February 9, 2011 New York State Legislative Office Building Albany, New York

New York State Financial Aid Administrators Association, Inc.

Investing In New York’s Future – College Financial Aid

A Workshop for Members and Staff of the NYS Legislature

February 9, 2011February 9, 2011New York State Legislative Office BuildingNew York State Legislative Office Building

Albany, New YorkAlbany, New York


Higher Education ROIHigher Education ROINYSFAAA Legislative Training SessionFebruary 9, 2011James W. Gathard


Higher Education ROI

VALUE PROPOSITION

Educational capital has a direct impacton the state’s social and economic health.



FINANCIAL - VALUE PROPOSITION

As educational attainment increasesfinancial dependency on government decreases.


Percentage of Individuals Ages 25 and Older Living in Households that Participated in Various Public Assistance Programs, by Education Level,

2008

Sources: The College Board, Education Pays 2010, Figure 1.15; U.S. Census Bureau, 2009; calculations by the authors.



Employer-Provided Pension Plan Coverage Among Full-Time Year-Round Workers Ages 25 and Older,

by Education Level, 2008

Sources: The College Board, Education Pays 2010, Figure 1.12a; U.S. Census Bureau, 2009; calculations by the authors.



Unemployment Rates of Individuals Ages 25 and Older, by Education Level and Race/Ethnicity, 2009

Sources: The College Board, Education Pays 2010, Figure 1.10b; Bureau of Labor Statistics, 2010c.




• “If you are a college graduate, unemployment is five percent. If you are a high school graduate, it is 10 percent or more. It is a very big difference.”

• Excerpt form Ben Bernanke’s Take on the Economy – CBX News, December 2, 2010.


Expected Lifetime Earnings Relative to High School Graduates, by Education Level

Sources: The College Board, Education Pays 2010, Figure 1.2; U.S. Census Bureau, 2009; calculations by the authors.




Educational Capital Investment Outcomes



Global Performance (OECD*)

• USA leads the world in the percentage of its population aged 55 to 64 with college degrees

• USA ranks 18th in college graduation rates

• USA ranks 21st in high school graduations rates

• USA ranks 1st in college dropout rates*Organization of Economic Co-operation and Development 31 democracies and free market countries in NA, Europe and Asia


Postsecondary Enrollment Rates of Recent High School Graduates by Family Income, 1984–2008

Sources: The College Board, Education Pays 2010, Figure 2.1; National Center for Education Statistics, 2010.



Annual Percentage Changes in State Appropriations for Higher Education per Full-Time Equivalent (FTE) Student and in Tuition and Fees at Public Four-Year

Institutions in Constant 2009 Dollars, 1979-80 to 2009-10

SOURCE: The College Board, Trends in College Pricing 2010, Figure 10A.



Mean and Median State Appropriations for Higher Education per $1,000 in Personal Income, 1989-90 to 2009-10

SOURCE: The College Board, Trends in College Pricing 2010, Figure 11A.



State Appropriations for Higher Education per $1,000 in Personal Income by State, 2009-10 (including Federal Stimulus

Funds)

SOURCE: The College Board, Trends in College Pricing 2010, Figure 11B.




Shift Happens



Gaps in Educational Levels of New York’s Working-Age Population (ages 25 to 64)



U.S. educational pipeline by race/ ethnicity



Source: U.S. Census Bureau, 5% Public Microdata Samples (based on 2000 Census).

The greatest portion of U.S. population growth from ages 0 to 44 is projected to be among minorities.



Gaps in Educational Levels of New York’s Working-Age Population (ages 25 to 64)


Labor Force Participation Rates Among Individuals Ages 25 and Older, by Gender and Education Level, First Quarter 2010

Sources: The College Board, Education Pays 2010, Figure 1.8b; Bureau of Labor Statistics, 2010e.




Source: National Center for Higher Education Management Systems (NCHEMS).


Investment Recommendations

Close K-16 gaps Communicate “value”; early and often Simplify FA process Shift loan subsidies



Questions?Questions?


Federal Financial AidFederal Financial AidNYSFAAA Legislative Training SessionFebruary 9, 2011Dan Sistarenik


How To Apply For Federal How To Apply For Federal Financial AidFinancial Aid


Federal Financial AidFederal financial aid is awarded in the form of:

• Grants• Work programs• Loans

In order to qualify for any of these federal programsthe student must complete the FAFSA (Free Applicationfor Federal Student Aid) at www.fafsa.ed.gov


Federal Financial Aid

Federal financial aid is awarded to students based on the following equation:

Cost of attendance - Expected Family Contribution Financial Need


Federal Grants

Grants are funds that are awarded and do not have to be repaid. The following educational grants are available from the federal government:• Pell Grant• Federal Supplemental Educational Opportunity

Grant• Teacher Education Assistance for College and

Higher Education Grant (TEACH Grant)


Federal Grants continued • Iraq and Afghanistan Service Grant

For children whose parent or guardian was a member of the U.S. Armed Forces and died as a result of service performed in Iraq or Afghanistan after September 11, 2011 may be able to receive this grant.


