Quality in Student Financial Aid Programs A New Approach (1993) / Chapter Skim
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5 Alternative Perspectives on Quality in Student Financial Aid Programs
5 Alternative Perspectives on Quality in Student Financial Aid Programs
Pages 83-116
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From page 83... ...
Each viewpoint, however, constitutes an important dimension of the "total picture" of quality in the student financial aid system. SURVEYS OF ERROR Thus far, the sole attempts to measure errors throughout the student financial aid system have been through a sequence of special surveys of aid 83
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From page 84... ...
Repeated in 1977 and 1980. Report of Student Financial Assistant Group.
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From page 85... ...
Each of these studies presents information on error by program, classified by student and institutional error. The studies reviewed indicate that error in the Title IV student financial aid programs is sizable and persistent.
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From page 86... ...
86 -= _ ._ Go ~or o ~ Do o _ Ct _ ~ ~ ~Do o ~ ~ o EN ~_ = s ~of to ~ ~Cal ~ Do ._ _ ~o _ ~ ~oo > ~ ~- ,~ US ~ Go ~ ~ ~ 3 ~¢ [11 ~_ ~Cal _ ~ ~ O ~ ~ Cal - Cal ~ O Ce .
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From page 88... ...
88 QUALITY IN STUDENT FINANCIAL AID PROGRAMS TABLE 5-3 Components of Student and Institutional Error in the Pell Grant Program Academic Year Error Item $ Error (millions) Student error 1982-83a Dependency status 64 Other nontaxable income 46 Household size 34 Number in postsecondary schools 24 Home equity 18 Assets of dependent students 17 Adjusted gross income of parents and independent students 16 Income of dependent students 12 Taxes paid 2 1985-86b Other nontaxable income 75.1 Home equity 64.0 Dependency status 45.4 Dependent students' net assets 35.5 Students' expected income 32.6 Household size 29.9 Adjusted gross income 20.6 Number in college 18.4 1988-89C Parents' number in college 72 Parents' household size 70 Parents' home value 47 Students' 1987 adjusted gross income 44 Parents' real estate/investment value 32 Students' household size 31 Students' 1987 other nontaxable income and benefits 24 Parents' 1987 adjusted gross income 24 Institutional error 1982-834 Missing financial aid transcript 95 Incorrect determination of enrollment status -39 Incorrect calculation or disbursement of award 24 Incorrect determination of cost of attendance -21 1985 -86e Missing financial aid transcript 41.2 Missing Selective Service compliance statement 30.5 Missing statement of educational purpose 28.1 Award to students with bachelor's degree 13.6 Incorrect determination of enrollment status 9.6 Incorrect determination of cost of attendance 8.3 Loan default 4.7 Incorrect calculation or disbursement of award 3.7 continued
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From page 89... ...
. fThese numbers are rough estimates based on those values found on the graph (Price Waterhouse, 1990b:Exhibit III-2, p.
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From page 90... ...
aThese numbers are rough estimates based on those values found on the graph (Price Waterhouse, 1990b:Exhibit III-1, p.
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From page 91... ...
The panel will focus here on the award error components, since audits of financial administration were already discussed. As can be seen from Tables 5-3 and 5-4, technical errors, such as a missing statement of purpose, certification of Selective Service registration, or financial aid transcript, have a large dollar impact, for when these documents are found to be missing, their absence renders the entire award erroneous.
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From page 92... ...
Estimated Error The IQCMP provides estimates of errors of overpayment and underpayment in the distribution of Pell grant and Campus-Based financial aid, and estimates of overaward errors in Stafford loans. The errors are reported in absolute terms that is, both under- and overawards are assigned positive
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From page 93... ...
For example, an overaward resulting from a student or family incorrectly projecting household size is counted as an error in the IQCMP, whereas a good faith error of this type is not an error under the Title IV regulations. Other cases were labeled as error because of discrepancies between federal regulations and state or institutional rules.
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From page 94... ...
There is no indication in the IQCMP report that measurement error and its effect on accuracy were either controlled or est~:mated after the fact. Recommendation 5-3: Future studies commissioned for student financial aid programs should consider carefully and discuss the problems that result from errors of measurement.
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From page 95... ...
Thus, the final effect of the seeming elegance of the design on the precision of estimation is not clear.3 2The 50 institutions participating in the quality control pilot project (to be discussed in detail in Chapter 8) were considered to be selected at a first stage with certainty, and students were selected separately from each of the three programs proportionate to the program totals within each institution.
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From page 96... ...
The panel wonders whether consideration was given to those approaches and if so, why they were rejected. Software that computes estimates and estimated standard errors consistent with survey designs like that used in the IQCMP, such as SUDAAN or PC CARP, is available for personal computers.4 Recommendation 5-4: In future sample surveys commissioned by the Department of Education, the final report should contain estimates of sampling error for all important estimates.
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From page 97... ...
. Similarly, the Executive Summary cites student's adjusted gross income as the most significant source of student marginal error in Stafford loan overcertification error.
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From page 98... ...
In the next section the panel will urge the department to go a bit further and try to ascertain the extent to which students who would have been eligible for aid had they applied nevertheless failed to apply, perhaps because of the perceived difficulty of the application process or perhaps because of ignorance of the available programs. Recommendation 5-5: The Department of Education should improve estimates of "error" by including estimates of the coverage of student financial aid programs, that is, ascertaining the frequency with which eligible applicants are mistakenly deniedfinancial aid and the underaward amounts associated therewith.
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From page 99... ...
