PRESENTATION TO THE
CALIFORNIA STUDENT AID
COMMISSIONERS
California Association of Student Financial Aid
Administrators (CASFAA)
California Community College Financial Aid
Administrators Association (CCCSFAAA)
California Lenders for California (CLFE)
History of Financial Aid
Financial Aid began in the Private Sector
• Private Colleges: Harvard College in
the 1600’s. No Public Funds until much
later.
Federal Government:
• 1944: GI Bill enacted by Congress
to assist WWII Veterans returning
from the war.
•1958. The Soviet launch of Sputnik
gave Congress the occasion to justify a
limited form of student assistance in the
name of national security. The National
Defense Education Act of 1958 provided
low-interest loans for college students,
with debt cancellation for those who
became teachers after graduation. (NDSL
to Perkins Loans)
1965. The Kennedy legacy, the
civil rights movement, and the
Johnson Administration's War on
Poverty converged in the mid1960s. The 89th Congress
presided over the broadest sweep
of social legislation since the
New Deal. Along with
breakthroughs in civil rights
came large-scale aid to education,
including the Higher Education
Act .
(Federal Student Aid Policy: History and an Assessment Lawrence E. Gladieux)
California
–1955: Creation of the California
State Scholarship Commission:
• Cal Grant Program: Fueled by the GI
Bill benefits, the numbers of students in
California pursuing post-secondary
education exceeded available class
room space at public universities.
Rather than building more campuses,
the state created a scholarship program
with funding that students could use at
private institutions –institutions which
had available classroom space.
• The Scholarships were “portable”
meaning the students took them to the
institution of their choice.
Today: California Student Aid
Commission
2006:
Cal Grant Tuition/fee amount at private
postsecondary institutions: $9708
Cal Grant Tuition/fee amount at
University of California: $ 6141.
Cal Grant Tuition/fee amount at
California State University: $2520.
Cal Grant B access grant: $1551
Cal Grant C: Books and supplies:
Tuition: $3168
History Of Need Analysis –How to
determine how much to award a
student:
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1954: The College Scholarship Service,
founded by private colleges, developed a
standard need analysis formula to award
scholarship money.
1957: A national system of analysis was
being used.
1974: A uniform need analysis was used to
award private and government money.
The Formula is used to determine
how much a family can be expected
to contribute to their students
education
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CSAC used uniform need analysis to award
Cal Grant funds.
Today, CSAC uses the current need analysis,
known as federal methodology (FM), to
award to Cal Grant funds.
What is included in the Formula?
– Income from all sources
(past year & year ahead)
– Parent’s employment
status
– Number of Dependents
– Federal income taxes
– State income tax
– Included reported assets
and indebtedness
– Assets
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Family Size
Number of children in
college
How many parents
working
Age of the older parent
Cost of Attendance
or “The Student Budget”
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COA is defined in HEA Sec. 472 where RULES
are set by federal law and the actual BUDGETS
are set by the colleges.
Budgets must include tuition, fees, books,
supplies, room and board, transportation,
miscellaneous personal.
May also include child care, disability related
expenses, computer expenses.
May be increased or decreased by the college for
an individual student if justified and documented
and in accord with federal regulations.
CSAC assists budget determination
in California
Student Expense and Asset Survey (SEARS)
 Collects Students data every four years
 Based on data determines “average” expense
for students:
 Transportation
 Housing and Food
 Personal expenses
 Books and Supplies
Many Colleges use some or all of these figures,
relying on CSAC documentation to meet
federal requirements to support their budget
figures.
The Financial Aid Process…
Goals of Financial Aid
Institutions desire to:
 Provide ACCESS and CHOICE.
 Conduct an accurate and fair assessment of
the family’s ability to pay for college.
 Promote equity by assuring funds go to the
neediest students first.
 Promote efficiency by making the process
work for all students.
 Be accountable for tax dollars and institutional
funds.
