Transcript State Update - NC Association of Student Financial Aid

State Update
Steven Brooks
State Education Assistance Authority
Cherokee, North Carolina
November 2013
Legislative Issues: Limits on grant receipt
• Per program
– UNC NBG, NC NBS, ELS
– Community College Grant
10 semesters
6 semesters
• Coordination among programs required
– 6 full time semesters used at Community College, 4 semesters eligibility left
– Transfer from UNC to private with 5 semesters used, 5 semesters left
• Exceptions
– Part time students get equivalent number of semesters (20 of half time)
– Officially designated 5-year programs  12 semesters
– Institutional waivers: one additional semester IF studies disrupted by
military service obligation, short or long term disability, or another
extraordinary hardship
• Guidance on waivers will be issued by SEAA
Legislative Issues: Full time ... PLUS
• Authority is required to structure grant payment schedules to
encourage completion of average 30 credit hours per year
• Studied using annual total of 30 with a bonus in next year
• Data limitations preclude that strategy
• For now:
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Payment schedules will reflect a new status: Full time PLUS
Aware of your system limitations with status, given federal definition
Will let you report hours enrolled as of a certain date; we will translate
Bottom line: less than now if 12-14 hours and more if 15 and up
Legislative Issues: K-12 at SEAA
• Two new programs
– Opportunity Scholarships - $ 10 million
• Applications by February 1
• Up to $4,200 in tuition expenses
• For non-public schools but not for home schools
– Special Education Scholarship Grants for Children with Disabilities
- $3.67 million
• Applications being processed now
• Reimburses for services as specified by IEP
• For non-public schools and for home schools
• Over 700 private schools statewide
• Electronic process to apply
Education Cabinet
• Presidents Ross, Ralls, Williams; Superintendent
Atkinson; Secretary Wos
• Extended effort chaired by President Ross and State
Board of Education Chairman Bill Cobey – to encourage
greater cooperation and efficiency in education
• Among the many topics being discussed
– Funding for CFNC
– Full time ... Plus to encourage completion
Appropriations for state grant programs
Education Lottery Scholarship
– Eliminates 10% requirement
– Funds at $30.450 million for each year of biennium
UNC Need Based Grant
– $122.5 million for each year of the biennium
– Reduction of 15% ($22 million vs. 2012-13
expenditures)
– Creates a forward funding reserve for UNC Need
Based Grant
Appropriations (continued)
Community College Grant
– $ 15.2 million in 2013-14
– $16.34 million for 2014-15
Need Based Scholarship
– $86.4 million for each year of the biennium
– Increase of $4.5 million (non-recurring)
– Amount roughly covers the loss of ELS
Context of Need Based Aid Appropriations
• In total, grants to needy students down about 15% over
past five years
• Costs of tuition and fees at UNC alone up 40% same
period. Community colleges up even more.
• Looking for ways to improve need based aid? Fund it!
CFNC Update
Jan-Sept 2013
Since inception
# of accounts
342,198
4,930,011
# of applications
299,160
3,400,367
# of transcripts
231,064
1,225,076
Avg. Daily Sessions
10,484
CFNC remains the nation’s gold standard college access portal... And there is more to come!
CFNC and Mytonomy
With a growing video library of over 3,000
videos, students can get advice on
how to succeed in high school, picking the
right college, mastering the college application
process, and much, much more.
Let me tell you ...
Coming late fall 2013... also a mobile app version
Let me tell you ...
NC 529 Update
• Scholarship contest
– $529 in each of 100 counties
– Funded by the State Employees Credit Union
– Entries begin January 2, 2014
– Winners announced 5/29/2014
• Current statistics
– 121,061 accounts
$1.29 Billion
• NC 529 accounts grow tax-deferred (federal and state) and are
tax-free when used for higher education expenses
Shared Services
Federal verification can create negative impact on
• Student enrollment
– Aid delayed is aid denied – defer/reduce enrollment, withdraw
– Verification delays also slow down entire pipeline
• Customer service
– Offices with telephone backlogs, closed for processing, long lines
– Financial aid office seen as police rather than offering access
• Campus cash flow and budgets
– Greater costs to fill seats
– Lower tuition revenue
– Burdens of emergency loans, etc.