Work Programs

Federal College Work Study Students who are awarded these funds

earn the funds through jobs either on campus or off campus. The award is limited to a specific dollar amount and is based on financial need.


Federal Student Loans• Federal Direct Student Loans – loans where

the federal government serve as the only lender. Students must repay these loans.

Subsidized - the interest on the loan is subsidized by the federal government while the student is enrolled for at least 6 credits and for 6 months after the student either graduates or drops below 6 credits. 4.5% interest for loans during the 2010 – 2011 year.


Federal loans continued

Unsubsidized – the federal government does not pay the interest while the student is enrolled. The student either makes quarterly interest payments or the interest is capitalized. Interest rate is 6.8%.


Federal loans continued• Direct Parent Loans for Undergraduate

Students- this is a credit worthy loan from which parents can borrow. The parent, if approved, can borrow the entire cost of attendance minus any financial aid the student receives. The loan is fully unsubsidized, meaning interest is accruing while the student is enrolled. Interest rate of 7.9%.


Federal loans continued

• Federal Perkins Loans – these loans are from monies allocated to schools to award to students who have significant financial need. The loans are fully subsidized and when the loans go into repayment (9 months after the student has graduated or dropped below 6 credits), the interest rate is fixed at 5%.


New York State Financial Aid New York State Financial Aid Institutional and Private AidInstitutional and Private Aid

NYSFAAA Legislative Training SessionFebruary 9, 2011Shirley Clark


How To Apply For New York State How To Apply For New York State Financial AidFinancial Aid


New York State (NYS) AidNew York State Aid is available for NYS residents attending NYS Institutions that meet eligibility

criteria in the form of:• Grants (TAP) • Scholarships• NYHELPs LoanIn order to apply for TAP you must complete a

application which can be found as a LINK on the submission page of the Federal FAFSA.


What is TAP?The New York State Tuition Assistance Program (TAP)

helps eligible New York residents pay tuition at approved schools in New York State. TAP is the largest entitlement state student grant program in the nation.

An annual TAP award can be up to $5,000 depending on when you first receive state aid, and because TAP is a grant, it does not have to be paid back.


TAP Eligibility Criteria• Must be a U.S. citizen or eligible noncitizen & a

legal resident of New York State • Have graduated from high school in the United

States, earned a GED, or passed a federally approved "Ability to Benefit" test as defined by the Commissioner of the State Education Dept.

• Matriculate in an Approved Program of Study at an Approved Postsecondary institution in New York State (This includes declaring a major in required time frame for undeclared acceptance)


TAP Eligibility Criteria• Be enrolled as a full-time student taking 12 or

more credits per semester • Meet the NYS Net Taxable Income limitations• Not be in default on a Student Loan• Tuition charged must be at least $200 a year• Remain in Good Academic Standing for State Aid


Factors in Determining TAP Awards• First Year State Aid is Received • Type of Institution and the Tuition Charged • Combined family NYS taxable income and

Federal, State or local pension income (for 2010 academic year add private pension and annuity amount excluded in 2009), if applicable.

• Financial Status (Dependent or Independent) • Other Family Members Enrolled in College


New York State Scholarships• NYS Higher Education Service Corporation (HESC)

administers all the New York State Aid programs including the New York State Scholarships

• Applications for NYS Scholarships can be found on HESC s Website under the following link:

http://www.hesc.com/content.nsf/SFC/Grants_Scholarships_and_Awards


What is a NYHELPs Loan?• NYHELPs is a state-sponsored, supplemental loan

program administered by New York State. • It is available to eligible borrowers that have

applied for and accepted all of the State, Federal and Institutional Aid for which they were eligible, however still need more funding to attend college.

• Available only at participating colleges.


New York State Aid FundingPost Secondary New York State Aid funding is

part of the New York State Budget Process each year:

• Governor proposes budget• Assembly can counter-propose new budget • Governor can Veto items• Senate can vote to override the Vetoes


Institutional and Private AidInstitutional and Private Aid


Institutional and Private AidCheck with the Admissions and the Financial Aid officesat schools where students may be applying to orcurrently attending to get information on financial aidoffered by the school and/or other private resourcesthat offer student financial aid for higher education.


Institutional and Private Aid• Each Institution may have their own Scholarship programs

• Private entities and corporations may have various scholarships they endow

• There are various Private Alternative Loan products availablefrom lending institutions


Systemic RetentionSystemic RetentionNYSFAAA Legislative Training SessionFebruary 9, 2011Dr. Kenneth Clough


What is Systemic Retention?Systemic retention often refers to individual studentretention in higher education across varying institutions.

New and Expanded DefinitionSystemic retention is the ability of a state toattract, educate, and retain citizenry for theeconomic and common benefit of the state.


Dimensions of Systemic Retention

• Attracting, retaining and graduating students in higher education.

• Attracting, retaining and graduating students as citizens of New York State.

• Attracting, retaining and graduating students as economic contributors in New York State.


