TASFAANAOW Workshop 2010

Packaging Financial Aid

Martin R. HernandezDirector of Financial Aid

Paul Quinn College

What is Packaging?

Packaging is a process by which the financial aid office awards a combination of aid from several sources to meet part or all of a student’s financial need.

Packaging Goals of Financial Aid Administrator

Provide as many students as possible with resources to meet their financial need

Distribute resources in an equitable manner Provide assistance that will be the most

beneficial Attract students to the school

Resources

Resources include (but are not limited to): Pell Grant (first source of aid) Scholarships Other Federal, State and Institutional Grants Subsidized Stafford and Perkins Loans Need-based employment Waivers of tuition and fees Fellowships or assistantships

Source: FSA Handbook 2009-10, Vol. 3, Pages 79 - 147

Resources

Resources include (but are not limited to): VA Benefits Americorps Funds Unsubsidized Stafford Loans* PLUS Loans* Private Loans**indicates resources that may exceed need, but may not exceed COA.

Source: FSA Handbook 2009-10, Vol. 3, Pages 79 - 147

Additional Guidelines

Enrollment criteria Classification Annual and Aggregate Maximums Annual Minimums Need Based vs. Non-Need Based Academic Criteria Residency Criteria

Steps in Packaging

Determine the cost of attendance (COA). Calculate financial need Determine eligibility for individual funds Develop package using funds for which

student qualifies Refer to supplemental sources of assistance

as needed

Step 1- Determining the Student’s Cost of Attendance (COA) Tuition & Fees Books & Supplies Room & Board Transportation Miscellaneous/Personal Dependent Care Loan Fees Cost of approved study-abroad program

Source: FSA Handbook 2009-10, Vol. 3, Chapter 2

Step 2 – Calculating the Student’s Financial Need

Cost of Attendance

-EFC

Financial Need

Step 3 – Determine Eligibility for Individual Resources Determine Pell Grant eligibility first FSEOG

Generally awarded to neediest students (Pell Grant recipients)

State Grants Examples: Texas Grant, TEG Criteria set by the state

Institutional Grants & Scholarships - criteria set by the institution

Step 3 – Determine Eligibility for Individual Resources Work-Study

Examples: FWS, TCWSP Awarded within need and according to

institutional policy Perkins Loan

Generally awarded to neediest students and according to institutional policies

Subsidized Stafford Loan Awarded within need, maximums determined

by federal regulations

Step 4 – Develop Package

Develop package using funds for which the student qualifies

Institution’s award packaging policy can influence the resulting package

Total of package cannot exceed COA

Step 5 – Other Supplemental Assistance Unsubsidized Stafford

PLUS Loan

Private Loans

Five Basic Packaging Techniques

First-Come, First-Served Special Targeted Groups Self-Help Concept Equity Concept

Absolute Dollar Equity Fixed Percentage Equity

Packaging to Cost of Attendance

Packaging Techniques

First-Come, First-Served Based on the order in which completed

applications are received by the aid office until funds are exhausted.

Packaging Techniques

Targeted Groups Separate packaging criteria for specific groups

of students in addition to specific criteria required by law or regulation. (Good for institutional scholarships)

Packaging Techniques

Self-Help Self-help assistance awarded after the family

contribution and before any consideration for gift aid.

Packaging Techniques

Equity Concept Absolute Equity

Students funded up to an institutional maximum fixed dollar amount with gift aid before their remaining need is filled with self-help.

Fixed Percentage Equity An institutional maximum percentage of NEED

or COST for all gift aid is used.

Packaging Techniques

Packaging to Cost of Attendance Student’s FA need is met as much as possible

according one or a combination of the previous techniques

Unmet COA is filled using remaining unsubsidized Stafford loan eligibility, PLUS and/or Private Loans.

Packaging Techniques

Many institutions do not use a specific model by itself. Variations of the models can be used to best fit the institutional objectives.

Award Notification

Institutions are required to inform the student of: the amounts terms and conditions of his/her award manner and timing of payments

Signature of acceptance by the student is no longer required. However, many institutions continue this practice.

Packaging Example

Holly B. NeedyIncoming first-year student, AY 10/11COA = $20,000 EFC = $500Qualifies for state residencyHas PTA scholarship of $2000Eligible for Pell Grant of $5500Maximum awards: State Grant - $2500,

Stafford Loan - $3500, Work Study - $2500,Institutional grant to fill remaining gap in gift aid.

Package this student with the “FIXED PERCENTAGE OF NEED” equity model with a maximum of 70% gift aid (scholarship considered part of gift aid).

Packaging Example

Determine need

COA – EFC = Financial Need

$20,000 - $500 = $19,500 Financial Need Determine gift aid

Financial Need * Gift Pct = Max gift aid

$19,500 * 70% = $13,650

Packaging Example

Need 19,500 Max Gift Aid 13,650 Pell Grant 5,000 PTA Scholarship 2,000 State Grant 2,500 Institutional Grant 4,150 Gift Aid Awarded 13,650 Remaining FA Need 5,850 Work Study 2,500 Sub Stafford Loan 3,350 Total Self-Help 5,850 Unmet FA Need 0 Total Package 19,500

Can Holly get anything else?

Thank you for your attention!

Questions?

Martin R. Hernandez

214-379-5530

mhernandez@pqc.edu