a05: earlier financial aid decisions? preparing yourself for the implementation of prior-prior year...

A05: Earlier Financial Aid Decisions?

Preparing Yourself for the Implementation of Prior-Prior Year Tax Data on the FAFSA

Sarah Summerhill, Michigan State UniversityEileen O’Leary, Stonehill CollegeTodd Rinehart, University of Denver

Session Overview

• Introduction to ‘prior-prior’ year (PPY) policy change• Overview of changes PPY will make in the financial aid process• Overview of possible changes to the admission cycle• Discussion of NACAC and NASFAA initiatives to ensure smooth

implementation of PPY• Questions and discussion

Not familiar with PPY? You’re not alone.

30.1%

20.3%

40.4%

9.2%

NACAC Member Familiarity with PPY: May 2015

Very unfamiliar

Somewhat unfamiliar

Somewhat familiar

Very familiar

Discussions at schools/institutions about PPY

1.8%

11.7%

27.0%59.6%

Very extensively discussed

Somewhat seriously discussed

Only superficially discussed

Not discussed at all

High School and College Awareness

• College admission officers more likely to be at least somewhat aware (57 percent) than high school counselors (43 percent)

• Colleges more likely to have at least somewhat seriously discussed (20 percent) than high schools (7 percent)

How Did We Get to PPY?

NASFAA

fleshes out PPY

Congress considers PPY

President

Obama

announces move to PPY

Focus shifts

to implementation

NASFAA Includes PPY in HEA Reauthorization Report

July 2013 • Report of the NASFAA Reauthorization Taskforce recommends

implementing the use of PPY as the basis for EFC calculations

NASFAA fleshes out PPY


President Obama announces move to PPY

Focus shifts to i

mplementation

NASFAA Releases First PPY Report

October 2013“A Tale of Two Income Years”

• With the assistance of a grant from the Bill & Melinda Gates Foundation, NASFAA analyzed more than 70,000 student records from five years of data

• 9 Institutions: 2 public community colleges, 5 public doctoral-level universities, and 2 private four-year colleges




Focus shifts to i

mplementation

NASFAA Releases First PPY Report (Cont’d.)

Major Findings:

• Percentage of students affected varies by dependency status and institution

• A shift to PPY works best for students from the lowest-income families, many of whom are independent students with dependents

• About 16-18% of students would see large (+/- $1,000) changes in their Pell Grant awards




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mplementation

NASFAA Releases First PPY Report (Cont’d.)




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mplementation

NASFAA Releases Second PPY Report

May 2015“Great Expectations”

• Examined expressed concerns, benefits, and other considerations




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mplementation

NASFAA Releases Second PPY Report (Cont’d.)

Expressed Concerns:

1. PPY is going to result in increased Pell Grant spending.2. PPY is going to negatively impact state funding.3. PPY is going to increase administrative burden.4. PPY is going to cause disruption of systems.




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mplementation


1. PPY is going to result in increased Pell Grant spending.

• Pell Grant spending would not significantly increase due to professional judgments, but may due to a broadened pool of FAFSA applicants—a mark of success.




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mplementation


2. PPY is going to negatively impact state funding.

• In a survey of state grant agencies conducted by the National Association of State Student Grant and Aid Programs (NASSGAP), over 85% of respondents representing 47 states indicated there would be “no issues related to following the FAFSA information based on a shift to PPY.”




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mplementation


3. PPY is going to increase administrative burden.

• There is likely to be a shift in time and resources spent on verification to time and resources spent on professional judgments

• On the whole, this shift would not result in an increase in administrative burden

• Further, the earlier availability of the FAFSA would allow more time for aid administrators to complete professional judgment evaluations




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mplementation


4. PPY is going to cause disruption of systems

• While there will likely be some unique technical challenges associated with an initiative as substantial as PPY, NASFAA believes that these challenges will be contained within a 1-2 year window immediately surrounding the award year of implementation.

• Both the schedules for developing necessary modifications for software vendors supporting student information systems, as well as ED systems, will require significant consideration.




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Benefits:

1. Earlier FAFSA Release• NASFAA proposes a FAFSA release date of as early as

September 1.• The possibility of earlier FAFSA completion also allows for much

better alignment with existing recruiting and admissions schedules and practices.

2. Accuracy of Data• The shift to PPY would mean that virtually all required federal tax

returns would have been filed for the tax year being used to complete the FAFSA.


Additional Considerations:

1. Would institutional awarding methodologies change?2. How would PPY affect institutional policies regarding need

awareness?




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mplementation

NASFAA Takes Research to the Hill

• As part of broader advocacy efforts, NASFAA includes original research from reports on PPY in discussions with lawmakers and staff in Congress and in the Administration




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mplementation

Congressional HEA Reauthorization Proposals Include PPY

• Higher Education Affordability Act: Sen. Harkin (D-IA), then-Chair of Senate Education Committee*

• FAST Act: Sens. Alexander (R-TN), now Chair of Senate Education Committee and Bennet (D-CO)

• Simplifying Financial Aid for Students Act: Sen. Booker (D-NJ)*

Senate – May/June 2014

• Simplifying Application for Student Aid Act (bipartisan)*

* NACAC endorsed

House – June 2014




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Senators Affirm Support for PPY

February 2015

• Task Force on Federal Regulation of Higher Education, led by Sens. Alexander (R-TN) and Mikulski (D-MD), includes recommendation to switch to PPY

June 2015

• 21 Senators send letter to Secretary Duncan requesting ED to use its authority to implement PPY




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mplementation

Administration Rollout of PPY

September 14, 2015

• In Des Moines, Iowa, President Obama announces action to implement PPY on the 2017-18 FAFSA

• On October 1, 2016, the FAFSA for the 2017-18 award year will be released by the Department of Education.




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mplementation

Improving Implementation

• Immediately following the President’s announcement, NASFAA announced its intention to form a PPY implementation task force to ensure a smooth transition for financial aid offices nationwide




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mplementation

Identifying Implications

The move to PPY could have some important implications for colleges and universities

• Budget and tuition planning timelines may need to be adjusted if award determinations are made in the fall instead of the spring

• Recruitment and admissions offices may need to alter messaging as high school seniors will receive financial aid information much earlier




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mplementation

Where Are We Going?

Further guidance will continue to flow from the Department of Education in the coming months.

• ED will issue guidance on the use of professional judgment, especially as it relates to the PPY transition

• ED will be sharing progress and soliciting input on PPY at the FSA Training Conference in December in Las Vegas.




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mplementation

Association Work to Prepare for PPY

• NASFAA Implementation Working Group• NACAC Admission Practices Committee• NACAC Government Relations Committee

What PPY Could Mean for High School Counselors and IECs?

• Improved discussions about financing college– Earlier and more realistic conversations about financial viability – Improved College ScoreCard (CollegeScorecard.ed.gov)

• Financial Aid/FAFSA information nights held earlier– May include more colleges/universities to assist

• Fall workload increases• College/University requests for earlier visits

Potential Impacts on Student and Family Behavior

• Shifting priorities in college search• Changed college application patterns

– Earlier and/or later applicants? Both?

• Earlier and more informed enrollment decisions• Mixed views on stress

Potential Impacts on Admission and Recruitment Behavior

• Earlier discussions about financial viability• Admissions staff cross-training• Rolling admissions could be at an advantage

– Acceptances and financial aid decisions sent together?

• Challenges to articulating value proposition• Adoption of early decision/early action programs• Changes in yield projection accuracy

– Econometric modeling may not be as accurate– Methodically enhance yield activities/resources– Potentially have earlier, stronger indicators of class yield

Potential Impacts on Admission and Recruitment Behavior

• Changes to marketing and communication efforts– Recruitment in earnest in junior year– Yield activities in the fall– Prevent early “melt” – More schools may package acceptances and financial aid

• Recruitment calendar accelerated and extended– Earlier recruitment, applications, decisions – But not necessarily earlier financial aid packages…– October 15/May 1 and SPGP considerations

What are enrollment leaders saying?• “The next recruitment cycle is likely to bring more questions and

challenges.”

• “Will the phones start ringing off the hook?”

• “This is going to push the admission timeline earlier and earlier.”

• “Apply for admission, apply for aid, wait two months, and then we’ll answer your question. Families will now feel they have more information about how the process will end.”

• “We can offer a much more satisfying answer to some of the questions that families have as they are exploring options.”

• “I’m worried that students will receive information from our competitors and they’ll decide to not even apply to us.”

• “Let the games begin!”

• All of those quotes were from 2011!– Many of the concerns and projected disruptions about NPC

never materialized. – PPY is a more formal version of NPC, but they share many of

the same benefits and timelines. – We may experience shifts in volume and recruiting practices, but

the main disruption will perhaps be adjusting our internal logistics the first year or two.

– Most disruption is positive!

What are enrollment leaders saying about Net Price Calculator?

University of Denver website, 1996

SPGP Consequences??

• II.B.12. not establish any application deadlines for first-year candidates for fall admission prior to October 15 and will give equal consideration to all applications received by that date;

– PPY and all subsequent strategies by colleges need to be monitored. No need to rush any revisions!

– My recommendation: Admission Practices committee should consider a proposal changing this deadline to October 1, aligning with the FAFSA launch date.

SPGP Consequences??• II.B.3. permit first-year candidates for fall admission to choose among offers

of admission and institutionally-affiliated financial aid and scholarships until May 1 and state this deadline explicitly in their offers of admission;

– Again, observation and monitoring should precede any recommendations!

– My initial recommendation: Admission Practices Committee should protect the May 1 deadline!

– Changing May 1 would defeat a main purpose of PPY and October 1, which provides MORE TIME for students and families. We don’t need to return to the six-week rush!

What Now?

• NACAC and its members have a key role to play in implementation• Admission Practices and Government Relations Committees are here

to listen to your thoughts, questions, and concerns• Discussion and Q&A

a05: earlier financial aid decisions? preparing yourself for the implementation of prior-prior year...

Documents

ppy reportmay

ppy reportoctober

use of ppy

ppy report contd

considerationsnasfaa

nasfaa initiatives

priorprior year powerpoint

implementation of prior