$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.

Helping Students Fund College (David Wuthrich/Student Connections)

Students want to get a college degree but they are not confident they’ll be able to afford getting all the way through. The Ruffalo Noel Levitz 2016 Motivation to Complete College Report found that more than 50 percent of first-year students want to talk with someone about getting scholarships and guidance in getting a job during the academic year and summer. Interestingly, only 28 percent want to talk about getting a loan – an unrealistic point of view given the cost of education at most institutions and the limited grant and scholarship aid that may be available to individual students.

 

Here are some questions to ask yourself as you evaluate your institution’s process for assisting students with their college funding:

 

Are you helping applicants complete the Free Application for Federal Student Aid (FAFSA)?

FAFSA completion has been getting a lot of attention lately as institutions and organizations are looking at closing the opportunity gap for students with limited means. Nationally, only about 40 percent of high school seniors complete the FAFSA versus the 66 percent who go to college.  The 2016 Ahead of the Herd FAFSAA Completion Report provides information for each state’s FAFSA completion rate. Rates range from a low of 18.6 percent for Utah to a high of 62.3 percent for Tennessee. In addition, the National College Access Network (NCAN) reports on FAFSA completion rates for 68 U.S. cities for the high school class of 2015. The average for all 68 cities is 48 percent. Despite the efforts underway such as high school nights and College Goal Sunday events, families need additional assistance in completing their financial aid applications.

 

A recent article in Education Week reports that Where Students Need Financial Aid the Most, Fewer Apply. In the first national study to examine the correlation between a school district’s wealth and its FAFSA application rate, the poorer the school district, the less likely students are to fill out the FAFSA. While some states are exceptions, generally, each 10-percentage-point increase in a district’s poverty rate tends to be accompanied by a three-percentage-point decline in its FAFSA completion rate. This particular report suggests that states not only focus attention on improving the rates, but they should also consider focusing particular effort in high-poverty school districts.

 

Are you tracking FAFSA completion for continuing students?

As I’ve travelled around the country talking about this issue, I always ask if anyone is tracking FAFSAA completion rates for continuing students at their institutions. Most of the time, the response is “no.” In Here Today, Gone Tomorrow? Investigating Rates and Patterns of Financial Aid Renewal Among College Freshmen, the authors found that approximately three-fourths of students refile a FAFSA for the following year, while one-quarter do not refile. Further, Pell Grant recipients are more likely to refile (83.3%) and Pell Grant recipients who earn a 3.0 or higher GPA their freshman year refile at 84.5%.

 

What can you do to help students complete the FAFSA?

In Financial Aid Mindsets among Low Income Students from October of 2016, NCAN reports that undeserved students are greatly misinformed or completely uninformed as it relates to financial aid for postsecondary education. Despite all the information available about financial aid, it’s not getting to the students who need it most.

 

The report recommends that institutions provide one-on-one assistance in completing financial aid applications, facilitating the online completion of the FAFSA and requiring students to meet with financial aid staff. These activities can help drive up FAFSA completion rates for both incoming and returning students.

Should Financial Literacy be a Financial Aid Office initiative? (David Wuthrich/Student Connections)

Whenever I’m working with faculty and administrators on student success plans, as soon as I bring up financial literacy, everyone turns to the financial aid office for ownership, development and delivery. There are many reasons why. Often, we assume that financial literacy efforts are related to default prevention or that only students receiving financial aid need money management education. I would argue that financial literacy efforts need to be a campus-wide initiative and would be better served with their own structure or owned by a cross-functional task force.

 

Here are some reasons why:

  • In July 2016, Fortune Magazine reported results from the National Capability Study that found nearly two-thirds of Americans can’t pass a basic test of financial literacy. This includes information on how to calculate interest payments and basic questions about financial risk. Given this data, you want to make sure that your money management education efforts are available to all students. In fact, you might even want to make sure that financial literacy education is available to all members of the campus community.
  • COHEAO’s Financial Literacy Awareness White Paper, March 2014, states that “Financial Literacy programs do not necessarily fit exclusively within the mission of any single department or division.” The authors suggest that a wide net of potential stakeholders and advocates will enhance the probability of launching and sustaining a program. Representatives from offices such as academic deans and advisors; bursars; career services; enrollment management; admissions and first-year experience; alumni relations and development; and financial aid have similar interests in ensuring students develop money management skills. Other departments, such as the library, information technology and institutional research, may be helpful in providing resources and helping to track participation and outcomes. And don’t forget to include students in your planning efforts!
  • Anecdotally, higher education administrators repeatedly tell me that information delivered in the classroom carries more weight with students than information from workshops or administration-led efforts. It makes sense that faculty are better equipped to bring innovative pedagogical methods to bear on financial literacy topics. Perhaps students take it more seriously if money management education is part of their coursework. Maybe it is related to the ability to apply theoretical concepts to real life situations. Do you find this to be true on your campus?

