Financial Aid Barriers and Opportunities for Improvement Presented at: The Cost of Advancement: Financial Aid and Savings Strategies for Postsecondary Success September 13, 2010 Amy Ellen Duke-Benfield, Senior Policy Analyst

The Importance of Financial Aid Not only does it increase access to college, but it leads to higher completion rates  An additional $1,000 in aid increases college attendance by 4%  Students who drop out are less likely to have a scholarship or financial aid than those who complete (31% vs. 57%)  Influences student educational choices (4 yr vs. 2 yr) 2

Main Sources of Financial Aid Federal Pell Grant  Maximum award: $5,550; prorated based on attendance status (can qualify if attending less than half time) Maryland state grant programs  Guaranteed Access Grant o For FT students who attend college within 1 yr of graduating high school with 2.5 GPA; awards range from $400-$13,700  Educational Assistance Grant o For FT students; awards range from $400-3,000  Part-Time Grant Program o For PT students (3-11 credits/term); max award $2,000 Federal subsidized and unsubsidized student loans Private loans 3

Financial Barriers Lack of knowledge Complexity of student financial aid applications Insufficient aid  Increasing college costs  Financial aid doesn’t cover actual cost of attendance: covering tuition, books, fees AND living expenses o High levels of unmet need high levels of work  Higher levels of work lead to lower aid packages and educational outcomes Lack of flexibility of aid 4

Promising State Strategies 1.Increase awareness  About the availability of aid  About alternative ways of qualifying for federal financial aid (e.g., Ability to Benefit) 2.Decrease red tape 3.Increase or maintain the availability of grants to low- income students 4.Increase the flexibility of current programs 5

Promising State Strategies 5.Increase or maintain dollars invested in flexible, need- based aid that recognizes living expenses as a barrier to college 6.Pilot new models, such as coupling aid with student services and rewarding students for high college performance 7.Use aid to strengthen connections between postsecondary education and careers, such as through work-study jobs in students’ fields of study rather than on campus 8.Make a pool of emergency funds available to students who encounter unexpected financial crises that might otherwise interrupt their schooling 6

Thank you! If you have questions or would like more information, please contact: Amy Ellen Duke-Benfield