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An Overview of Student Financial Aid

An Overview of Student Financial Aid. Prepared by Emily Pope, Legislative Fiscal Bureau For the Legislative Council Study Committee on Student Financial Aid Programs August 17, 2010. College Cost: Sample Student Budgets. Determining “Need”.

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An Overview of Student Financial Aid

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  1. An Overview of StudentFinancial Aid Prepared by Emily Pope, Legislative Fiscal Bureau For the Legislative Council Study Committee on Student Financial Aid Programs August 17, 2010

  2. College Cost: Sample Student Budgets

  3. Determining “Need” • A student’s eligibility for federal need-based aid is determined by his or her Free Application for Federal Student Aid (FAFSA). • Information provided on the FAFSA is used to calculate a student’s expected family contribution (EFC). • The student’s need is the total cost of attendance less the student’s EFC.

  4. Factors Used to Determine EFC • EFC is determined by a number of factors including: • Family income • Assets • Number of children and other dependents in the household • Number of family members enrolled in higher education • Liabilities

  5. Total Need • In 2008-09, Wisconsin resident students had need totaling $1,474.2 million. • Unmet need is the difference between total need and the amount of need-based aid provided. • In 2008-09, resident students had unmet need totaling $675.2 million.

  6. Need-Based Aid • In 2008-09, 122,742 resident students enrolled in Wisconsin institutions received a total of $799.1 million in need-based aid. • There are four sources of need-based aid: federal, state, institutional, and private.

  7. Federal Need-Based Aid • The federal government is the largest source of need-based aid provided to resident students. • In 2008-09, resident students received $595.5 million in federal need-based aid. This was approximately 75% of all need-based aid received.

  8. Federal Need-Based Aid: Loans • Subsidized Stafford Loans • In 2008-09, 101,942 students received awards totaling $344.7 million • Students can borrow $3,500 to $5,500 per year based on their student status; maximum of $23,000 total • For loans originated in 2010-11, interest rate is 4.5% • Interest does not accrue on subsidized loans while the student is enrolled

  9. Federal Need-Based Aid: Loans • Perkins Loans • In 2008-09, 9,838 students received loans totaling $17.5 million • Students can borrow up to $5,500 per year up to a total of $27,500 • Interest rate is 5% • Interest does not accrue while the student is enrolled • Campus-based program

  10. Federal Need-Based Aid: Loans • Both Perkins and Stafford loans may be forgiven under certain circumstances • Qualifying teachers, librarians, nurses, medical technicians, law enforcement, corrections officers, fire fighters, members of the Armed Forces, and certain other public service jobs • Nursing and Health Professions Student Loan Programs • $1.0 million to 383 students

  11. Federal Need-Based Aid: Pell Grants • Largest source of grant aid for resident students • In 2008-09, 65,577 resident students received grants totaling $183.5 million • Maximum grant is $5,550 in 2010-11 • Grants determined based on EFC and cost of attendance

  12. Federal Need-Based Aid: Pell Grants in 2008-09

  13. Federal Need-Based Aid: Other Grants • Supplemental Educational Opportunity Grant (SEOG) • In 2008-09, 22,932 students received grants totaling $14.1 million • Campus-based program; for students with exceptional financial need • Academic Competitiveness Grant • In 2008-09, 7,279 students received grants totaling $5.8 million • Pell grant recipients who have completed a rigorous high school program of study • Up to $750 for first-year students; up to $1,300 for second-year students

  14. Federal Need-Based Aid: Other Grants • National Science & Mathematics Access to Retain Talent (SMART) Grant • In 2008-09, 843 students received grants totaling $2.6 million • Up to $4,000 annually to third and fourth year students • Pell recipients enrolled in certain majors; must maintain a 3.0 GPA • Bureau of Indian Affairs Grant • Students who are at least one-quarter Native American or a recognized tribal member • Appropriate tribal office selects students and determines award amounts • In 2008-09, 1,330 students received grants totaling $6.1 million

  15. Federal Need-Based Aid: Work Study • Federal government subsidizes student wages • In 2008-09, 13,153 students earned $19.0 million through the work study program

  16. State Need-Based Aid • The State of Wisconsin is the second largest source of need-based aid for resident students. • In 2008-09, resident students received $117.0 million in state need-based aid. This was approximately 15% of all need-based aid received. • Higher Educational Aids Board (HEAB) is the administering agency for most state financial aid programs.

  17. State Grant Programs: WHEG & TG • The Wisconsin Higher Education Grant (WHEG) program and the Tuition Grant (TG) program are the two largest sources of state need-based financial aid. • There are three WHEG appropriations: one for UW System students, one for technical college students, and one for tribal college students. • WHEG-UW appropriation is a capped sum sufficient linked to average percentage tuition increases. • TG program provides need-based financial aid to resident students enrolled in Wisconsin private, nonprofit institutions.

