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Keep Scholarship Providers in the Game–and Off the Sidelines (Amy Glynn/CampusLogic)

Scholarships Support the ABCs of Student Finance

At CampusLogic, we focus on three guiding principles to help shape the future of student financial services. They are: Accessibility, borrowing, and cost. We call them “the ABCs of student finance.” It is our belief that every new regulation, initiative, or interpretation should take into account increasing accessibility to higher education, reducing student borrowing, and lowering the cost of higher education.

One way to achieve all three goals is by improving access to, and utilization of, external scholarships. So, last January, when we reviewed new guidance from the Privacy Technical Assistance Center (PTAC) on the subject of data sharing between financial aid offices and external scholarship organizations, we were quite concerned.

As college costs increase, the number of students who count on scholarships increases, too. With more than two-thirds of all college students borrowing money for school today, we believe the use of external, vetted scholarships is one of the best ways to reduce student debt and keep students in class.

A Disservice to Students, Schools, and Well-Meaning Scholarship Providers

The PTAC guidance states that financial aid offices are no longer allowed to share FAFSA/ISIR information with external scholarship organizations. Such data can only be used for application, award, or administration of aid awarded under Federal Student Aid programs, state aid programs, or aid awarded by eligible institutions. This guidance also impacts sharing data with tribal organizations that are trying to manage and award their scholarship and grant funds. Institutions are prohibited from sharing student information even if the student has signed a FERPA waiver requesting that a school release data on their behalf.

Such interpretation is having an impact that goes far beyond the intention of the PTAC, because the ability for external scholarship and grant organizations to allocate and disburse funds to students has now come to a standstill. As it is, the Institute for Higher Education Policy estimates that approximately $100 million in private scholarships goes unclaimed each year. It’s likely that this PTAC guidance is already leaving even more money on the table, because many scholarship providers awards are based on financial needs—which can’t be objectively determined without seeing FAFSA data.

It is for this reason that we are proud to endorse the National Scholarship Providers Association Letter to the U.S. Department of Education. We are certain there is a way to designate scholarship providers as trusted entities that are eligible to receive FAFSA data—and manage it responsibly—per existing statute.

Suggestions for Ending Scholarship Gridlock

In the meantime, we encourage schools to consider these ideas for sharing student information in a way that may alleviate the current scholarship gridlock:

  • Generate a form that a student can fill in with all information necessary for a scholarship organization to award and disburse funds. On the form, include a section where a financial aid officer can certify the accuracy of the student-reported information. Because the student is supplying the information, and the school official is merely certifying the accuracy of the information, the school is not releasing any confidential information to a third party.
  • Create a financial aid summary for students that can be generated upon request and delivered to the student. It should contain all relevant information students might need as part of their college funding journey. This summary could be delivered as a secured, sealed document that can’t be adjusted by the student. Make it available upon request by the student—or automatically delivered to all aid applicants. Doing so would enable students to understand their financial aid package and explore alternative funding options.

Financial Aid Simplification is No Replacement for Accountability (Amy Glynn/CampusLogic)

After watching the U.S. Senate Health, Education, Labor and Pensions (HELP) hearings on financial aid simplification and transparency on January 18, I find myself slightly hopeful—but even more concerned—about the fate and future of our system. The conversation started out on the right note when Sen. Alexander (R-Tennessee) spoke about the need to simplify the process and reduce red tape so financial aid professionals can spend more time working with, and advising, students.

But the most important thing that can be taken from the recent Higher Education Act Reauthorization hearing is that simplification should not be used in place of accountability. Instead, we should be using this opportunity to put structure and accountability standards in place for all organizations that touch the student financial services process.

Accountability: In College, Skipping Tests Earns an ‘F’

Is it preferable to reduce repayment options and loan forgiveness—just because the Department of Education is incapable, or unwilling, to hold loan servicers accountable for high-quality support to students? This doesn’t feel like an answer that would be acceptable in any other industry. So, why is this the go-to response for student loans?

At a time when default rates are on the rise for borrowers with some of the smallest loan balances, we need to be thinking not just about total loan debt but about what is considered a reasonable amount to have to repay, based on income. The recommendation to immediately move to an income-driven repayment process that would be auto-withdrawn from paychecks (like state and federal taxes) is another area of concern. So is the idea of a federal income-share agreement that, to date, has no long-range studies completed—even in the private sector.

That a program of this nature could be implemented without a pilot program, as was suggested, may be one of the most concerning statements I have ever heard. Overhauls like this, without the ability to forecast financial impacts on students and taxpayers, appears not to be a strength of our legislators—as has been proven with current income-based repayment programs and the recent health care reform act.

