid Award Letters, cont. •  Expected family contribution (EFC), cont. –  May be increased by CSS Profile at some schools –  EFC may not be the total family contribution •  Loans and work-study earnings are also a contribution from the family 11 • www.nacacnet.org
  12. 12. Components of Financial Aid Award Letters, cont. •  Financial aid –  Gift aid –  Self help aid •  Need-based and non-need based federal loans •  Work-study employment •  Private (non-need-based) loans 12 • www.nacacnet.org
  13. 13. Components of Financial Aid Award Letters, cont. •  Gift aid –  Grants and scholarships –  May come from federal, state, or institutional sources –  May be need-based or merit-based 13 • www.nacacnet.org
  14. 14. Components of Financial Aid Award Letters, cont. •  Gift aid, cont. –  Does not have to be repaid as long as recipient meets requirements –  May or may not be renewable 14 • www.nacacnet.org
  15. 15. Components of Financial Aid Award Letters, cont. •  Federal need-based loans –  Perkins –  Subsidized Stafford •  Features of need-based loans –  Low interest rates –  Delayed repayment –  In-school interest subsidy 15 • www.nacacnet.org
  16. 16. Components of Financial Aid Award Letters, cont. •  Federal non-need based loans –  Unsubsidized Stafford –  Parent PLUS –  Grad PLUS 16 • www.nacacnet.org
  17. 17. Components of Financial Aid Award Letters, cont. •  Federal non-need based loans, cont. –  Higher interest rates •  6.8 percent fixed rate for unsubsidized Stafford –  Interest accrues during school and deferments –  Payments on PLUS loans are due while the student is in school 17 • www.nacacnet.org
  18. 18. Components of Financial Aid Award Letters, cont. •  New repayment options are becoming available for most federal student loans –  Income-based repayment –  Public service loan forgiveness 18 • www.nacacnet.org
  19. 19. Components of Financial Aid Award Letters, cont. •  Take-away: Income-based repayment and public service loan forgiveness site at www.IBRinfo.org 19 • www.nacacnet.org
  20. 20. Components of Financial Aid Award Letters, cont. •  Work-study employment –  Must be willing to work during academic year –  Provides work experience –  Research shows 10-15 hours/week may have academic benefit –  May reduce loan burden 20 • www.nacacnet.org
  21. 21. Components of Financial Aid Award Letters, cont. •  Take-away: The financial aid chapter in NACAC’s Guide to the College Admission Process at http://www.nacacnet.org /PublicationsResources/Marketplace/Pages /AdmissionGuide.aspx 21 • www.nacacnet.org
  22. 22. Components of Financial Aid Award Letters, cont. •  Take-away: The National Association of Student Financial Aid Administrators’ “Student Aid Program Summary,” accessible from http://www.nasfaa.org/redesign/fanight.asp 22 • www.nacacnet.org
  23. 23. Components of Financial Aid Award Letters, cont. •  Private Loans –  Not really financial aid but a financing tool like a home equity loan or credit card –  Less available due to credit crunch 23 • www.nacacnet.org
  24. 24. Components of Financial Aid Award Letters, cont. •  Private Loans, cont. –  Only used as a last resort after other financial aid options –  Should have co-signer and be school certified for best interest rates and terms 24 • www.nacacnet.org
  25. 25. Components of Financial Aid Award Letters, cont. •  Take-away: The Institute for College Access and Success, Project on Student Debt’s “Questions to ask about private loans” at http://projectonstudentdebt.org/ private_loan_questions.vp.html 25 • www.nacacnet.org
  26. 26. Components of Financial Aid Award Letters, cont. •  Unmet need or “gapping” –  May need to find alternative financing, such as a private or home-equity loan •  Always give federal loans priority over private loans and credit card debt –  May be able to reduce expenses instead of taking on private debt 26 • www.nacacnet.org
  27. 27. Comparing Financial Aid Award Letters Among Schools •  Why aid packages differ from institution to institution –  Cost of attendance •  Both categories and amounts may vary –  EFC •  May differ if institution is a CSS Profile user 27 • www.nacacnet.org
  28. 28. Comparing Financial Aid Award Letters Among Schools, cont. •  Why aid packages differ from institution to institution, cont. –  Fund availability –  Institutional awarding policies 28 • www.nacacnet.org
  29. 29. Comparing Financial Aid Award Letters Among Schools, cont. •  May be useful to subtract gift aid from cost of attendance –  Difference may be met by a combination of self-help aid (loans and work) and EFC •  May be useful to aggregate grants vs. work-study vs. loans 29 • www.nacacnet.org
  30. 30. Comparing Financial Aid Award Letters Among Schools, cont. •  Loan terms –  May not be stated on award letter •  Amount of unmet need or “gap” 30 • www.nacacnet.org
  31. 31. Comparing Financial Aid Award Letters Among Schools, cont. •  Future aid packages –  Renewability –  Changes in proportion of grant vs. loan in subsequent years –  Probably not stated on award letter 31 • www.nacacnet.org
  32. 32. Comparing Financial Aid Award Letters Among Schools, cont. •  Ideal (for student) treatment of outside scholarships –  First—meeting unmet need –  Then—reducing self help –  As a last resort—reducing grant (but never Pell Grant) 32 • www.nacacnet.org
  33. 33. Comparing Financial Aid Award Letters Among Schools, cont. •  Take-away: NACAC’s “Student Bulletin: Understanding Your Financial Aid Award Letter” at http://www.nacacnet.org/ PublicationsResources/Marketplace/ Documents/LateHS.pdf 33 • www.nacacnet.org
  34. 34. Comparing Financial Aid Award Letters Among Schools, cont. •  Non-financial considerations to bear in mind –  School’s academic programs –  School type and size –  School’s culture and demographics –  The best aid package may not be the best school choice overall 34 • www.nacacnet.org
