Packaging

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

Learning Objectives

So what IS packaging?• 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)

Funds we typically package

• 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

• 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

Estimated Financial Assistance

STEPS TO PACKAGING

Steps to Packaging1. 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

Packaging Steps: STEP 1

• Determine the COA & EFCA typical COA

consists of*o Tuition & Feeso Books & Supplieso Room & Boardo Transportationo Personal Expenses

EFC comes from…?

* COA amounts are determined by the institution & could include PJ adjustments

Packaging Steps: STEP 2

• Award PELL Grant• Pell Grant awarded based on EFC

– Pro-rated based on enrollment status and EFC range

Packaging Steps: STEP 3• Calculating Student’s Remaining Need

Cost of Attendance-- Expected Family Contribution-- EFA_____________________________

Initial Need-- PELL award (if any)_____________________________

Remaining Need to package other funds

Packaging Steps: STEP 3

• Calculating students’ non-need eligibility

Cost of Attendance-- PELL-- EFA-- Need-based aid awarded________________________________

Room for non-need based aid

Packaging Steps: STEP 4

• 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

Packaging Guidelines

• 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

Goals of an Administrator

• 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!

Packaging Categories

• 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

Packaging Sequence

• 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

Six Basic 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

First Come, First Served

• 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

• 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

• 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

Targeted Groups

• 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

Equity Concept

• 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

Individualized

• 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

Which Should You Use

• 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

• 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

Packaging Example: Self Help

• 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 $20,000EFC $500Scholarship $2,500 Pell Grant $5,325

AWARD MAXIMUMSPerkins $1,500Work Study $3,000Institutional Grant $3,000 Direct Loan $7,500

Packaging Example: Self Help

- Cost of Attendance 20,000

- EFC (500)

Need 19,500

- Pell (5,325)

- EFA (Scholarship) (2,500)

- Remaining Need 11,675- Work Study (3,000)

- Subsidized Loan (5,500)

- Perkins (1,500)

- Remaining Need before grants

1,675- Institutional Grant (1,675)

- Unmet Need ZERO

Other aid eligibility? $500 in unsubsidized loan

Packaging Example: Self Help

• 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

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

Notifying Students of Awards

• 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

Wrapping Up

• 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 ParkoffFinancial Aid AdvisorTexas A&M Universityaparkoff@tamu.edu