Why is Systemic Retention Important?• Improved retention optimizes the student’s

investment in higher education.• Improved retention optimizes the taxpayer

investment in higher education.• Improved retention optimizes an institution’s

investment in the education process.• Improved retention optimizes New York

State’s economic vitality.


Improving Student Retention

• Multiple factors contribute to improved student retention– Academic preparation before attendance– Academic support during attendance– Funding – direct, indirect, and financial aid– Student support from family and friends


Systemic Retention is a Partnership• The Student – a commitment and

understanding of the education process.• The Institution – provides academic programs,

academic support, financial assistance.• New York State – provides direct support,

indirect support, financial aid, policy direction and guidance with an ability to have a broad perspective.


Systemic Retention Policy Needs

• Identification and recognition of systemic retention needs and potential outcomes.

• Academic preparation – are students entering higher education prepared?

• Funding – direct aid, indirect aid, and student financial aid are essential.


NYSFAAA and Systemic Retention

• Contributions of NYSFAAA to Systemic Retention– Early awareness of higher education– General financial aid awareness– Extensive personal student interaction– Uphold high academic standards through

satisfactory academic progress


Default Prevention and ManagementDefault Prevention and ManagementNYSFAAA Legislative Training SessionFebruary 9, 2011Michael Williams


Default Prevention Tools

• Various Loan Repayment Options• Forbearance• Deferment• Loan Consolidation• Financial Literacy Training


Student Loan Default

• -Default occurs on a student loan after a loan delinquency has persisted for 270 days

• -During a student loan borrowers delinquency period, the loan holder must exercise "due diligence" in attempting to collect the loan


Student Loan Default (cont’d)

• “-Due Diligence” includes repeated efforts to locate and contact a borrower regarding their loan delinquency

• -If the loan holder’s initial collection efforts are unsuccessful, the borrower is notified and a pre-default claim is filed with the Guaranty Agency or the Dept of Education

• -If the delinquency remains unresolved, a default claim is being filed with the guaranty agency or Dept of Education, which “purchases” the student loan


Consequences of Default

• Once a student loan is purchased, the following steps may be taken to recover the outstanding balance due:

• The Department of Treasury may offset the borrower’s federal tax refund which is authorized by law. In New York state tax refunds may also be seized.

• A borrower will be required to pay additional collection costs

• A borrower may be subject to Administrative Wage Garnishment- a borrower’s employer will be required to forward up to 15% of the bor’s disposable pay toward repayment of the defaulted loan


Consequences of Default (cont’d)

• Federal employees face the possibility of having 15% of their disposable pay offset by the Department toward repayment of their loan through Federal Salary Offset

• Legal action may be taken to force a borrower to repay their loan adding add’l court costs

Credit Bureaus will be notified damaging the borrowers credit rating

•


Default: Loss of Financial Aid Eligibility

• Once a loan is declared in default, a borrower is no longer eligible for additional federal or NYS financial aid

• Reference Source: http://www.2.ed.gov/offices/OSFAP/DCS/default.html


Resolving a Default thru Loan Rehabilitation

• Loan(s) will no longer be considered to be in a default status

• The default status reported to the national credit bureaus will be updated

• Benefit eligibility is restored (such as deferments, forbearance, and Title IV aid)

• Wage garnishment and Internal Revenue Service/state tax offsets cease


How to locate a Defaulted Loan

• Borrowers can call 1-800-4-FED-AID (1-800-433-32431) for the address and telephone number of the agency that holds their defaulted loan(s)

• The National Student Loan Data System (NSLDS) also contains information on the amount and types of loans outstanding

• http://www.nslds.ed.gov/nslds_SA/


Additional Resource Information for Defaulted Borrowers

• Contact the U.S. Department of Education’s Federal Student Aid (FSA) Default Resolution Group at:

• Phone: 1-800-621-3115 • Email: [email protected]• Website http://www2.ed.gov/offices/OSFAP/DCS/index.html


The New York State Financial The New York State Financial Aid Administrators AssociationAid Administrators Association

NYSFAAA Legislative Training SessionFebruary 9, 2011Dan Sistarenik


What is NYSFAAA?Financial Aid Professionals1,371 Members in NYSA Charitable Volunteer AssociationAdvocates for Access for All Students to Post-Secondary EducationEight RegionsTraining of MembersOutreach ActivitiesPartnerships With State and Local AgenciesInformation and Impact Specialists on Financial Aid ProgramsThe NYSFAAA Website is www.nysfaaa.org


Major Partners

1) NYS Grant and Guaranty Agency (NYSHESC)2) NYS School Counselors3) Federal and State Advisory

Boards/Government Relations4) Student Groups5) National Financial Aid Association


NYS Higher Education Services Corporation

NYS Grant and Guaranty Agency Partnership with NYSFAAA Joint Outreach Activities

College Aid Awareness School Counselor Workshops Legislative Training Sessions GEAR UP (Gaining Early Awareness and Readiness for

Undergraduate Programs) New York HELPs The HESC website is www.hesc.com

February 9, 2011 New York State Legislative Office Building Albany, New York

Documents

Transcript of February 9, 2011 New York State Legislative Office Building Albany, New York