  18. WHEG & TG Comparison2008-09

  19. WHEG & TG Historic Funding

  20. Other State Grant Programs

  21. Other State Grant Programs • Talent Incentive Program (TIP) • Grants to the most needy and educationally disadvantaged students selected by the staff of the Wisconsin Educational Opportunities Program (WEOP) under DPI • Total funding was $5.9 million in 2008-09 of which $1.4 million was federal matching funds. • Awards averaging $1,248 to 4,815 students enrolled in all four sectors

  22. Other State Grant Programs • Minority Undergraduate Retention Grant (MURG) • Resident minority students enrolled in WTCS, private institutions, or tribal colleges • Retention grant, excludes freshmen • WTCS: 474 with awards averaging $860 in 2008-09 • Private colleges: 277 students with awards averaging $1,326 in 2008-09 • Tribal colleges: 49 students with awards averaging $868 in 2008-09

  23. Other State Grant Programs • Lawton: • MURG program for UW System students • Appropriation is under the UW System, not administered by HEAB • In 2008-09, 3,254 students with awards averaging $1,773 • Appropriation is a capped sum sufficient linked to average percentage tuition increases

  24. Other State Grant Programs: UW System • Tuition Increase Grants • Created under 2009 Act 28 • Meant to offset tuition increases for all students whose family income is less than $60,000 and who do not receive WHEG grants • $4.1 million PR in 2009-10 and $8.3 million ($6.4 million GPR and $1.9 million PR) in 2010-11 • Approximately 11,000 students received TIG in 2009-10 • Statutes specify that only students who were enrolled in 2010-11 would be eligible for grants in 2011-12

  25. Other State Grant Programs: UW System • Advanced Opportunity Program • Administered by the UW System • Grants to minority or economically disadvantaged graduate students • Grants made to both resident and nonresident students • Treated as a fellowship program • In 2007-08, 622 students received grants totaling $6.4 million

  26. Other State Grant Programs Under the UW • Under UW System • Student aid: $1,347,400 in 2008-09 • Grants for study abroad: $1,000,000 in 2008-09 • UW-Madison Nelson Institute for Environmental Studies: $100,000 beginning in 2009-10

  27. State Loan Programs • Nursing Student Loan • Forgivable loan program • In 2008-09, 236 students received loans totaling $433,075

  28. Institutional Funds • Generally, gifts, donations, endowment and trust income • Both need-based and non-need-based aid • Most significant at private colleges • In 2008-09, 30,935 students received institutional grants and scholarships totaling $140.3 million • In 2008-09, UW students received a total of $58.6 million through grant, loan, and work programs

  29. Private Funds • Provide both need-based and non-need-based aid • Grants, scholarships, and “alternative” loans • Fund for Wisconsin Scholars • Established by John and Tasha Morgridge • Need-based grants and stipends to Wisconsin high school graduates attending UW System and WTCS institutions • In 2008-09, 2,628 students received awards totaling $4.1 million

  30. Federal Non-Need-Based Aid • Unsubsidized Stafford Loans • In 2008-09, 74,225 students received $240.5 million • Students can borrow $5,500 to $7,500 based on their student status; maximum of $31,000 • Any subsidized Stafford Loans the student might receive are counted against these totals • Interest rate is 6.8%; interest accrues while the student is enrolled and during grace periods • Loans to certain teachers and public service employees can be forgiven

  31. Federal Non-Need-Based Aid • Parent Loan for Undergraduates (PLUS) • Parent, not the student, takes out the loan • Up to the total cost of attendance less any financial aid received • Interest rate of 7.9%; interest accrues while the student is enrolled • In 2008-09, 5,167 loans totaling $38.3 million

  32. State Non-Need-Based Aid • Academic Excellence Scholarship • Awarded to students who have the highest GPAs at each public and private high school • Number of scholarships awarded per school depends on total enrollment • Scholarship is valued at $2,250 per year; state pays $1,125 which is matched by the institution • In 2008-09, 2,918 students received awards totaling $3.1 million.

  33. State Non-Need-Based Aid

  34. Physician & Dentist & Health Care Provide Loan Program • Formerly administered by Commerce; transferred to UW System under 2009 Act 28 • Funded with tribal gaming revenues • Additional $250,000 SEG annually provided for the program under 2009 Act 190 • State funds used to match federal grant moneys; currently, $300,000 annually

  35. Wisconsin Covenant • Students sign the Wisconsin Covenant Pledge as 8th graders • First class of Covenant Scholars will graduate in 2011 • Appropriation under HEAB for Covenant Scholars grants • Currently set at $25.0 million; appropriation will be set by the Legislature during the 2011-13 budget process

  36. Wisconsin Covenant • As proposed, all qualifying students will get awards; however, the size of the award will be based on financial need • Grants range from $250 to $1,500 per year • Wisconsin Covenant Foundation: $40.0 million endowment provided by Great Lakes Higher Education Corporation • The Foundation will provide grants of up to $1,500 to students with $0 EFC

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