The panel believes that the relevant information for informed policymaking can be gleaned from the surveys that historically have been used for estimation of aggregate error, but the methodological problems with the surveys and apparent limitations on the ability of student financial aid program managers in the Department of Education to detect and criticize the shortcomings leads the panel to make the following recommendation: Recommendation 5-6: The Department of Education should not routinely embark on surveys of the type that have been used in the past to estimate total error levels in student financial aid programs. The resources are likely to be better spent on continuous monitorin~using data from audit and review activities, for example~nd other approaches to quality improvement.
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From page 100... ...
Recommendation 5-7: The panel commends the Department of Education for its recent efforts to improve early awareness of federal financial aid programs, such as providing financial aid software to high schools. The panel recommends increasing those efforts.
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From page 101... ...
Applying for Federal Student Financial Aid For the 1992-93 award year, students who wished to apply for the Federal Pell Grant, Federal Stafford Loan, Federal Supplemental Educational Opportunity Grant, Federal Work-Study, or Federal Perkins Loan programs could make application in one of three ways: · Students could complete the Application for Student Financial Aid (AFSA) produced and distributed by the Department of Education.
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From page 102... ...
· In the 1990-91 award year, the Department of Education introduced the Electronic Data Exchange application process. This process, which is available at an expanding number of schools, enables participating schools to enter and review federal student financial aid application data using a personal computer or mainframe computer.
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From page 103... ...
For example, the Student Guide describes federal financial aid programs and discusses key eligibility requirements and borrowers' rights and responsibilities. It also lists telephone numbers for Federal Student Aid Information Centers, numbers that are not given or referred to in the AFSA packet, where the need is probably much greater.
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From page 104... ...
The student aid application form is probably the most complicated financial form they have ever seen." · "We agree that this form and accompanying instructions are exacting and complex due to the myriad of financial requirements which must be documented by law. As a result, student-level applicants and low-income parents are likely to encounter much difficulty in both understanding and completing the AFSA." · "I found the form to be difficult to follow.
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From page 105... ...
Those suggestions included using routine activities to gather information on problems applicants are having with the form, engaging in research on the effects of variations in forms on respondents, and reviewing comparable benefit application forms as a means of improving the forms used to apply for federal student financial aid. The panel concurs with those recommendations and believes that, over a decade later, they should be implemented by the Department of Education.
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From page 106... ...
Electronic Version of the 1992-93 AFSA In addition to examining the paper versions of the AFSA and the SAR, the panel also reviewed the Department of Education's Electronic Data Exchange application process- also known as Stage Zero (for details of this review, see Appendix C)
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From page 107... ...
Using this system, financial aid personnel can calculate an expected family contribution using the Congressional Methodology. Other financial calculations, such as an estimated Pell Grant Index for determining Pell eligibility, as well as an estimated Pell award amount, can be calculated (the Congressional Methodology and the now unused Pell Grant Index were discussed in Chapter 3~.
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From page 108... ...
Moreover, the use of Stage Zero is currently limited to postsecondary educational institutions participating in student aid programs. However, a slightly modified version of the software might be appropriate for off-campus use.
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From page 109... ...
From an original promise to administer the Fell eligibility requirements centrally, the government has moved to an increasingly complex student aid report, which must be verified by school personnel. The addition of information unrelated to student need, such as Selective Service status, resulted in a form which has grown from two pages to four.
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From page 110... ...
Administrative Cost and Regulatory Requirements Federal and Local Costs The program of oversight of the federal student aid programs appears to impose unreasonably high costs for inspection of processes. Contributing to the high costs of inspection are layers of redundant review.
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From page 111... ...
Thus, the states add their own regulations. It is possible that the level of state regulation has been minimized due to the high burden on institutions and on the states themselves from federal student aid regulation.
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From page 112... ...
The Higher Education Act, which authorizes funding for federal student financial assistance, is reauthorized every six years. If changes in the student aid programs were limited to a six-year cycle, the process could be
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From page 113... ...
verification of data used to award Pell grants, guaranteed student loans (GSLs) , and all federal Campus-Based aid; increased Pelt program reporting and documentation; · implementation of a determination of satisfactory academic progress; multiple disbursements of Guaranteed Student Loans; implementation of the Supplemental Loans for Students and Parent Loans for Undergraduate Students programs; verification of citizenship; · documentation of independent student status; adherence to changes in the Federal Tax Reform Act, which affected scholarships and grants; new refund and repayment policies; and collection of Selective Service compliance and antidrug statements.
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From page 114... ...
Other issues of concern agreed upon included the manual reporting and recordkeeping requirements associated with the financial aid transcript and Student Aid Report, and the burdensome need to collect numerous signed statements from the student regarding illegal use of drugs, educational purpose, and other items. To alleviate much of the burden associated with manually keeping records, Price Waterhouse (1991)
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From page 115... ...
In the 1982-83 academic year, 3 percent of Pell grant recipients received awards in error due to a missing financial aid transcript, and the net estimated error equaled $95 million (General Accounting Office, 1985~. In the 1985-86 academic year, net marginal error due to a missing financial aid transcript was $41.2 million and affected 2 percent of Pell grant recipients; for GSL recipients, 1 percent had categorical errors totaling $142.8 million (Advanced Technology and Westat, 1987b)
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From page 116... ...
With this advancement toward electronic data transfer of student financial aid information, the burden imposed by the collection of student certifications could be greatly reduced and the value returned for these activities could be increased. In general, technical errors are an administrative problem that can be solved by obtaining the appropriate documentation.
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