So, while financial aid administrators must be key players in developing and delivering money management education, the odds for a successful effort are greater when that education is developed and delivered by a campus-wide coalition of faculty and administrators. Each brings a unique perspective to the effort and creates multiple opportunities to provide students and community members with information that will help them be successful in school and in life.

Credits Up With 15 to Finish (From Inside Higher ED/Ashley A. Smith)

 

A new analysis examining the effects of Indiana’s 15 to Finish initiative finds the greater the financial incentive, the more likely students will take on a full-time course load — and with little to no negative impact.

The report examines the effects of the Indiana Legislature’s 2013 decision to increase the number of courses students needed to complete each year in order to be eligible to renew their state financial aid award. Students are now required to take at least 30 credits a year — or 15 a semester — to maintain aid. The move was made in an effort to cut down on students’ time to graduation. Some experts say students assume taking 12 credits per semester is enough for them to earn a degree in two years for an associate degree or four years for a bachelor’s degree.

The analysis from Postsecondary Analytics — a research consulting firm — found that the change in financial aid policy led to a 5.2 percent average growth rate in the likelihood of students earning 30 credits or more in a year. For students who received Indiana’s highest financial aid award, the average growth rate in the likelihood of earning 30 or more credits in a year increased 10.1 percent.

Despite concerns, the analysis also found that the policy change did not lead to a significant decline in completion rates, fall-to-spring retention rates, or in fall grade point average. There was a small decline, however, in 18- and 19-year-old recipients of Indiana’s smallest financial award.

“The financial aid policy is effective for increasing credit-hour completion,” said Takeshi Yanagiura, a doctoral student in economics and education at Teachers College, Columbia University, who co-authored the report. “We find little evidence on potential negative side effects due to the policy.”

Besides GPA remaining the same, the analysis found that there was no difference between whether students were at a two-year or four-year institution, and students also did not switch their majors.

“These results confirm our own internal studies we’ve done following what happens with financial aid students since the legislation passed in 2013,” said Teresa Lubbers, Indiana’s commissioner of higher education. “Our financial aid complements our other attitude about how we finance education in Indiana. We have a philosophy of paying for what we value.”

Lubbers said institutions receive performance funding by getting more students to complete on time, so creating the incentive for students to increase the rate they finish means that the colleges they attend will receive more aid, as well.

More institutions and states are looking at decreasing the time students take to a degree as a way to boost overall completion numbers. A growing body of research has pointed out that full-time students are more likely to graduate — although there are concerns about the unintended consequences that can come from policies that mandate or encourage full-time credit loads, for example on returning students or those with full-time jobs or family responsibilities.

Complete College America, which is based in Indiana, has advocated for 15 to Finish reforms across the country.

“CCA has long believed that time is the enemy of college completion,” said Sarah Ancel, vice president of strategy at CCA, who was also an associate commissioner at the state’s higher education department when the policy went into effect. “One thing that is really notable is the positive impact the policy has for underrepresented minorities. It’s a victory for completion, but also equity.”

The analysis found credit hours increased by 11.7 percent for ethnic minority students compared to 9.4 percent for nonminority students.

The analysis looked at two different financial aid awards offered in Indiana — the state’s 21st Century Scholars program and the Frank O’Bannon Grants — which make up the majority of the state’s aid programs. The 21st Century program is for low-income students who meet certain GPA and academic benchmarks. In 2014, the program awarded on average $7,900 to first-time students at four-year institutions and $3,630 to first-time students at two-year institutions. With the state’s financial aid policy change, students had to maintain 30 or more credits a year to continue to receive the annual scholarship.

The O’Bannon Grant is also need-based, however, the highest award amount for private university students is $7,400. For four-year students, it’s $3,700, and for two-year students, it’s $3,100. Under Indiana’s 15 to Finish policy, students also have to maintain 30 credits a year to receive the maximum award amount, but students who complete 24 credits or fewer could lose up to $300 if they received the maximum award.

“A lot is at stake for our 21st Century Scholars — if they don’t complete the credit hours, they lose the scholarship and they would fall into another financial aid pool,” Lubbers said. “The students who have the most to lose felt the greatest sense of urgency to pick up extra credit hours.”

Despite the positive results, Yanagiura cautions that they are based on short-term outcomes and there is more about the policy that needs to be studied.

“The policy is still only a few years old, and long-term outcomes are not available yet and beyond the scope of this study,” he said, adding that those long-term outcomes include graduation, wage and student debt.

https://www.insidehighered.com/news/2017/05/23/analysis-indiana%E2%80%99s-15-finish-finds-positive-effects