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