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Reimagining State Aid

Reimagining State Aid. MACJC Legislative Workshop June 11, 2013. Areas of Change in Higher Education. Enrollment has increased Instruction delivery models have changed to include traditional, online, hybrid and MOOCs Student profile has morphed and aged

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Reimagining State Aid

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  1. Reimagining State Aid MACJC Legislative Workshop June 11, 2013

  2. Areas of Change in Higher Education • Enrollment has increased • Instruction delivery models have changed to include traditional, online, hybrid and MOOCs • Student profile has morphed and aged • “Nontraditional” population has increased • Average time to completion has increased • Shift of financial burden from state to student • Numerous changes to Title IV Aid programs

  3. Areas of Stagnation • State appropriations for financial aid • Prior to FY 2014, SFA appropriation had increased only 6% since FY 2000 • Maximum award caps limit need for increases • Awards have less purchasing power • Deadlines have been moved up to limit eligibility • State aid programs • MTAG and MESG: est. 1995 • HELP: est. 1997 • Loan/Scholarships: Omnibus Bill of 1991

  4. Reimagining Aid Design and Delivery (RADD) A Bill and Melinda Gates Project

  5. Reimagining Aid: The Gates Project • Bill and Melinda Gates Foundation • Reimagining Aid Design and Delivery (RADD) Project Goals: • Shift public conversation on financial aid • Focus on affordability and completion • Grants totaling $4 million to 16 organizations: • Evaluate the current system • Provide policy recommendations • Produce white papers

  6. Recurring Themes • Make aid simpler and more transparent • Spur innovations in higher education that can lower costs and meet the needs of today’s students • Ask institutions, state and students to share responsibility for producing more graduates without compromising access and affordability

  7. State Aid Now Programs and Recipients

  8. Program Administration • Write and update program Rules & Regulations • Accept applications and supporting documents • Process 65,000 applications annually • Process 140,000 support documents annually • Determine eligibility • Make award offers • 28,000-30,000 awards annually • Disburse funds to 30+ institutions • Monitor continuing student eligibility

  9. 32 Existing State Aid Programs 27 Programs Funded by SFA Appropriation 5 Grant Programs 27,320 awards; $26.75 million 21 Loan/Scholarship Programs and 1 Loan Repayment Program 1,600 awards; $7.94 million 3 Programs Funded by Grants or Investments 42 awards; $34,000 1 Program Funded by IHL Appropriation per Ayers 200 awards; $750,000 1 Program Funded by MDE Appropriation per 2013 “Ed Works” 100 awards; $1.5 million (FY 2014 Projections)

  10. Distribution of State Aid among Programs Where does the money go?

  11. Grants and Loan/Scholarships Grants – NO repayment obligation Loan/Scholarships – Repay with service or money Award 1,600 – 1,700 loan/scholarships annually Service repayment – 1 year service for 1 year loan/scholarship 770 accounts (77%) of 1,000 accounts closed annually repaid with service 90 accounts (9%) of 1,000 accounts closed annually repaid with service and money $6 million (85%) of the $7 million in principal paid or cancelled annually to close accounts is cancelled by service Monetary repayment – principal + interest (Stafford unsub. rate) 140 accounts (14%) of 1,000 accounts closed annually repaid with money $1 million (15%) of the $7 million in principal paid or cancelled annually to close accounts is paid with money

  12. Collections from Repayment Approximately $1.2 - 1.5 million collected annually 3 Methods of Collection Loan Servicer Collection Agencies Borrower-paid collection costs Tax Offset Deposited into Consolidated Revolving Loan Fund Interest-bearing trust fund Legislative authority required for spending from fund

  13. Distribution of Aid by Institution Type Percentages represent amounts.

  14. Distribution of Aid by Award Type Percentages represent amounts.

  15. Distribution of Grants by Program

  16. Distribution of Aid by Classification Percentages represent amounts.

  17. Distribution of Loan/Scholarships by Shortage Area Percentages represent amounts.

  18. State Aid Recipients Who gets the money?

  19. All State Aid Recipients • 94% are grant recipients • Less than 3% of grant recipients are required to demonstrate financial need to receive aid • 6% are loan/scholarship recipients • 99% are undergraduates • 1% are graduates

  20. All State Aid Recipients

  21. All State Aid Recipients

  22. MTAG Recipients • MS Resident Tuition Assistance Grant (MTAG) • 89% of all grants awarded; 62% of grant funds awarded • EXCLUDES full-Pell recipients • Students with 15 ACT and/or 2.5 GPA • Continuous full-time enrollment required • Max of 8 terms of eligibility • $500 to freshmen/sophomores; $1,000 to juniors/seniors

  23. MTAG Recipients

  24. MTAG Recipients

  25. MESG Recipients • MS Eminent Scholars Grant (MESG) • 9% of all grants awarded; 23% of grant funds awarded • First-time college students with 29 ACT and 3.5 GPA • Continuous full-time enrollment required • Can be stacked to EXCEED Cost of Attendance • Max of 8 terms of eligibility • $2,500 annual award

  26. MESG Recipients

  27. MESG Recipients

  28. HELP Recipients • Higher Education Legislative Plan (HELP) • 3% of all grants awarded; 14% of grant funds awarded • Only need-based program • First or second-year students • 2.5 GPA, 20 ACT, rigorous core curriculum • Average AGI over two years < $36,500 • Continuous, full-time enrollment • Max of 10 terms of eligibility • Award equals tuition

  29. HELP Recipients

  30. HELP Recipients

  31. Loan/Scholarship Recipients • Loan/Scholarships • 6% of all awards; 26% of all funds awarded • 1,600-1,700 recipients; $8 million • Upper-class or graduate students • Max award amounts for most programs • Max of 2-3 years (4-6 terms) for most programs • Repayment required • Teacher Education and Nursing (primary fields)

  32. Loan/Scholarship Recipients

  33. Loan/Scholarship Recipients

  34. All Mississippi Federal Aid Applicants

  35. All Mississippi Federal Aid Applicants

  36. Reimagining State Aid Filling Gaps and Meeting Needs

  37. Reimagining State Aid • Should state student financial aid be awarded for merit, financial need, or some combination of the two? • Are the state’s merit-based programs meeting the needs of our students and our state? • Should students receive incentives for being college-ready when they graduate high school? Regardless of income?

  38. Reimagining State Aid • Should students have incentives for timely completion of a postsecondary credential? • Should students in retraining and/or work-force development programs be eligible for state financial aid? • Should part-time and/or nontraditional students be eligible for state aid? • Should aid be used to increase completion rates among low-income and/or first generation students?

  39. Reimagining State Aid • Should financial aid be used to reward tax-payers? • Should financial aid be used to reward students for certain meritorious achievements (exemplary ACT score, high GPA, etc.)? • Should financial aid be used as an incentive to keep students in the state to work after completion of a postsecondary degree/credential?

  40. RADD Ideas What ideas have been proposed?

  41. RADD Ideas for State Aid • Increase funding for state aid • Remove the Pell exclusion from MTAG • Increase MTAG award amounts • Raise the maximum income allowed for HELP • Eliminate MESG/use savings to expand HELP • Eliminate ability for MESG to exceed COA • Create program for part-time students • Create incentive awards for GPA, completion of hours, degree completion, etc.

  42. Other State Aid Reforms Needed • Combine state aid code sections • Improve transparency • Create consistency • Increase efficiency • Create single authority for state aid • Include authority on current and projected workforce needs

  43. Questions

  44. Contact Information: Jennifer Rogers jrogers@mississippi.edu (601) 432-6791

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