Transcript Policy interactions between student financial aid and public benefits

Policy interactions between student
financial aid and public benefits
programs
Student Financial Aid Research Network
Amy Ellen Duke-Benfield, Senior Policy Analyst
June 14, 2012
Project
• Most low-income students have unmet need, even after
receipt of financial aid
• Receipt of public benefits, in addition to financial aid, could
help decrease unmet need
• Want to ensure students have sufficient resources to persist
and complete college
• Goals of the project:
 Better understand the interactions between financial aid and
public benefit programs
 Identify policy opportunities at federal and state levels to
enhance access to financial aid and public benefits
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Three Main Areas of Research
Looking at the intersection of public benefits, college
attendance, and receipt of financial aid
• Implications of college attendance on eligibility for
public benefits
• Treatment of public benefits by financial aid programs
• Treatment of financial aid by public benefits programs
• Packaging and sequencing of aid and public benefits
• Presenting interim findings today
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Programs Examined: Financial Aid
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Pell Grants
Federal Supplemental Educational Opportunity Grants
Federal Work Study
Perkins loans
Stafford loans
State financial aid programs (including need-based
state grant aid and work study)
• Institutional aid
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Programs Examined: Public Benefits
• Supplemental Nutrition Assistance Program (SNAP,
formerly Food Stamps)
• Temporary Assistance for Needy Families (TANF; cash
welfare)
• Child care subsidies--funded through the Child Care
Development Block Grant, (CCDBG), Social Services Block
Grant (SSBG), etc.; vouchers and reimbursements
• Medicaid
• State Children’s Health Insurance Program (SCHIP)
• Unemployment Insurance benefits (UI)
• Trade Adjustment Act Assistance (TAA)
• Workforce Investment Act Individual Training Account
vouchers (WIA)
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Programs Examined: Tax Credits
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American Opportunity Tax Credit (AOTC)
Lifelong Learning Credit
Earned Income Tax Credit (EITC)
Child Tax Credit
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Methodology
• Federal level
 Review of laws, regulations, and policy guidance
• State level:
 Looked at 3 states
 Review of laws, regulations, policy guidance
 Interviews with public benefits and financial aid program
administrators with focus on interpretation of laws, guidance
 Caveat: Not a comprehensive scan of the inner workings of
three states, though
• Local level
 Interviews with aid administrators at low-cost, public colleges;
WIB administrators; county public benefits administrators in
state with county-level governance; focus on interpretation
and implementation
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Are Postsecondary Students Even Eligible
for Public Benefits?
• TANF
• SNAP
• WIA
• TAA
• Unemployment Insurance
• Child Care (next slide)
• Are we maximizing access for students?
 Oftentimes a matter of will, sometimes of resource
constraints
 In those areas that eligibility is limited: Can eligibility be
expanded?
 In those areas where eligibility exists but is underutilized:
Are states and others taking full advantage of potential
for attendance?
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Child care: Eligibility Implications of College
Attendance and Receipt of Financial Aid
• Title IV aid not addressed in Child Care Development
Block Grant (CCDBG) law.
 CCDBG is main funding source for child care subsidies
 States determine eligibility
 Q: Does the state have a shortage of resources, operate
out of a notion of scarcity or treat child care as a
necessary support for attending postsecondary?
• The federal flexibility in CCDBG leads to state-level
variation in:
 Eligibility,
 Treatment of financial aid, and
 Ability to receive additional aid.
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Treatment of Financial Aid by Public
Benefits Programs
• According to the Higher Education Act, Title IV HEA
Federal or Bureau of Indian Affairs financial
aid/educational assistance should not count as income
for means-tested benefits programs
 The exemption can apply to state financial aid that is
funded in part by federal funds
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How Title IV Programs Treat Benefits in
Determining Financial Aid Package Size
Not
considered
AOTC
X
EITC
X
Not
mentioned
Count as
income
Child care
Child Tax Credit
X
X
Medicaid
X
SCHIP
X
SNAP
X
TAA
TANF
X
X
UI
WIA benefits
Treatment
ambiguous
X (with
exceptions)
X
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Treatment of State Aid by Public Benefits
Programs Varies
• State financial aid and state work study does not always
receive the same treatment as federal aid
• Special case: SNAP & financial aid
 Follows federal law for federal programs
 Treatment of state financial aid can vary whether used for
direct or indirect educational expenses
 Some confusion at state level regarding options states have to
disregard state-funded and TANF-funded work study in SNAP
o What opportunities exist to educate states about their
options?
o Are state agencies communicating with one another about
what the federal rules are in their respective areas?
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Importance of Packaging and Sequencing
of Financial Aid
• For public benefits and workforce programs, generally
found that receipt of financial aid does not affect
eligibility or benefit levels
• Yet, how aid is combined and sequenced in that
eligibility determination can matter
• What signals can states send to support college
attendance and completion?
 Through policy in public benefits and financial aid
programs
 Through professional development for financial aid
administrators and local program administrators
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Importance of Packaging and Sequencing
of Financial Aid
• How aid is combined and sequenced at the institutional
level matters
 Combining federal and state financial aid with thirdparty sources, such WIA, TAA, or other workforce
funding, can decrease loans in the package
 Third-party sources, including state-funded retraining
dollars, can serve as a stopgap for students applying for
aid late until a financial aid determination is made or if
program or student is ineligible for Pell
o Both workforce training and state-funded retraining dollars
tend to be quite limited, though
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Importance of Packaging and Sequencing
• HEA and WIA rules are somewhat contradictory
 HEA: federal student aid cannot be counted in determining
eligibility or need in other federal benefit and assistance
programs
 Yet, WIA requires local administrators to take Pell Grants and
other forms of grant assistance into account when determining
eligibility for WIA-funded training services; how they do so
varies
• How can colleges and workforce boards coordinate the
packaging of aid so it best benefits students?
• What processes can be developed for workforce staff to get
better information on financial aid and what programs are
Title IV eligible, and to ensure clients apply for student aid?
• How can workforce funds better compliment student aid?
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Closing Questions
• How can federal and state public benefits policies better support
the pursuit and completion of postsecondary education?
• How can colleges be more intentional about packaging various
forms of assistance to help students cover unmet need?
• What strategies can colleges use to better connect students to the
public benefits for which they are eligible?
• What messages do states send that either encourage or
discourage sequencing and packaging of aid that helps students
cover unmet need?
• Are state agencies communicating sufficiently with each other so
public benefits rules adequately reflect options to disregard aid?
• How can the federal/state governments and colleges ease burden
of verification on students receiving public benefits?
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