PackagingHow it works

Learning Objectives Today we will learn

o Definition of packagingo Funds we typically packageo Estimated Financial Assistance & its affecto Steps to package awardso Packaging categories & sequenceo Packaging modelso Overawardso Hands-on exampleo Notifying students of their awards

So what IS packaging? Per the FSA Handbook*

o Packaging is the process of awarding aid without exceeding the student’s financial need

o More simply: it’s how you decide what students are awarded (in what combination)

Funds we typically package

Federal programso Pell, SEOG, Perkins, Federal Workstudy,

Direct Loans, PLUS Loans, Graduate PLUS Loans, TEACH, Iraqi & Afghanistan Service Grant

State programso TPEG, TEXAS Grant, TEG, BOT, CAL,

Texas Workstudy, Set-Aside Funds Institutional programs

Estimated Financial Assistance

Estimated Financial Assistance (EFA) is taken into consideration when packaging

Examples include (but not limited to)o Pell (first source of aid)o Other federal, state, institutional grantso Subsidized & Perkins loanso Work studyo Unsubsidized loans*o PLUS loans*o Private loans*

* Indicates funds that can replace all or part of the EFC as long as the COA is not exceeded.

Other Examples of EFA ROTC living allowances Scholarships (including athletic & ROTC) Employer reimbursement of tuition & fees Tuition and fee waivers Fellowships and assistantships Americorps Funds Exceptions to EFA:

o Iraq & Afghanistan Service Granto Prepaid tuition plano Federal veteran benefits

Steps to Packaging

Steps to Packaging Determine the student’s Cost of Attendance

(COA) budget & Expected Family Contribution (EFC)

Award Federal Pell Grant Calculate the student’s financial need Package campus-based, state, federal, and

institutional funds Package or refer students to other supplemental

sources of assistance

Packaging Steps: STEP 1

Determine the COA & EFC

A typical COA consists of*o Tuition & Feeso Books & Supplieso Room & Boardo Transportationo Personal Expenses

EFC comes from…?

* COA amounts are determined by the institution & could include PJ adjustments

Packaging Steps: STEP 2

Award PELL Grant

Pell Grant awarded based on EFC o Pro-rated based on enrollment status

and EFC range

Packaging Steps: STEP 3

Calculating Student’s Remaining NeedCost of Attendance

-- Expected Family Contribution-- EFA_____________________________

Initial Need-- PELL award (if any)

__________________________________Remaining Need to package

other funds

Packaging Steps: STEP 3

Calculating students’ non-need eligibility

Cost of Attendance-- PELL-- EFA-- Need-based aid awarded________________________________

Room for non-need based aid

Packaging Steps: STEP 4

Package Campus-based, Federal, State, Institutional

o Package other aid programs listed above according to your school’s packaging philosophy/policy

o Keep in mind that each school is different!

Packaging Categories &

Sequence

Packaging Guidelines Responsibility for paying for college rests with the

student and their family Federal Pell Grant is the foundation of

undergraduate student aid packages Families can borrow from some aid programs to

replace all or a portion of their EFC Scholarships cannot be substituted for the EFC Must take expected financial assistance (EFA) into

account

Goals of an Administrator

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

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

to the student Manage financial aid funds Recruit and retain students Meet areas of national need

Sometimes these are competing goals!

Packaging Categories Schools can organize their packaging

categories based o Enrollment statuso Classification o Academic program or major field of studyo Application dateo Need Based vs. Non-Need Basedo Residency Criteria

Packaging philosophy must be detailed in the school’s policy and procedures

Packaging Sequence What gets awarded 1st? 2nd?

Schools designate the order in which it awards funds from various programso Again, this can vary from school to

schoolo It can depend on the categories

designatedo This should be noted in the policy and

procedure manual for your institution

Packaging Models

Six Basic Packaging Models

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

o Absolute Dollar Equityo Fixed Percentage Equity

Individualized Packaging

First Come, First Served

Financial aid awards based on the order in which completed applications are received by the aid office until funds are exhausted

Benefits:o Rewards students who get their stuff done

early Drawbacks:

o May not have funds available for students that need it most

Gift Aid Gift aid is awarded first and self help aid is

awarded to meet any remaining need Benefits:

o Decreases likelihood of loan debt Drawbacks:

o Limited gift aid funding

Self Help Self-help assistance is awarded after

the family contribution and before any consideration for gift aid

Benefits:o Places same burden on all studentso Allows gift aid to those who do not have

same access to self-help Drawbacks:

o Increases likelihood of higher loan debt

Targeted Groups Separate packaging criteria for

specific groups of students in addition to specific criteria required by law or regulation

Benefits:o Easier to tie packaging philosophy to

institutional goals Drawbacks:

o Tougher to defend – watch the “bait and switch”

Equity Concept Absolute Equity

o All students are funded up to an institutional maximum fixed dollar amount with gift aid before their remaining need is met with self-help.

Fixed Percentage Equityo An institutional maximum percentage level of NEED or

COST for all gift aid is used rather than a fixed dollar amount.

Benefits:o Provides for an equitable distribution

Drawbacks:o Difficulty in managing overawards and maintaining that

equitable distribution

Individualized Packaging based on the FAA’s

evaluation of a student’s individual costs, resources and needs

Benefits:o Each financial aid packaged is customizedo Personal touch with each student

Drawback:o Time consumingo High subjectivity

Which Should You Use This depends on your institution Most institutions do not use one

specific model…o A variation of one or more of these

models is used by institutions to fit in with that school’s objectives

Overawards & Packaging

Overawards Overawards occur when:

o Aid exceeds a student’s need or COA How does this happen?

o EFC changes (due to verification or updates)o COA changes (possibly due to enrollment)o Additional financial assistance comes in (late

scholarship, exemption payment)• This is the student’s responsibility to report to us

When overawards happen, we make adjustments

Hands-On Example

Packaging Example: Self Help

Sally is attending Cowboy College (CC). She is a dependent senior. CC employs a self-help packaging model and awards work study prior to loans.

COWBOY COLLEGECOA $20,000EFC $500Scholarship $2,500Pell Grant $4,800

AWARD MAXIMUMSPerkins $1,500Work Study$3,000Institutional Grant $3,000Direct Loan$5,500

Packaging Example: Self Help

• Cost of Attendance• EFC• Need• Scholarship (EFA)• Pell • Remaining Need• Work study• Perkins• Stafford Loan• Remaining need before grants• Institutional Grant• Unmet Need• Anything Else????

20,000(500)19,500(2,500)(4,800)12,200(3,000)(1,500)(5,500)2,200(2,200)0Remaining unsub

eligibility?

Packaging Example: Self Help

What if after you have packaged, you are informed that the student is receiving another $500 scholarship?o Does this fit in the COA as is?o Does it fit within the need? • If not what would you reduce?

Notifying Students of Awards

Notifying Students of Awards

Institutions are required to inform students:o Amount of award(s)o Terms and conditions of awardo Manner and timing of payments

Institutions have the option of confirmation or notificationo Confirmation – Student formally accepts awardso Notification – Student not required to accept

award, but must notify school if they do not want aid

Notifying Students of Awards

What if there aren’t enough funds?o Caveat may be included on award

notification stating that the award is subject to the availability of funds and may be revised if funds not available or eligibility changes

Wrapping Up Today we learned

o Definition of packagingo Funds we typically packageo Estimated Financial Assistance & its affecto Steps to package awardso Packaging categories and sequenceo Packaging modelso Overawardso Hands-on exampleo Notifying students of their awards

Questions?