New Financial Aid Regulations Will Have A Detrimental Impact on Retention for Many Colleges and Universities

John W. Dysart
President
The Dysart Group, Inc.
New rules going into effect in July are likely to present retention challenges for many colleges and universities. The Department of Education has changed the rules with regard to satisfactory academic progress.

Students have always been required to demonstrate that they are making satisfactory progress toward attaining their degrees or certificates. The regulations have included both a quantitative and qualitative measure.

Let?s talk about grades. Generally, students are expected to achieve a minimum, cumulative grade point average of at least 2.0 by the end of their second year. Many colleges and university have traditionally required a minimum grade point average of only 1.75 or so by the end of the first year. This is the qualitative measure.

Students must also be earning a sufficient number of credits to be making satisfactory academic progress. Generally, students must be earning credits at a rate that ensures they will complete their programs in no more than 150% of the allotted time. For example, for a full-time undergraduate
in a baccalaureate program who is expected to graduate in four years, the regulations dictate that the student take no more than six years to complete their four year degree.

The major change is in how much flexibility schools are given to afford students in academic peril a chance to recover. Many schools check academic progress once a year, usually at the end of the Spring semester. Students who have grade point averages below the minimum or who have
earned an insufficient number of credits are often automatically placed on probation for a year. This allows students two more semesters to improve their grade point averages or earn a sufficient number of credits and still receive federal financial aid.

The new rules say that automatic probation can only be offered to students at schools who check progress every term. Thus, if a student is struggling at the beginning of the Fall semester, they can be placed on probation for the following Spring term and still receive their federal aid. If they are not back in good standing at the end of the Spring term, they are subject to having all of their federal financial aid withdrawn. Not much time to recover from a bad semester.

Schools can still check progress once a year, but if progress is checked once a year, schools can no longer automatically place students on probation. Those who fall below the quantitative or qualitative measure are no longer eligible for federal financial aid.

There exists a possibility of appeal for students, but these stricter rules are going to mean eligibility for federal financial aid is often going to be denied to most students after only one year of academic difficulty. The impact of this rule change on retention rates for many colleges and universities
is going to be significant.

The change will not have any impact on students who do not rely on federal financial assistance to attend college. However, for many students, ineligibility for federal financial aid will make continuing in college impossible.

If you have not already done so, schedule a meeting with your Director of Financial Aid. Calculate the number of students over the last few years who were automatically placed on probation after the first year of attendance. These are the students you are likely to lose in the future.

Be prepared for the possibility that your retention rates may decline, but also be aware that there may be significant financial implications for your college or university. Losing even another dozen students each year can be material at an institution on a tight budget.