Packaging

1. Packaging How it works…

2. Ever heard these? Most popular financial aid questions: • What’s a Stanford loan? • Can I get a copy of my reward letter? • Do I have to do my FASFA every year? • I have to do paperwork to get my money?! • Can I get more financial aid to buy a car? • Or laptop? • Or to pay for my trip?

3. Or said these? We are actually just as confusing as students. Have you ever told a student… • You need to go sign your EMPN? • Have you done your loan entrance? • Let’s see if we have your ISIR… • It looks like you have a CFLAG. • You’re ISIR is rejected. • It’s because you’ve exceeded your COA... • Do you have any means-tested benefits?

4. Learning Objectives • Today we will learn • Definition of packaging • Funds we typically package • Estimated Financial Assistance & its affect • Steps to package awards • Packaging categories & sequence • Packaging models • Overawards • Hands-on example • Notifying students of their awards

5. So what IS packaging? • Per the FSA Handbook* • Packaging is the process of awarding aid without exceeding the student’s financial need • More simply: it’s how you decide what students are awarded (in what combination) *Source: 1112 FSA Handbook Volume 3, Chapter 7, page 3-129

6. Funds we typically package • Federal programs • Pell, SEOG, Perkins, Federal Workstudy, Direct Loans, PLUS Loans, Graduate PLUS Loans, TEACH, Iraqi & Afghanistan Service Grant • State programs • TPEG, TEXAS Grant, TEG, BOT, CAL, Texas Workstudy, Set-Aside Funds • Institutional programs

7. Estimated Financial Assistance • Estimated Financial Assistance (EFA) is taken into consideration when packaging • Examples include (but not limited to) • Pell (first source of aid) • Other federal, state, institutional grants • Subsidized & Perkins loans • Work study • Unsubsidized loans* • PLUS loans* • Private loans* * Indicates funds that can replace all or part of the EFC as long as the COA is not exceeded.

8. Other Examples of EFA • ROTC living allowances • Scholarships (including athletic & ROTC) • Employer reimbursement of tuition & fees • Tuition and fee waivers • Fellowships and assistantships • AmericorpsFunds • Exceptions to EFA: • Iraq & Afghanistan Service Grant (for purposes of awarding other FSA) • Prepaid tuition plan • Federal veteran benefits Source: 1112 FSA Handbook Volume 3, Chapter 7, page 3-131

9. Steps to Packaging

10. Steps to Packaging • Determine the student’s Cost of Attendance (COA) budget & Expected Family Contribution (EFC) • Award Federal Pell Grant • Calculate the student’s financial need • Package campus-based, state, federal, and institutional funds • Package or refer students to other supplemental sources of assistance

11. Packaging Steps: STEP 1 Determine the COA & EFC A typical COAconsists of* • Tuition & Fees • Books & Supplies • Room & Board • Transportation • Personal Expenses EFC comes from…? * COA amounts are determined by the institution & could include PJ adjustments

12. Packaging Steps: STEP 2 Award Pell Grant • Pell Grant awarded based on EFC • Pro-rated based on enrollment status and EFC range

13. Packaging Steps: STEP 3 Calculating student’s remaining need Cost of Attendance -- Expected Family Contribution -- EFA _____________________________ Initial Need -- PELL award (if any) __________________________________ Remaining Need to package other funds

14. Packaging Steps: STEP 3 Calculating students’ non-need eligibility Cost of Attendance -- PELL -- EFA -- Need-based aid awarded ________________________________ Room for non-need based aid

15. Packaging Steps: STEP 4 Package Campus-based, Federal, State, Institutional • Package other aid programs listed above according to your school’s packaging philosophy/policy • Keep in mind that each school is different!

16. Packaging Categories & Sequence

17. Packaging Guidelines • Responsibility for paying for college rests with the student and their family • Federal Pell Grant is the foundation of undergraduate student aid packages • Families can borrow from some aid programs to replace all or a portion of their EFC • Scholarships cannot be substituted for the EFC • Must take expected financial assistance (EFA) into account

18. Goals of an Administrator • Provide as many students as possible with resources to meet their financial need • Distribute aid in an equitable manner • Provide assistance that will be the most beneficial to the student • Manage financial aid funds • Recruit and retain students • Meet areas of national need Sometimes these are competing goals!

19. Packaging Categories • Schools can organize their packaging categories based • Enrollment status • Classification • Academic program or major field of study • Application date • Need Based vs. Non-Need Based • Residency Criteria • Packaging philosophy must be detailed in the school’s policy and procedures

20. Packaging Sequence What gets awarded 1st? 2nd? • Schools designate the order in which it awards funds from various programs • Again, this can vary from school to school • It can depend on the categories designated • This should be noted in the policy and procedure manual for your institution

21. Packaging Models

22. Six Basic Packaging Models • First-Come, First-Served • Gift Aid First • Self-Help Concept • Special Targeted Groups • Equity Concept • Absolute Dollar Equity • Fixed Percentage Equity • Individualized Packaging Don’t worry, you’ll get it!

23. First Come, First Served • Financial aid awards based on the order in which completed applications are received by the aid office until funds are exhausted • Benefits: • Rewards students who get their stuff done early • Drawbacks: • May not have funds available for students that need it most

24. Gift Aid • Gift aid is awarded first and self help aid is awarded to meet any remaining need • Benefits: • Decreases likelihood of loan debt • Drawbacks: • Limited gift aid funding

25. Self Help • Self-help assistance is awarded after the family contribution and before any consideration for gift aid • Benefits: • Places same burden on all students • Allows gift aid to those who do not have same access to self-help • Drawbacks: • Increases likelihood of higher loan debt

26. Targeted Groups • Separate packaging criteria for specific groups of students in addition to specific criteria required by law or regulation • Benefits: • Easier to tie packaging philosophy to institutional goals • Drawbacks: • Tougher to defend – watch the “bait and switch”

27. Equity Concept • Absolute Equity • All students are funded up to an institutional maximum fixed dollar amount with gift aid before their remaining need is met with self-help. • Fixed Percentage Equity • An institutional maximum percentage level of NEED or COST for all gift aid is used rather than a fixed dollar amount. • Benefits: • Provides for an equitable distribution • Drawbacks: • Difficulty in managing overawards and maintaining that equitable distribution

28. Individualized • Packaging based on the FAA’s evaluation of a student’s individual costs, resources and needs • Benefits: • Each financial aid packaged is customized • Personal touch with each student • Drawback: • Time consuming • High subjectivity

29. Which Should You Use? • This depends on your institution • Most institutions do not use one specific model… • A variation of one or more of these models is used by institutions to fit in with that school’s objectives

30. Things to Consider • Should we package PLUS loans? • Should we package private loans? • Should we package loans at all? • Which comes first, the loan or work study? • Which comes first, the grant or the loan? There is no one answer!

31. Overawards & Packaging

32. Overawards • Overawards occur when: • Aid exceeds a student’s need or COA • How does this happen? • EFC changes (due to verification or updates) • COA changes (possibly due to enrollment) • Additional EFA comes in (late scholarship, exemption payment) • This is the student’s responsibility to report to us • When overawards happen, we make adjustments

33. Hands-On Example

34. Packaging Example: Self Help Sally is attending Spurs College (SC). She is a dependent senior. SC employs a self-help packaging model and awards work study prior to loans. SPURS COLLEGE COA $20,000 EFC $500 Scholarship $2,500 PellGrant $4,800 AWARD MAXIMUMS Perkins $1,500 Work Study $3,000 Institutional Grant $3,000 Stafford $5,500

35. Packaging Example: Self Help • Cost of Attendance • EFC • Need • Scholarship (EFA) • Pell • Remaining Need • Work study • Perkins • Stafford Loan • Remaining need before grants • Institutional Grant • Unmet Need • Anything Else???? • 20,000 • (500) • 19,500 • (2,500) • (4,800) • 12,200 • (3,000) • (1,500) • (5,500) • 2,200 • (2,200) • 0 • Remaining unsub eligibility?

36. Packaging Example: Self Help • What if after you have packaged, you are informed that the student is receiving another $500 scholarship? • Does this fit in the COA as is? • Does it fit within the need? • If not what would you reduce?

37. Notifying Students of Awards

38. Notifying Students of Awards • Institutions are required to inform students: • Amount of award(s) • Terms and conditions of award • Manner and timing of payments • Institutions have the option of confirmation or notification • Confirmation – Student formally accepts awards • Notification – Student not required to accept award, but must notify school if they do not want aid

39. Notifying Students of Awards • What if there aren’t enough funds? • Caveat may be included on award notification stating that the award is subject to the availability of funds and may be revised if funds not available or eligibility changes

40. Wrapping Up • Today we learned • Definition of packaging • Funds we typically package • Estimated Financial Assistance & its affect • Steps to package awards • Packaging categories and sequence • Packaging models • Overawards • Hands-on example • Notifying students of their awards

41. Thank you! ???????????????????????????????????? Erika Cox University of Texas at San Antonio erika.cox@utsa.edu ????????????????????????????????????