Eliminating Grants and Subsidized Loans Eliminate Students with High Financial Need

In an attempt to simplify the number of funding options and to increase transparency, the senate committee has suggested eliminating programs targeted at low-income students. If public service loan forgiveness, FSEOG grants, and subsidized student loans were eliminated—as suggested in the PROSPER Act—we would be damaging students further by eliminating programs that help reduce their cost of education.

The answer to creating more accessibility in higher education is not to limit funding to students who are least able to afford it. Instead, we should focus on controlling the cost of higher education and on ensuring that colleges and universities are not inappropriately inflating those costs—eliminating the ability for the neediest students to afford college.

Standards for Award Letters Is a Solid Step Toward Simplification

A great deal of discussion in the committee hearing centered around access to student loans, education about loan repayment, consequences of a one-loan program, and communication surrounding borrowing.

With regard to the latter, testimony from research recently conducted by uAspire & New America provided some very troubling insights. Inconsistent and confusing award notifications are regularly sent to students, with up to one-third of award letters missing necessary cost information, presenting inconsistent calculations of remaining cost, and using inconsistent terminology (e.g., “Federal Direct Unsubsidized Loan” was referenced in 143 unique ways). Additionally, two-thirds of award letters provided no clarification between grants and loans.

Sample award letters provided to the senate committee were confusing; lacked consistency in layout—and appeared to be samples that would not render well on mobile devices. We owe it to students and their families to ensure that award notices meet certain standards to enable informed and sustainable financial decisions about college. This is not to say that a template should be mandated through legislation. Instead, a standard glossary of terms and minimum requirements should be consistently defined. Institutions also should provide award letters to students in a format that can easily be displayed on mobile technology, since one-third of families living below the poverty line rely on mobile technology for internet access.

Solutions Are Needed—Starting with the Cost of College

As we look at increasing access to higher education, and reducing student borrowing, a key component in the simplification process should be about controlling the cost of higher education. That was a topic absent from the senators’ discussion, but will hopefully be on the docket in future sessions. It is impossible to increase college access and reduce student borrowing without managing the cost of education in the United States.

If we want to fix the higher education funding model, we need to make sure we’re curing the disease—rather than simply treating the symptoms.

Financial Aid Web Training Opportunities for November

Dear CCCSFAAA Members:

 

CASFAA is pleased to promote and share 19 different web based training sessions for financial aid administrators provided by our industry partners during the month of September.  Topics range from financial aid compliance and best practices, to helping students managing debt and repayment, to professional development and personal improvement.  These training and informational sessions are available to you free of charge.

 

For more detailed information on the sessions offered and the registration links, please refer to the attached PDF document.  You can also locate the information on the CCCSFAAA website under the training tab at www.cccsfaaa.org.

 

Sincerely,

 

Thalassa Naylor, Director of Business Development

thalassa.naylor@salliemaecom

Sallie Mae

$6 Billion in Improper, Title IV Financial Aid Program Payments (Amy Glynn/CampusLogic)

Whether the result of fraud or “honest mistakes,” knowing that $6 billion in improper or inaccurate payments were made within the Title IV financial aid programs is disturbing—to say the least. A former director of financial aid, recipient of Title IV aid, and advocate of higher education, I am specifically disheartened by the $2.2 billion in improper payments made through the Pell grant program during fiscal year 2016. All of this was discussed May 25, 2017 and you can find the details here.

A growing issue for the Department of Education and the institutions that administer the Federal Pell Grant program, improper payments have increased steadily from 1.5% in FY 15 to 7.8% in FY 16. That’s a 6.3% jump in one year, based on Chief Financial Officer for the U.S Department of Education Jay Hurt’s written testimony.

Inaccurate and/or unverified self-reported financial information on a student’s Free Application for Federal Student Aid (FAFSA) is a major culprit of improper payments. As we all know, the Department of Education identifies students most at-risk for reporting information in error, resulting in the subsequent selection for FAFSA verification. During verification, it is the institution’s responsibility to ensure that students and parents have accurately reported their financial information on the FAFSA.

Even with all of these checks and balances, something’s going wrong. Either the algorithm for selecting students for verification is flawed, or institutions are committing errors when completing the verification of student information.

The 6.3% increase shouldn’t have happened. We can and should verify 100% of Pell recipients—with fewer errors.

Think about the potential of eliminating the verification algorithm altogether, and requiring all Pell-eligible students to verify self-reported financial information. Many institutions may scoff at the idea, noting they are already stretched thin in a highly regulated industry. I spent five years working in or directing aid offices that verified 100% of Pell applicants—never incurring an audit finding for verification errors.

