PRESENTATION TO THE CALIFORNIA STUDENT AID COMMISSIONERS

1. 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)

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

3. 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)

4. 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)

5. 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.

6. 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

7. 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.

8. 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.

9. Income from all sources (past year & year ahead) Parent’s 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 What is included in the Formula?

10. 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.

11. 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.

12. The Financial Aid Process…

13. Goals of Financial Aid Institutions desire to: • Provide ACCESS and CHOICE. • Conduct an accurate and fair assessment of the family’s 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.

14. 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 Financial Aid Process Outline:

15. 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

16. 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

17. 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.

18. 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.

19. 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 student’s 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...

20. 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 How The Formula Works

21. COA - EFC = Federal Need

22. 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

23. 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

24. 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

25. 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)

26. 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

27. Financial Aid Notice - Open Requirements • Verification Process • Loan Documentation/Entrance Loan Counseling • INS-Citizenship • Selective Service • Social Security Number

28. 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.

29. 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.

30. 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 common…the college names the recipients, not the federal or state government.

31. WHO ARE WE? • CASFAA • CCCSFAAA • CLFE

32. 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.

33. 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.

34. 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.

35. 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.

36. 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.

37. 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.

38. 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.

39. CLFE Goals Committedto serving the needs of California students, parents and schools. partners in the delivery and administration of education loans. We promote responsibleborrowing, default prevention/aversion and debt management. We believe that honestand faircompetition in a regulated industry enhances product and service quality. We encourage and participatein the open exchange of ideas and information to maximize the synergy of our efforts. We support communityoutreach and develop and articulate legislative and regulatory positions.

40. 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