  35. 35. Prospects for Standardization of Financial Aid Award Letters •  Steps Congress and the U.S. Department of Education are pursuing •  Steps institutions could take now –  Prominently display most important and useful information –  Include straightforward instructions and helpful resources 35 • www.nacacnet.org
  36. 36. Prospects for Standardization of Financial Aid Award Letters, cont. •  Steps institutions could take now, cont. –  Include complete estimate of COA –  Clearly distinguish gift aid from self help and provide bottom line cost –  Avoid jargon, acronyms and unexplained terms 36 • www.nacacnet.org
  37. 37. Prospects for Standardization of Financial Aid Award Letters, cont. •  Steps institutions could take now, cont. –  Encourage wise borrowing by disclosing loan terms and conditions –  Distinguish between costs the school will bill the student for and those the student will have to pay on his/her own 37 • www.nacacnet.org
  38. 38. Prospects for Standardization of Financial Aid Award Letters, cont. •  Take-away: Mark Kantrowitz’s editorial on standardization of award letters in Inside Higher Ed at http://www.insidehighered.com/views/ 2007/06/22/kantrowitz 38 • www.nacacnet.org
  39. 39. Communicating with Financial Aid Offices •  Responsibilities of the aid office –  Counseling –  Need analysis –  Awarding –  Monitoring –  May also have job placement and veterans affairs responsibilities 39 • www.nacacnet.org
  40. 40. Communicating with Financial Aid Offices, cont. •  What financial aid administrators do –  Helping professionals and experts on student financing –  Multiple constituencies to serve –  Stewardship of taxpayer and institutional dollars –  Compliance with multiple agencies’ rules 40 • www.nacacnet.org
  41. 41. Communicating with Financial Aid Offices, cont. •  Electronic communication –  Email is good for routine correspondence –  Do not encourage sending confidential information via email, but it’s done •  Telephone –  Better for confidential conversation and persuasion, but write instead if it’s hard to get through 41 • www.nacacnet.org
  42. 42. Communicating with Financial Aid Offices, cont. •  Written communication –  On-the-record (as is email) –  When documentation is desired or required •  When a visit is desirable or necessary –  May wish to cultivate a relationship if circumstances are complex –  May be required if other communications vehicles are not effective 42 • www.nacacnet.org
  43. 43. Communicating with Financial Aid Offices, cont. •  Proactive strategies –  Inform the aid office of outside awards as soon as they are known –  Inform the aid office of any changes in the family’s circumstances as soon as they occur 43 • www.nacacnet.org
  44. 44. Communicating with Financial Aid Offices, cont. •  The appeals process –  Appealing vs. negotiating awards •  Most institutions will not negotiate, but some will—so ask away •  Preparing for an appeal and presenting the case –  Documentation –  Be sincere and polite, not angry 44 • www.nacacnet.org
  45. 45. Communicating with Financial Aid Offices, cont. •  Appeals and professional judgment –  Professional judgment is authority to adjust EFC due to exceptional circumstances •  Unemployment or reduced employment •  Student’s decision to leave workforce or reduce hours to return to school (adult student) •  Costly medical situations •  Home foreclosure •  Other 45 • www.nacacnet.org
  46. 46. Communicating with Financial Aid Offices, cont. •  Professional judgment, cont. –  Often requires third-party documentation –  Professional judgment is subject to certain statutory limitations •  Special circumstances that distinguish one student from a class of students •  No automatic categories of professional judgment 46 • www.nacacnet.org
  47. 47. Communicating with Financial Aid Offices, cont. •  A final word on appeals –  Aid office workloads have increased; staffing has not –  Expect longer turnaround times on appeals 47 • www.nacacnet.org
  48. 48. Communicating with Financial Aid Offices, cont. •  Take-away: Recent guidance on professional judgment from the U.S. Department of Education at http://www.ifap.ed.gov/dpcletters/ GEN0904.html 48 • www.nacacnet.org
  49. 49. Counseling Considerations in the Current Economic Climate •  Practically speaking, there is nothing going on that can’t be dealt with –  Eligibility may increase, particularly for Pell Grants –  Students may become eligible for subsidized federal loans 49 • www.nacacnet.org
  50. 50. Counseling Considerations in the Current Economic Climate, cont. •  Counselors can help families manage expectations –  Institutional funds may be exhausted –  All awards have a ceiling, either by rule or policy –  There isn’t enough money in the world to provide a safety net for all 50 • www.nacacnet.org
  51. 51. Counseling Considerations in the Current Economic Climate, cont. •  On an emotional level, counseling is much more challenging –  Family circumstances may be dire –  Be prepared to refer families to appropriate financial and social services agencies and help them access services 51 • www.nacacnet.org
  52. 52. Counseling Considerations in the Current Economic Climate, cont. •  On an emotional level, counseling is much more challenging –  Be sympathetic, but also maintain appropriate emotional detachment –  Review and adhere to NACAC’s “Statement of Principles of Good Practice” 52 • www.nacacnet.org
  53. 53. Counseling Considerations in the Current Economic Climate, cont. •  Take-away: NACAC’s “Statement of Principles of Good Practice” at http://www.nacacnet.org/AboutNACAC/ Policies/Documents/SPGP.pdf 53 • www.nacacnet.org
  54. 54. Q&A •  Continue to submit questions via e-mail •  We will select those questions with the broadest applicability •  An archive of today’s Webinar will be posted on the NACAC Web site approximately one week from today •  Thank you for participating in “Understanding Financial Aid Awards and Communicating with Financial Aid Offices”! 54 • www.nacacnet.org
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