1. State Council of Higher Education for Virginia 1 VASFAA 2013 Fall Training Workshop SCHEV Update October 4, 2013 Lee Andes Assistant Director for Financial Aid leeandes@schev.edu (804) 225-2614

2. Virginia Tuition Assistance Grant Program

3. FY2013-14 summary: – $3,100 undergraduate ($1,550 per term). – $1,550 graduate ($775 per term). – Early estimates indicate that awards to Category 3 students might be possible. Will confirm in November/December. Make sure you report Categories 3 & 4 accurately. – Graduate programs continue to be restricted to health-related professional programs only. State Council of Higher Education for Virginia3

4. Virginia Tuition Assistance Grant Program The award reductions due to the recession have been nearly undone. The most recent increases were made possible due to lower than projected, and steadily decreasing, changes in TAG participation. State Council of Higher Education for Virginia4 Fiscal Year Annual Award Amount 2004-05$2,500 / $1,900 2005-06$2,500 / $1,900 2006-07$2,750 / $1,900 2007-08$3,200 / $1,900 2008-09$3,190 / $1,890 2009-10$3,000 / $1,300 2010-11$2,600 / $1,130 2011-12$2,750 / $1,200 2012-13$2,800 / $1,300 2013-14$3,100 / $1,550 projected

5. TAG Participation Trends The spike in the first year of the recession proved to be short-lived as TAG participation declined dramatically in subsequent years. The 2011-12 to 2012-13 increase is projected to be close to zero. 5 2.9% 1.4% State Council of Higher Education for Virginia

6. Virginia Tuition Assistance Grant Program The base funding level for FY2014 is $64,812,665. Above are the funding increases needed in order to reach the respective award goals for the next biennium. 2014-152015-16 Projected TAG Award Appropriation Needed Change in FY2014 Appropriations Appropriations Needed Change in FY2014 Appropriations $3,100 / $1,550$65,456,813$644,148$66,938,074$2,125,409 $3,200 / $1,600$67,568,324$2,755,659$69,097,366$4,284,701 $3,300 / $1,650$69,679,834$4,867,169$71,256,659$6,443,994 $3,400 / $1,700$71,791,344$6,978,679$73,415,952$8,603,287 $3,500 / $1,750$73,902,854$9,090,189$75,575,244$10,762,579 $3,750 / $1,800$79,098,343$14,285,678$80,880,196$16,067,531 State Council of Higher Education for Virginia6

7. Virginia Tuition Assistance Grant Program Over the past couple of biennia, SCHEV has reaffirmed a prior recommendation for maximum annual undergraduate awards of $3,500 and $3,750, but - due to the economy - officially requested incremental growth for the program. Uncertain if they will alter that approach at this time. Due to the uncertainty of program participation moving forward, we have moved up the due date for the fall TAG verification form by about one week. This will allow staff to have the most recent data as materials are prepared to guide Council discussion on October 28-29. Current projects are for no more than 2 percent growth. State Council of Higher Education for Virginia7

8. Virginia Student Financial Assistance

9. Virginia Student Financial Assistance Program Increasing scrutiny and some resistance to additional funding for need-based assistance: – Has reached over $158 million which is more than any institution receives in base adequacy funding. – Are the funds going to the institutions most needing it? – Does the model accurately identify the state’s role in affordability? – How should outside scholarships, EFC, and COA allowances be treated? State Council of Higher Education for Virginia9

10. Virginia Student Financial Assistance Program The funding model applies a modified cost of attendance to the most recently available financial aid data file: – 2011-12 data file used for projecting 2014-15 need. – Average sector COA allowances are used so that the differences in need are primarily due to variances in tuition/fee costs and finances of the student body. – Tuition and fee amounts taken from the institution’s six- year plan. State Council of Higher Education for Virginia10

11. Virginia Student Financial Assistance Program The model calculates individual need and then aggregates by institution: – Need computed student-by-student using the data file. – The model recognizes that there are other “stakeholders” and so subtracts 30 percent of the need (20 percent for two-year colleges). – Subtracts EFC and all gift aid except for VSFAP and endowments. – Where necessary, reduces individual need to no more than tuition & fees. – Council then decides what portion of this financial need to address in its recommendation. State Council of Higher Education for Virginia11

12. Total Student Need Total systemic financial need (Cost of Attendance less family contribution and gift aid) = $1.4 billion. After reducing expenses by 30 percent and holding individual need to no more than tuition and fees, the model recognizes just $489 million of total need. 12 Total Student Need Under the Model, 2014-15 1,395,344,771 Need Calculated by the Model Need recognized by funding recommendations. State Council of Higher Education for Virginia

13. Changes in Percent of Need Met 13 VSFAP Appropriations Percent Projected Need Met "Projected " Number of Students with Need for the Year 2007-08108,808,78260.5% 67,077 2008-09117,967,02360.5% 64,419 2009-10127,967,02360.9% 66,103 2010-11127,967,02354.9% 71,033 2011-12141,206,15147.8% 80,044 2012-13149,512,22441.4% 101,636 2013-14158,078,59536.6% 117,461 2014-15158,078,59532.3%126,716 State Council of Higher Education for Virginia

14. The model is not an affordability model and therefore is not capable of determining how much state funding is required in order to maintain affordability. The model’s most useful function is in determining how to best allocate available funds. Council will determine the funding recommendation at its October meeting. Expect a total that is close to $20 million. Expect recommendation of $5 million increase for Graduate financial aid. State Council of Higher Education for Virginia14