• Compliance and liabilities
– Verification is among the top items causing required repayment to USED
Shared Services
Experience from our pilot schools in the verification program
• Student enrollment
– Aid processed more quickly – less than one-third of national average time
– Students with real issues can get through pipeline and get enrolled
• Customer service
– Notable reduction in office visits and phone traffic
– Aid administrators concentrate on those actually needing more help
– Student reports “pleasantly shocked” by ease of process and speed of funds
• Campus cash flow and budgets
– Report 50% more aid ready to disburse at beginning of term versus in house
• Compliance and liabilities
– Fully compliant system and insurance to cover liabilities if errors occur
• High levels of satisfaction and repeat use of system among schools that
piloted the program
Centralized Residency Determination
• S 402 requires UNC, Community Colleges, and SEAA, in
consultation with Independent Colleges, to
– “Develop and implement a coordinated and centralized
process to be used by those ... entities when determining
residency for tuition purposes of students”
• Work on-going this fall
• Final report due to General Assembly by January 1
May opt to take advantage of the technology used by CFI at the
School Servicing Center (verification service) with the data
coming from the CFNC applications for admission plus the online
interview process in “long form” cases
Loan challenges for students
• Costs rising; more students borrowing more money
• Lack of financial knowledge/awareness
• Confusing repayment options
1. Income-based options
• 3 distinct options: ICR, IBR, PAYE
• 11% of borrowers use one of these
2. Extended/graduated options
• 3 distinct options– Extended, Graduated, Extended-Graduated
• 22% of borrowers use one of these
3. Standard 10 year plan
• 66% of borrowers
• Standard is the default option if an alternative is not selected
Loan challenges for schools
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More students borrowing more
Default rates rising
Servicers not paid for serious repayment success efforts
Schools getting blame although not in control
Negative press about price and borrowing
Staff lacks time/resources to manage defaults effectively
But must help students succeed
Must maintain reputation for administrative capability
Need a “default management plan” that really works
Boost repayment success of all borrowers, not just to prevent
some from defaulting
Federal Loan Default Rates
President Obama’s “Plan to Make College More Affordable”
– “Help struggling borrowers”
– Should take advantage of existing infrastructure
– There are entities out there that know how to do this job
FFY 2010
SEAA
Federal
2 year
2.87%
9.1%
3 year
4.62%
13.4%
FFY 2011
SEAA
Federal
2 year
3.05%
10%
3 year
5.73%
14.7%
SEAA default rates about 1/3 of federal average
Financial Education and Repayment Success
Smarter
Borrower
Communications
– Cohort
Students
Financial
Education –
Current
Students
Intensive Counseling –
Seriously Delinquent
Borrowers
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Services are designed to:
• Help schools improve student retention and persistence to
graduation
• Identify and assist students in financial stress
• Help students make intelligent borrowing decisions
• Enhance borrower understanding of repayment choices
• Guide borrowers toward successful repayment of their loans by
finding the most favorable arrangements for them
• Help prepare borrowers for their financial and professional
lives after college ends
• Help schools reduce their cohort default rates
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Understanding My Money
for enrolled students
• A modular, self-directed on-line course that:
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Is targeted to currently enrolled students
Recognizes differences in financial experience in student groups
Tailors education experience to needs of each individual student
Provides analytics to campuses - at risk & financially stressed
Topics include
Financial Basics
Budgeting
Borrowing Wisely
Credit Cards
Identity Theft Repayment Responsibility
Dealing with Financial Trouble
Much more
– Includes core topics to reinforce entrance and exit counseling
• Course materials supplemented with regular emails and texts with
links to timely information
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My Future, My Money
for borrowers as they leave school
• Covers grace period & 1st three years of repayment
– Incorporates “literacy” portions of “Understanding My Money”
• as a review or
• for those who did not complete in school (without analytics)
• Adds financial skills and employment skills, such as:
– What to Do on Day One (filling out tax forms, benefit matching)
– Business Etiquette and Professionalism (dress, dining, email,
attitude, problem solving, networking, even how to leave a job)
– Broader Life Topics (buying a car, home or having a baby, etc.)
• Course materials supplemented with emails and texts with
links to timely information
• For past due borrowers, specific assistance in finding best
outcomes
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FELS
• Appropriation $16.6 million each year
• For its second year, we have awards to 1,579
students under the FELS program (1,321 active;
remainder pending)
• Applications up by 30% over previous years
• Streamlining these into one program has
provided administrative efficiencies and a clearer
path for students
Training and Outreach
• FAFSA Day
• Counselor internships
• New aid training
• Two new colleagues in interim positions at SEAA
– Shawn Henderson (training)
– Marcia Weston (outreach)
CFI Grant System
• Time to remodel and rewrite – 15 year old system
• One place to go for all state grants and one place from which
all state grant EFTs come from/go back to (CFI)
• Need your input into what works, what needs improvement,
what we should include
• Listening sessions during the conference
• But see me, Bill Cox, Trae Brookins, Traci Mitchell, Rose Mary
Stelma, others, anytime