Assessing Undergraduate Financial Aid Distribution Patterns: The Case of the University of Missouri LaShonda Carter-Boone University of Missouri System Mardy Eimers University of Missouri System University of Missouri-Columbia MidAIR Fall 2006 Conference Kansas City, Missouri November 9, 2006

2 Overview I. National crisis of access and affordability II. The Spellings Report III. UM-System Undergraduate Financial Aid Summary Report, FY2001-FY2005 IV. Conclusions

3 I. National Crisis of Access and Affordability  College costs continue to climb.  Decrease in state funding for public institutions.  Responsibility for financing college costs increasingly shifting to students and their families.

4 I. National Crisis of Access and Affordability (Continued)  Increasing number of middle-class families can’t afford to send their kids off to college.  This crisis has exacerbated the traditional problem of access and affordability for first-generation/low-income/minority students.

5 II. The Spellings Report Regarding access---three factors:  Inadequate preparation for college-level work.  Lack of information about college opportunities.  Persistent financial barriers.

6 II. The Spellings Report Regarding these financial barriers:  Current financial aid system does not direct financial aid to students who truly need it.  Need-based financial aid is not keeping pace with rising tuition.  Unmet financial need is a growing problem for students from low-income families who need aid the most.  Over half of today’s undergraduates take out loans to finance part of their college work.

7 III. UM System Undergraduate Financial Aid Summary Report Primarily focuses on three major questions: 1.How many Missouri resident undergraduates receive financial aid and what kind of aid do they receive? 2.Has grant aid kept pace with the increases in educational and required fees? 3.To what extent are Missouri resident undergraduate students’ financial needs met?

8 FY 2001FY 2005 Change from FY 2001 Number Of Undergraduates Who Received Aid 30,44136,112+19% % Of Undergraduates Who Received Aid 71%77%+6% Total Amount Of Financial Aid Awarded $221.7M$327M+48% How many undergraduates receive financial aid?

9 Change from SourceFY01 Federal$123.9M56%$193.8M59%56% State14.9M7%13.2M4%-11% Institutional67.7M31%85.4M26% Private15.3M6%34.6M11%126% TOTAL$221.8M100%$327.0M100%48% Source: DHE14-1 IR&P/LCB 7/06 FY01FY05 Total Undergraduate Financial Aid by Source at the University of Missouri System, FY01 & FY05 What are the major sources of financial aid? e

10 Change from TypeFY01 Grants$102.1M46%$123.8M38%21% Loans 104.8M47%186.5M57%78% Employment 14.7M7%16.8M5% 14% TOTAL $221.6M100%$327.1M100%48% FY01 FY05 Total Undergraduate Financial Aid by Type at the University of Missouri System, FY01 & FY05 Source: DHE 14-1 IR&P/LCB 7/06 What are the major types of financial aid?

11 Has grant aid kept pace with increases in educational and required fees? +36.1% +53.6% +20.5% $13,043 $17,750 $4,806 $7,380 $3,181 $3,833

12 How many Missouri resident undergraduates receive aid and do they have need? 5,947 7,560 11,291 5,366 8,350 14,736

13 How is merit aid distributed at the University of Missouri? 3,610 4,284 4,452 3,920

14 How is merit aid distributed at the University of Missouri? 9.2M 11.4M 11.6M 10.2M

15 The remainder of this presentation focuses exclusively on full-time, degree-seeking, Missouri resident undergraduates that were enrolled for 9-months during the academic year and had a financial need.

16 An Example: How financial aid is determined and distributed.

17 Who gets need-based financial aid by income level?

18 How are students’ financial needs met by income level?

19 How are students’ financial needs met by income-level?

20 Income Level Less than $20,000 $20,000 - $40,000 $40,000 - $60,000 $60,000 - $80,000 $80,000 - $100,000 Greater than $100,000 Source: UIDS IR&P/LCB 7/06 Percent of Full-time 9-Month Undergraduate Missouri Residents who Qualified for Need-Based Aid and had their Full Financial Need Met, FY 2005 To what extent are students’ financial needs met by income level? FY % 14% 22% 39% 49% 56%

21 Summary of University of Missouri Financial Aid Trends Given National Access and Affordability Crisis YesNo Has tuition gone up significantly? Has state funding decreased? Have tuition increases outpaced increases in gift aid? Are students taking out more loans to finance college? Is unmet financial need increasing for low-income students? Have the number of low-income students at the University decreased?

22 References University of Missouri System Undergraduate Financial Aid Summary Report, FY2001-FY2005: ement/rev_report_2006_residents.pdf Final Draft Report of the Commission on the Future of Higher Education: