Quality in Student Financial Aid Programs A New Approach (1993) / Chapter Skim
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3 Overview of Student Financial Aid Programs
3 Overview of Student Financial Aid Programs
Pages 35-46
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From page 35... ...
The three types of aid are: · gift aid grants and scholarships, which need not be repaid; · employment- part-time jobs, which enable the student to earn part of his or her educational expenses; and · loans funds that have to be repaid, almost always with interest, but usually not until the borrower is no longer attending school. Student aid programs originate from one of four sources: · postsecondary institutions · state government · federal government · private foundations or organizations outside the school Figure 3-1 shows the amount of financial aid awarded from these sources for academic year 1991-92.
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From page 36... ...
For administrative ease, however, some institutions choose to follow federal rules in awarding their own funds. State Aid Programs Many of the grant programs administered by states were initiated or encouraged under the federal State Student Incentive Grant Program, which provides matching funds for state financial aid programs.
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From page 37... ...
Federal Title IV Programs Federally funded student financial aid is made available largely through Title IV of the Higher Education Act. Title IV programs comprise Federal Pell Grants, Federal Campus-Based Programs, and Federal Family Education Loan Programs.2 Federal Pell Grant Program Pell grants provide aid to undergraduates, which does not have to be repaid.
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From page 38... ...
Federal Family Education Loans The Federal Family Education Loan Program, formerly Guaranteed Student Loans, encompasses three programs: Stafford loans, Supplemental Loans for Students, and Parent Loans for Undergraduate Students. These loans provide the largest amount of student aid funds administered by the federal government and are classified as guaranteed because the lender is assured of payment (by the federal government)
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From page 39... ...
are administered by the Department of Education. Because the Federal Campus-Based Programs have not grown much in real terms since their inception in the mid1960s, the Federal Family Education Loans and the Federal Pelt grant program have gradually become the main sources of federal student aid.
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From page 40... ...
FEDERAL STUDENT FINANCIAL AID RECIPIENTS Initially, the federal student aid programs were designed solely to provide funds for postsecondary education to students who could not otherwise attend because of their parents' financial circumstances. Over the years, programs and funding were expanded to broaden the goal to include choice among the institutions offering the student's intended course of study.
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From page 41... ...
ELIGIBILITY In student financial aid programs, eligibility has a number of meanings, depending on who or what is being considered. The most common use of the word concerns student eligibility.
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From page 42... ...
To receive student financial aid administered by the Department of Education, a student must meet all of the following criteria: · be a U.S. citizen or eligible noncitizen · be enrolled or accepted for enrollment on at least a half-time basis3 at an eligible institution in an eligible program of study · if required, register with the Selective Service and file a statement indicating Selective Service registration status · file a Statement of Educational Purpose stating that all funds received will be used solely for educational purposes · maintain satisfactory academic progress in the program · not be simultaneously enrolled in elementary or secondary school · not have had federal benefits suspended or terminated as a result of a conviction for a drug offense · not be in default on a previous federal educational loan or owe a repayment on a previous federal educational grant · not have borrowed in excess of federal loan limits Some federal aid programs have additional eligibility criteria that are specific to the particular program.
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From page 43... ...
At this point, some students still require aid, and they often resort to higher interest loans. THE AWARD PROCESS As an introduction to the student financial aid process, the panel reviewed a flowchart of the Federal Family Education Loan Program.
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From page 44... ...
/ ~ | Form input for Pell grants ~ \; Form input for campus-based programs | | | and loans l Corrections made Central Processor Edits and produces Student Aid Report (SAR) 1 _ 1 Student Review of SAR Makes corrections, if I If correct, needed, and returns | send to \~ Institution · Validates data of selected applicants · Determines eligibility Determines cost of attendance · Determines availability of campus-based program funds Determines award package Institution Uses approved methods to determine need; most schools use a processor for this calculation ~ r Department of Education/Lender .
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From page 45... ...
the Department of Education's processing contractors as they input data, edit data, request corrections from applicants, and try to predict applications that are prone to error; (c' institutions as they labor to help students under tight time frames and a myriad of activities; (d) lenders as they work with an additional application process; and (e)
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