Financial Aid Process Outline:
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Student requirements for obtaining
financial aid
Documents the student will receive
(CAR, FAN), and from whom
Significance of each document, and
how they relate to one another
The Initial Process… Filing the
FAFSA
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Each student must complete and file a
FAFSA (Free Application For Federal
Student Aid) annually
Deadlines
– FAFSA
– CAL Grant
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Parent and student income
requirements
List of schools
The Basic Formula
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This formula guides the college award
process,
Determines eligibility for every student,
And is enacted and regulated by federal and
state authorities while being implemented by
the college:
Cost of Attendance
Minus Expected Family Contribution
Equals Need
Cost of Attendance
or “The Student Budget”
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COA is defined in HEA Sec. 472 where RULES
are set by federal law and the actual BUDGETS
are set by the colleges.
Budgets must include tuition, fees, books,
supplies, room and board, transportation,
miscellaneous personal.
May also include child care, disability related
expenses, computer expenses.
May be increased or decreased by the college for
an individual student if justified and documented
and in accord with federal regulations.
Expected Family Contribution
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The EFC is calculated by the federal processor
from the data on the FAFSA.
The formula is determined by federal law and
adopted for California use by state law.
It includes both the student and the parent(s)
ability to pay for a 9-month time period.
Is sent to the college electronically on an “ISIR”.
The EFC may be adjusted at the campus level
based on verified information or special student or
parent circumstances.
Determination of Eligibility
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The college determines the budgets (COA) and
places the student in an appropriate cost category.
The college receives an ISIR and verifies the
student’s EFC.
COA - EFC = Cal Grant Eligibility (Need)
The college now works to find funding sources to
fill the eligibility in a process called “packaging”.
See the sample of Determination of Eligibility on
the next slide...
How The Formula Works
CC
Cost
EFC
Need
$ 15,000
- 2,600
$ 12,400
CSU
$18,000
- 2,600
$15,400
UC
$20,000
- 2,600
$17,400
Private
$47,000
- 2,600
$44,400
In the best of all possible worlds, full “need” will be met
with a financial aid package that is made up of grants and
scholarships along with reasonable amounts of work and loan
COA - EFC = Federal Need
$18,000
$0
$100
$16,000
$2,600
Cost of Attendance
$14,000
Federal Parent
Contribution
$100
$7,200
$12,000
$10,000
$100
$8,000
$16,565
Federal Student
Contribution
$13,965
$6,000
$9,365
$4,000
$2,000
$0
Low-income
($25K Annually)
Middle-income
($45K Annually)
High-income
($65K Annually)
Student by Family Income
Remaining Cost of
Attendance
(Federal Need)
CAL Grant GPA Verification
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This is a CAL Grant process
requirement
Filing date is November - March 2nd
Student files individually
Most High Schools and Institutions
submit the GPA verification document
electronically for all enrolled students
The California Aid Report (CAR)
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The student receives a CAR directly
from The California Student Aid
Commission (CSAC) based on
information provided on the FAFSA and
GPA Verification.
– Identifies the CAL Grant (A, B, and C) for
which the student is eligible
The Financial Aid Notice (FAN)
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The student will receive a FAN directly
from the campuses for which they have
applied and have been accepted
Provides the student with a complete
financial aid award package
Indicates what open requirements the
student may have
Financial Aid Notice (FAN)
Details
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Cost of Attendance (COA)
– 9 month budget
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Expected Family Contribution (EFC)
Awards being offered:
– Federal (PELL Grant, SEOG, Loans, WorkStudy)
– State (CAL Grant Estimates)
– Campus (Grants, Scholarships, Loans)
– Outside Aid (Independent Scholarships,
Tuition Assistance, Fee Waivers)
Sample UC Davis Financial Aid
Notice (FAN)
COA
- EFC
= Need
-Pell Grant
-Cal Grant A
= Need
- Loan
- Work
= Need
- UC Grant
-
$20,256
0
$20,256
- 4,050
- 6,141
=10,065
- 4,500
- 4,000
= 1,565
- 1,565
0
Financial Aid Notice - Open
Requirements
Verification Process
 Loan Documentation/Entrance
Loan Counseling
 INS-Citizenship
 Selective Service
 Social Security Number
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Accountability
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The colleges are held accountable by many
authorities:
– USDE conducts thorough program reviews.
– Congress requires every college to contract for an
annual review (with results submitted to USDE).
– The federal government conducts other miscellaneous
reviews (INS, IRS, Inspector General, etc.).
– CSAC conducts grant audits.
– EdFund conducts loan reviews.
– USDE follows-up on consumer and student complaints.
