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.

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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  • 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. 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. 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. 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. 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. Components of Financial Aid Award Letters, cont. •  Cost of attendance (COA), cont. –  Health insurance/fees –  Transportation –  Personal 6 • www.nacacnet.org
  • 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. 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. 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. 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. 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. 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. 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. 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. 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. Components of Financial Aid Award Letters, cont. •  Federal non-need based loans –  Unsubsidized Stafford –  Parent PLUS –  Grad PLUS 16 • www.nacacnet.org
  • 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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