When a comprehensive approach is taken by an institution the increased volume actually allows financial aid professionals to specialize and perfect the verification process, reducing human error. Technology exists that reduces the administrative burden increasing the volume of verifications would include. This technology:

  •        Automates areas of the verification process that technology can perform faster: identification of confliction information, generation of ISIR correction files, file indexing and imaging, text follow-up
  •        Employs Optical Character Recognition, technology used by banking institutions, on tax transcripts to pre-populate self-reported income data during the verification and document review process.
  •        Ensures the IRS Data Retrieval Tool that allows students to transfer financial information from the IRS into the FAFSA relieving the need to verify financial data is functioning and secure.

We are at a precipice, both within higher education and in terms of the educational funding available to students. I completed college thanks to both the Pell and Stafford Loan programs, and the experience caused me to dedicate myself to making college accessible to all students. The Title IV funding programs are key to ensuring continued access to low income students. We must take action to ensure that improper payments within these programs are brought under control, and quickly.

Tension? What Tension? #JustKidding (Amy Gynn/CampusLogic)

At the 2017 NASFAA National Conference, Tyler Pruett, from Samuel Merritt University, was part of a panel discussing “Communication Planning and Execution: The Right Message at the Right Time.” The Director of Financial Aid and Campus Service Center, Pruett was funny, eloquent—and exceedingly truthful. Our social media team captured his humor, in a great way, with this tweet:

 

It hit home because it’s a tension that we all know exists—but don’t really talk about. And we should. The most difficult days I faced as a Director of Financial Aid included meetings with students who had found their home on my campus only to realize it was a home they couldn’t afford to fund. True collaborative partnerships between financial aid and admissions offices make for fewer of these types of difficult days—but it’s not an easy process.

Bridge The Tension Over Troubled Waters

The relationship between FinAid and other departments—admissions and enrollment, for example—isn’t always easy. Schools work diligently to align the different groups, with over 50% of financial aid teams reporting into enrollment management. Yet I often hear Simon & Garfunkel’s “Bridge Over Troubled Waters” playing in my head when people ask how well we all collaborate.

Our Common Goal: Student Success

In the best cases, a campus’ administrative groups work toward a common goal of enrolling students who are a good fit and well educated on all aspects of college—including cost and funding options. In the worst cases, competing goals and objectives can cause “minor civil wars,” where the casualties are students.

Here are a few suggestions for bridging the gap between enrollment and financial aid:

Assume positive intent.
Remember: No one is out to get you or make your life harder than it already is.  Assuming positive intent isn’t always easy, but it is integral to strong cross-departmental relationships. Both groups have the same goal in mind: To enroll, educate, retain, and graduate students who are ready to embrace the next challenge in life—a career. Take time to educate yourself on the inner workings of admissions and enrollment management.

 

Focus on the big picture.
The end goal can easily be lost if short-term, siloed goals and objectives take the spotlight. Keep the bigger picture in mind. Both the admissions and financial aid offices play an important role in the university’s ability to enroll, educate, retain, and graduate students. Remember this is a symbiotic relationship; not parasitic.

 

Stop pointing fingers.
Working in the trenches can result in a significant amount of finger-pointing when something goes wrong. Finger-pointing doesn’t help anyone; solutions do. I cannot tell you how many times I’ve heard things like, “They don’t send us students who can afford our tuition,” or, “Why doesn’t financial aid do more?” These questions don’t help anyone—especially students.

 

Leverage each other’s strengths.
Even on the most difficult of days, remember that you are actually on the same team. Joining forces makes it easier to overcome the obstacles that your students are facing. If students aren’t admitted to the institution, there is no one for financial aid to package—and no graduates to enter new careers. Admissions teams already have built a strong relationship with prospective students; they are familiar with how and when students like to receive information. Work collaboratively to ensure that admissions communications have quality information and resources on college cost, financial aid, and return on educational investment.

 

Be flexible.
There are many areas where FinAid communications can support and expand enrollment messaging and tone. Make your award letter a tool to drive enrollment while educating students on cost and funding options. Have you considered including video content in the award letter? Rivier University in NH offers a digital award letter—and for the first time, contains a video aerial tour of the campus.

 

Educate yourself and others.
We often fear things we don’t understand. By better understanding other functional areas on campus, like admissions and enrollment management, things will feel a lot more familiar. You can help other departments understand financial aid, too, by offering to train and educate them. Stay at a high level and do not get lost in the details that can be overwhelming. As hard as it is to imagine, not everybody gets excited by R2T4 and awarding philosophies. I know, strange, right??

Student success takes a village. And that village has to include financial aid, admissions, and enrollment voices. Small steps can pay huge dividends for students. The sooner we take those steps, the better for everyone.