– Proprietary Institution administrators have to be
“certified” by the State of CA and fall under closer
scrutiny than other segments.
Summary of Delivery
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The college is the bottom line in the student aid
process -- both for the students and for the
government agencies.
The college receives data, works individually with
students, parents and families, verifies and
documents the financial data and other eligibility
features (citizenship, residency, etc.), determines
eligibility, selects funds for the student aid
package, determines unit load and eligible
programs and determines continuing eligibility.
Summary of Delivery - Continued
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Delivery systems (other than Cal Grant) differ:
– For Pell Grant, colleges identify eligible recipients from among all
applicants based on set EFC criteria.
– For FSEOG, FWS, Perkins Loan, and State Work Study colleges
select recipients from among eligible students.
– For most loans, colleges provide access to capital.
– For segmental programs, colleges select recipients from among
eligible students (when funds are limited) or identify recipients
when funds are available to all eligible students.
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However, all of these programs have something in
common…the college names the recipients, not
the federal or state government.
WHO ARE WE?
CASFAA
CCCSFAAA
CLFE
CASFAA

CASFAA is a non-partisan, non-profit professional
organization with a membership of more than 1700
California student financial aid administrators (and
financial aid administrators from other states who can
belong as Associate members). Representing more
than 500 colleges and universities, its members
share a common goal of improving access to and
delivery of federal, state, institutional and private
donor financial aid to students in the State of
California.
CASFAA
MISSON STATEMENT
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It is our mission to provide training
and professional development
opportunities to the financial aid
community and to advocate on
behalf of the financial aid
profession for student educational
access and choice.
CASFAA
Vision Statement
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CASFAA will:
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Serve as a resource for all financial aid professionals in
California.
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Provide members with opportunities to become actively involved
in the activities of the Association.
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Prepare members to assume leadership roles in the student aid
profession, the Association, and other financial aid associations.
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Serve as an authority in the State on student aid issues and be
consulted regularly by Federal and State policy makers, the
media, and other educational partners; and
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Be proactive with regard to positions on State and national
financial aid policy issues, and in protecting the interests and
rights of California students for educational access and choice.
CCCSFAAA
Mission Statement
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The California Community Colleges Student Financial Aid
Administrators Association is founded on three
fundamental principles that define the mission of the
Association:
First, accessibility to higher education is essential to the
development of human potential and the human condition; and
financial aid is an essential access vehicle to higher education;
and
Second, that the effective administration of financial aid
programs require accurate, current and focused information on
federal and state legislation and regulations governing student
financial aid programs; and
Third, communication between members of the profession,
government agencies, and private and community organizations
is critical to the development of effective financial aid programs
and the advancement of the profession.
CCCSFAA MISSION
(continued)
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To achieve this mission, the Association will:
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Provide training through regional meetings, workshops, statewide
conferences and other related activities and services;
Keep the membership apprised of changing legislation, regulations and
policies and procedures that will affect the administration of financial
aid programs;
Monitor and respond to state and federal issues that will adversely
affect the community college student population;
Advocate for adequate funding for student financial aid programs and
accessibility to higher education;
Network with other governmental agencies, community organizations
and associations to seek support on common issues; and
Work through the existing formal process to bring forward issues, to
increase awareness and to seek support on issues that affect students.
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CLFE
WHO WE ARE
Formed in 1988 and incorporated as a
non-profit mutual benefit corporation,
The California Lenders for Education
(CLFE) is an association represented by
lenders, secondary markets, servicers
and guaranty agencies.
CLFE Mission
To define common goals and engage in
activities that improve and preserve the
quality and integrity of education loan
products and services delivered to
students and schools in California
through a diverse coalition of industry
participants.
CLFE Goals
Committed to serving the needs of California
students, parents and schools. partners in
the delivery and administration of education
loans. We promote responsible borrowing,
default
prevention/aversion
and
debt
management. We believe that honest and
fair competition in a regulated industry
enhances product and service quality. We
encourage and participate in the open
exchange of ideas and information to
maximize the synergy of our efforts. We
support community outreach and develop
and articulate legislative and regulatory
positions.
CLFE
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There are over 1900 lenders nationally
The top 10 lenders originated over 52%
The top 25 lenders originated over
71.0%
The top 50 lenders originated over
82.9%
of the 2005 FFELP volume nationally