15. Two Year College Transfer Grant

16. Reminders: The program requires that students enter into four- year institution by the fall following completion of the Associate degree. Students do not need to submit the VCCS e-mail. Eligibility is based primarily on the final transcript showing completion of Associate degree, 3.0 final GPA, and a note indicating “Check for CTG eligibility” which indicates that the student first pursued a degree no earlier than fall 2007. State Council of Higher Education for Virginia16

17. Milestones and Changes In the five years of operation, over 1,700 students have received an award. Just under $3 million has been awarded. Has been amended to increase the maximum EFC from 8,000 to 9,000 and now to 12,000. State Council of Higher Education for Virginia17

18. What’s Next Proposal to be introduced that would result in eligible students continuing to pay tuition & fees at the two-year college rate while completing their bachelor’s degree at the four-year institution. If enacted, the annual cost of the program would grow from about $1 million to more the $10 million. State Council of Higher Education for Virginia18

19. Tuition & Fee Revenue Used for Financial Aid

20. Student financial aid that derives from no other source than the institution: – Unfunded Scholarships – Tuition Waivers and Tuition Reductions – Tuition & Fee Revenue Used for Financial Aid State Council of Higher Education for Virginia20

21. Tuition & Fee Revenue Used for Financial Aid Rapid Growth: Program gained attention of state policymakers due to its rapid growth and concerns about its impact on middle- income families. Program 108 Non General Fund – FY10 reported $45.9 million – FY11 reported $53.2 million – FY12 reported $67.5 million – FY13 reported $111.9 million HEAC took up a review in 2012. State Council of Higher Education for Virginia21

22. HEAC ad hoc Financial Aid Subcommittee Findings:  Inconsistencies in how the institutions reported these funds within program 108 and within the six-year plans.  A couple of institutions used revenue from in-state undergraduate students to subsidize out-of-state undergraduate students.  Differing definitions of the program made it possible for the institutions to confuse it with Unfunded Scholarships and thus double count the funds.  There was no clear state guidance on the use of the funds. State Council of Higher Education for Virginia22

23. SCHEV Recommendations November, 2012: a.In-state student tuition will not subsidize out-of-state students. b.Students receiving this aid must be making satisfactory academic progress. c.Awards made to students should be based primarily on financial need. d.Institutions should make larger awards to students taking the number of credit hours necessary to complete a degree in a timely manner. e.SCHEV and institutions should work cooperatively to refine and improve the reporting of this approach to providing financial aid. State Council of Higher Education for Virginia23

24. SCHEV 2013 Workgroup James Madison University, Norfolk State University, University of Virginia, Virginia Commonwealth University, Virginia State University, and Virginia Tech As well as: The Department of Planning and Budget, The Office of the Secretary of Education, and Staff from the House Appropriations Committee and Senate Finance Committee. State Council of Higher Education for Virginia24

25. Similarities Between Two Programs Unfunded Scholarships and Tuition & Fee Revenue Used for Aid Both programs have an impact on the institution’s tuition & fee revenue, either: – In the form of foregone tuition revenue (Unfunded Scholarships) or – Are funded through increases in tuition & fee costs Both programs serve to reduce the tuition costs to students. State Council of Higher Education for Virginia25

26. Differences between the programs Unfunded Scholarships: Has specific administrative guidance assigned by the Code of Virginia. Are a form of a “tuition waiver” in that there are no funds supporting it. Tuition and fee revenue used for financial aid: Is funded through increases in tuition & fee revenue. No specific authorizing or controlling state law, but encouraged by state government through: the Higher Education Tuition Incentive Fund, Higher Education Tuition Moderation Incentive Fund, Top Jobs Act and other state initiatives directed primarily towards mitigating increases in tuition costs for low- and middle-income families. State Council of Higher Education for Virginia26

27. Workgroup Recommendations Recommended definitions for Tuition & Fee Revenue Used for Financial Aid, Unfunded Scholarships, and Tuition Waivers in order to separately identify these programs. The committee also recommended reporting protocol that would make clear what the institution should report within: – Program 108 (Higher Education Student Financial Assistance, Non General Fund), – the six-year plans, and – the SCHEV S1/S2 report. State Council of Higher Education for Virginia27

28. Reporting Summary Tuition & Fee Revenue Used for Financial Aid Program 108 - The non general fund portion of program 108 should reflect all planned expenditures. Six-Year Plans - These funds will continue to be collected under the tab for “Financial Aid.” S1/S2 Report - SCHEV will begin collecting data on prior- year expenditures as a cross-reference. Unfunded Scholarships Program 108 - Not to be reported here as it involves no transfer of funds. Six-year Plans - Newly reported under tab “Finance – Tuition Waivers.” S1/S2 Report - Continue to be reported on these reports. State Council of Higher Education for Virginia28

29. Other Recommendations Tangential recommendations from the Workgroup: – to clean up obsolete financial aid language, – make consistent the reporting of students eligible for state-mandated tuition waivers, – Make consistent the administration of financial aid funds for student employment, and State Council of Higher Education for Virginia29

30. Collaboration Recommendations were vetted through all public institutions: – Finance policy staff – Financial aid offices Prior to the formal submission and adoption by Council in July 2013. State Council of Higher Education for Virginia30

31. Summary The work completed to date by Council provides a baseline for identifying and reporting of “tuition and fee revenue for financial aid” so that the scale and impact of the funds can be better understood and to better inform future policy discussions concerning this program as well as Unfunded Scholarships. State Council of Higher Education for Virginia31

32. And Finally…

33. New Web Resource Coming http://research.schev.edu/studentdebt/d01_debtreport.asp Currently embargoed but released to the institutions. State Council of Higher Education for Virginia33

34. State Council of Higher Education for Virginia Questions ?