Packaging

How it works

Today we will learn –Definition of packaging –Funds we typically package –Estimated Financial Assistance (EFA) & its affect –Steps to package awards –Packaging categories & sequence –Packaging models –Over-awards –Hands-on example –Notifying students of their awards

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)

Federal programs State programs Institutional programs Pell SEOG Perkins Federal Work Study Direct Loans PLUS Loans Graduate PLUS Loans TEACH Grant Iraq & Afghanistan Service Grant TPEG TEXAS Grant TEG BOT CAL Texas Work Study Graduate PLUS Loans Set Aside Funds

Estimated Financial Assistance (EFA) is taken into consideration when packaging –ROTC living allowances –Scholarships (including athletic & ROTC) –Employer reimbursement of tuition & fees –Tuition and fee waivers –Fellowships and assistantships –Americorps Funds

Exceptions to EFA: –Iraq & Afghanistan Service Grant –Prepaid tuition plan –Federal veteran benefits

STEPS TO PACKAGING

1.Determine the student’s Cost of Attendance (COA) budget & Expected Family Contribution (EFC) 2.Award Federal Pell Grant 3.Calculate the student’s financial need 4.Package campus-based, state, federal, and institutional funds 5.Package or refer students to other supplemental sources of assistance

Determine the COA & EFC A typical COA consists of* o Tuition & Fees o Books & Supplies o Room & Board o Transportation o Personal Expenses EFC comes from…? * COA amounts are determined by the institution & could include PJ adjustments

Award PELL Grant Pell Grant awarded based on EFC –Pro-rated based on enrollment status and EFC range

Calculating Student’s Remaining Need Cost of Attendance --Expected Family Contribution --EFA _____________________________ Initial Need --PELL award (if any) _____________________________ Remaining Need to package other funds

Calculating students’ non-need eligibility Cost of Attendance --PELL --EFA --Need-based aid awarded ________________________________ Room for non-need based aid

Package Campus-based, Federal, State, Institutional –Package other aid programs according to your school’s packaging philosophy/policy –Keep in mind that each school is different!

PACKAGING CATEGORIES & SEQUENCE

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

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!

Schools can organize their packaging categories based on: –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

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

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

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

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

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

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 – be consistent

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

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

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

OVERAWARDS & PACKAGING

Over-awards 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 financial assistance comes in (late scholarship, exemption payment) This is the student’s responsibility to report to us When over-awards happen, we make adjustments

HANDS-ON EXAMPLE

Sally is attending Cowboy College (CC). She is a dependent senior. CC employs a self-help packaging model and awards work study prior to loans. COWBOY COLLEGE COA $20,000 EFC $500 Scholarship $2,500 Pell Grant $5,325 AWARD MAXIMUMS Perkins $1,500 Work Study$3,000 Institutional Grant $3,000 Direct Loan$7,500

- Cost of Attendance20,000 - EFC(500) Need19,500 - Pell(5,325) - EFA (Scholarship)(2,500) - Remaining Need11,675 - Work Study(3,000) - Subsidized Loan(5,500) - Perkins(1,500) - Remaining Need before grants1,675 - Institutional Grant(1,675) - Unmet NeedZERO Other aid eligibility?$500 in unsubsidized loan

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?

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

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

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

QUESTIONS? Angela Parkoff Financial Aid Advisor Texas A&M University