Big Changes in Federal Student Aid Programs Present Important Opportunities for Higher Education Administrators
John W. Dysart
The Dysart Group, Inc.
Significant changes have taken place in federal financial aid programs in recent years and even more changes are currently underway. Presidents, Business Officers, Enrollment Vice Presidents and Retention Officers should make sure that they are aware of the changes and have a seat at the table in the decision making process regarding how these opportunities will be implemented at their campuses.
Financial aid can be so complicated that chief administrators often leave decisions regarding financial aid solely in thehands of financial aid administrators. While their experience and knowledge is critically important, financial aid initiatives often impact colleges in unexpected ways. Every member of the institutional leadership team should participate in discussions when significant changes in aid administration or program growth occur.
There have been important changes in federal student aid in recent years:
? In 2006 the federal government introduced the Academic Competitiveness Grant (ACG). This relatively new grant is for Federal Pell Grant Recipients in their first or second year of college who have completed rigorous high school programs. First year students can receive grants of $750 while second year students can receive grants of $1,300.
? The National Science and Mathematics Access to Retain Talent Grants were introduced in the same year. They are also known as National SMART Grants. Federal Pell Grant recipients enrolled in their third and fourth years of study can be eligible for grants up to $4,000 per year. These students must be majoring in physical, life, or computer sciences, mathematics, technology, engineering or in certain foreign languages.
? The Teacher Education Assistance for College or Higher Education Grant (TEACH Grant) has just been introduced for the coming year. Students who intend to teach at elementary or secondary schools serving students from low income families could be eligible for grants of up to $4,000 per year. Such students do not need to demonstrate financial need in order to be eligible!
? The federal government has recently passed legislation that makes virtually all undergraduate students eligible for an additional $2,000 of unsubsidized Federal Stafford Loans for the coming year. Eligibility is not based on financial need.
? Significant changes have occurred in the Federal and private student lending industry. Many lenders have ceased participation and others have ceased working with certain colleges and universities. Still others have increased minimum credit eligibility requirements.
? The federal minimum wage will increase in July 2008 to $6.55 and again in July 2009 to $7.25. Increased wages? will mean fewer work-study hours for students.
– Consider setting up a meeting with your Director of Financial Aid. Ensure that representatives from all of the key offices are in attendance.
– Take the opportunity to have your Financial Aid Directorexplain the changes in greater detail. – Discuss the implications of these changes on financial aid packaging, student debt load, collections, retention, cash flow and the institutional discount rate.
– Find out how the aid office is handling the implementation of the changes. Is the implementation schedule supporting institutional goals?
These are important initiatives and changes. Divisional leaders will be well served by taking the time to understand them. Colleges and universities are going to be affected in many ways. It is prudent for top leaders to understand these changes and participate in strategic implementation since the impact will be felt across most institutional divisions.