October 7, 2010

1. Presentation to the Wisconsin Legislature Special Committee on Review of Higher Education Financial Aid Programs October 7, 2010

2. Challenges to consider when moving forward Jane Hojan-Clark, PhD University of Wisconsin-Milwaukee

3. Presentation Outline • Background Information • Mission of the Financial Aid Administrator • What is Financial Aid and How is Aid Awarded? • Institutional Data • National Challenges • State Challenges • Institutional Challenges • Moving Forward

4. Provide assistance to students and their families in meeting the financial costs of attaining a degree in higher education. Our Vision… We will achieve the highest level of customer satisfaction for our students, families and community partners. By skillfully managing our resources and valuing and investing in our individual members, we will develop a team able to proactively navigate our changing environment. We will successfully implement new technology, expand scholarship opportunities and provide more comprehensive educational programs. Student Financial AidOur Mission...

5. Advocate For Students Good Steward Of Funds

6. WHAT IS FINANCIAL AID? • Grants, Scholarships, Loans and Work Study • Financial resources to assist students with educational expenses • An access tool NEED BASED AID Need based aid requires a “needs” test for eligibility • WHEG, Federal Pell Grant, SEOG, Federal Perkins Loan, Federal Work Study, Federal Subsidized Stafford Loan • Generally uses Federal (Congressional) Methodology for determining aid eligibility

7. WHAT IS FINANCIAL AID? MERIT BASED AID Merit based aid rewards special achievement, skills or other attributes that are not necessarily tied to need • Academic Excellence Scholarship, athletic scholarships, National Merit Scholarship, general scholarships, fellowships, assistantships NEED/MERIT BASED HYBRID Some scholarships have a need component • Some National Merit Scholarships, Lawton Grant, Misc. service club scholarships, Fund For Wisconsin Scholars (FFWS)-Morgridge gift

8. Process Driver for Aid • Congress through the U.S. Dept of Education • Connected to Higher Education Act of 1965 and subsequent reauthorizations • Backbone of Aid Process nation-wide • Process and eligibility—FAFSA Formula, data base matches, verification, deadlines

9. Cost of Attendance EFC = Need UW-Milwaukee example (cost of education for 2010-11, resident) $22,112 $22,112 (Need) -0 EFC -$5,550 (Pell) = $22,112 (Need) -$2,563 (Wheg) = $13,999 (Unmet Need) The portion of demonstrated financial need that is not filled with financial aid = Unmet Need* *The amount of unmet need continues to increase every year. HOW IS AID AWARDED?WHAT IS FINANCIAL NEED AND WHAT IS UNMET FINANCIAL NEED?

10. INSTITUTIONAL DATA University of Wisconsin-Milwaukee • Serves the largest number of Wisconsin residents compared to any other College or University in the State • More than 30K enrolled students • 30,523 financial aid applicants in 2009-10 (more than 8% increase in applicants from prior year and 17% increase since 2005-06 or five years ago) • Offered over $390M in aid in 2009-10

11. INSTITUTIONAL DATA University of Wisconsin-Milwaukee • Approximately 7,500 Federal Pell Grant recipients - increased by more than 30% in 2009-10 •  Anticipate 2010-11 will result in increase of applicants/participants - applications are 5% higher than they were at this time last year.  Anticipate more than 80% of enrolled UWM students will receive financial assistance during 2010-11 • 5,227 UW WHEG recipients in 2009-10 (1,010 were wait listed due to depleted State funds) • 5,890 UW WHEG recipients to date in 2010-11 (579 have been wait listed to date due to depleted State funds)

12. INSTITUTIONAL DATA University of Wisconsin-Milwaukee • Over 70% of accepted aid is federally funded • Over 70% of accepted aid is loan assistance • Average UG debt upon graduation is $27,072 • Loan default rate is 3.4% • Over 90% of UWM students work and go to school (633 students were employed under FWS in 2009-10)

13. Federal Financial Aid: Increasing Grant/Loan Imbalance Source: College Board

14. NATIONAL CHALLENGES in Financial Aid • Implementation of Reauthorized Higher Education Act • Congressional activity-many bills in the past 2 years; more coming our way • Constant changing of regulations and rules • Complexity of system • Funding issues—federal and state • Declining buying power of grants and loans • Student debt load • Alternative loan and credit card borrowing

15. STATE CHALLENGES in Financial Aid • Changing regulations and rules • Complexity of system • Loss of predictability • Increasing economically challenged residents • Increased demand for financial aid –more appeals • Insufficient grant funds • Declining buying power of grants and loans • Student debt load • Perceived or real lack of access to higher education by Wisconsin residents

16. INSTITUTIONAL CHALLENGES in Financial Aid • New legislation • Loss of predictability • Insufficient grant funds • Reductions in federal campus based aid • Reductions in Endowments/Trusts and gift aid • Fewer jobs available for student workers • Increasing economically challenged student body • Increased demand for aid • More appeals for the same dollar due to the economy • Perceived or real lack of access by Wisconsin residents

17. INSTITUTIONAL CHALLENGES in Financial Aid • Limited operational resources • Increasing complexity and volume of programs • Increasing need for technology and “techi” know how • Transitioning from FFEL to DL • Implementing year-round Pell • Increased service expectations – need for instant gratification • Increased insufficient academic college preparedness in conjunction with financial need

18. Moving Forward • Ensure “college readiness” in Wisconsin’s grade schools and high schools, e.g. make available and/or require courses that prepare students for college • Ensure access to higher education for Wisconsin residents through awareness, education and financial support • Promote Wisconsin employment development or opportunities for college graduates • Support Growth Agendas, e.g. UW System’s Growth Agenda for Wisconsin

19. Moving Forward • Fully support State financial aid programs to ensure access • Fully fund primary State Grant Program/s to support eligible “highest need students” and eliminate “wait listing” • Address issue of access for students who are not currently eligible for the primary State Grant Program/s who show financial need (without impacting available funds to the “highest need students”) • Streamline program administration – provide regulatory relief, e.g. allow funding carry forward or back between fiscal years or fund sum sufficient

20. Moving Forward • Fully support State financial aid programs to ensure access (cont.) • Collapse smaller programs into larger program • Encourage full-time enrollment while supporting provisions for part-time students who have other life commitments, e.g. families • Establish provisions to allow tuition to be set, and therefore grant formulas, a year in advance so students can be informed in a timely fashion and can plan appropriately • Support the administration of financial aid through Administrative Allowances

21. Moving Forward • Encourage and support initiatives that promote college access and awareness and support, e.g. the Fund for Wisconsin Scholars and the Wisconsin Covenant • Coordinate all State wide initiatives to avoid or eliminate duplication of effort and to strategically utilize available resources • Encourage and support campus programs that provide college access through life support to disadvantaged and/or unprepared students, e.g. UWM’s Jane Bradley Pettit Life Impact Program

22. CONTACT INFORMATIONJane Hojan-Clark, PhD Executive DirectorUniversity of Wisconsin-MilwaukeeDepartment of Financial Aid, Student Employmentand Military Education Benefits2442 East Kenwood Blvd., Room 162P. O. Box 469Milwaukee, WI 53201-0469414.229.6300jhojan@uwm.edu