Policy interactions between student
financial aid and public benefits
programs
Student Financial Aid Research Network
Amy Ellen Duke-Benfield, Senior Policy Analyst
June 14, 2012
Project
• Most low-income students have unmet need, even after
receipt of financial aid
• Receipt of public benefits, in addition to financial aid, could
help decrease unmet need
• Want to ensure students have sufficient resources to persist
and complete college
• Goals of the project:
 Better understand the interactions between financial aid and
public benefit programs
 Identify policy opportunities at federal and state levels to
enhance access to financial aid and public benefits
2
Three Main Areas of Research
Looking at the intersection of public benefits, college
attendance, and receipt of financial aid
• Implications of college attendance on eligibility for
public benefits
• Treatment of public benefits by financial aid programs
• Treatment of financial aid by public benefits programs
• Packaging and sequencing of aid and public benefits
• Presenting interim findings today
3
Programs Examined: Financial Aid
•
•
•
•
•
•
Pell Grants
Federal Supplemental Educational Opportunity Grants
Federal Work Study
Perkins loans
Stafford loans
State financial aid programs (including need-based
state grant aid and work study)
• Institutional aid
4
Programs Examined: Public Benefits
• Supplemental Nutrition Assistance Program (SNAP,
formerly Food Stamps)
• Temporary Assistance for Needy Families (TANF; cash
welfare)
• Child care subsidies--funded through the Child Care
Development Block Grant, (CCDBG), Social Services Block
Grant (SSBG), etc.; vouchers and reimbursements
• Medicaid
• State Children’s Health Insurance Program (SCHIP)
• Unemployment Insurance benefits (UI)
• Trade Adjustment Act Assistance (TAA)
• Workforce Investment Act Individual Training Account
vouchers (WIA)
5
Programs Examined: Tax Credits
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•
•
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American Opportunity Tax Credit (AOTC)
Lifelong Learning Credit
Earned Income Tax Credit (EITC)
Child Tax Credit
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Methodology
• Federal level
 Review of laws, regulations, and policy guidance
• State level:
 Looked at 3 states
 Review of laws, regulations, policy guidance
 Interviews with public benefits and financial aid program
administrators with focus on interpretation of laws, guidance
 Caveat: Not a comprehensive scan of the inner workings of
three states, though
• Local level
 Interviews with aid administrators at low-cost, public colleges;
WIB administrators; county public benefits administrators in
state with county-level governance; focus on interpretation
and implementation
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Are Postsecondary Students Even Eligible
for Public Benefits?
• TANF
• SNAP
• WIA
• TAA
• Unemployment Insurance
• Child Care (next slide)
• Are we maximizing access for students?
 Oftentimes a matter of will, sometimes of resource
constraints
 In those areas that eligibility is limited: Can eligibility be
expanded?
 In those areas where eligibility exists but is underutilized:
Are states and others taking full advantage of potential
for attendance?
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Child care: Eligibility Implications of College
Attendance and Receipt of Financial Aid
• Title IV aid not addressed in Child Care Development
Block Grant (CCDBG) law.
 CCDBG is main funding source for child care subsidies
 States determine eligibility
 Q: Does the state have a shortage of resources, operate
out of a notion of scarcity or treat child care as a
necessary support for attending postsecondary?
• The federal flexibility in CCDBG leads to state-level
variation in:
 Eligibility,
 Treatment of financial aid, and
 Ability to receive additional aid.
9
Treatment of Financial Aid by Public
Benefits Programs
• According to the Higher Education Act, Title IV HEA
Federal or Bureau of Indian Affairs financial
aid/educational assistance should not count as income
for means-tested benefits programs
 The exemption can apply to state financial aid that is
funded in part by federal funds
10
How Title IV Programs Treat Benefits in
Determining Financial Aid Package Size
Not
considered
AOTC
X
EITC
X
Not
mentioned
Count as
income
Child care
Child Tax Credit
X
X
Medicaid
X
SCHIP
X
SNAP
X
TAA
TANF
X
X
UI
WIA benefits
Treatment
ambiguous
X (with
exceptions)
X
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Treatment of State Aid by Public Benefits
Programs Varies
• State financial aid and state work study does not always
receive the same treatment as federal aid
• Special case: SNAP & financial aid
 Follows federal law for federal programs
 Treatment of state financial aid can vary whether used for
direct or indirect educational expenses
 Some confusion at state level regarding options states have to
disregard state-funded and TANF-funded work study in SNAP
o What opportunities exist to educate states about their
options?
o Are state agencies communicating with one another about
what the federal rules are in their respective areas?
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Importance of Packaging and Sequencing
of Financial Aid
• For public benefits and workforce programs, generally
found that receipt of financial aid does not affect
eligibility or benefit levels
• Yet, how aid is combined and sequenced in that
eligibility determination can matter
• What signals can states send to support college
attendance and completion?
 Through policy in public benefits and financial aid
programs
 Through professional development for financial aid
administrators and local program administrators
13
Importance of Packaging and Sequencing
of Financial Aid
• How aid is combined and sequenced at the institutional
level matters
 Combining federal and state financial aid with thirdparty sources, such WIA, TAA, or other workforce
funding, can decrease loans in the package
 Third-party sources, including state-funded retraining
dollars, can serve as a stopgap for students applying for
aid late until a financial aid determination is made or if
program or student is ineligible for Pell
o Both workforce training and state-funded retraining dollars
tend to be quite limited, though
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Importance of Packaging and Sequencing
• HEA and WIA rules are somewhat contradictory
 HEA: federal student aid cannot be counted in determining
eligibility or need in other federal benefit and assistance
programs
 Yet, WIA requires local administrators to take Pell Grants and
other forms of grant assistance into account when determining
eligibility for WIA-funded training services; how they do so
varies
• How can colleges and workforce boards coordinate the
packaging of aid so it best benefits students?
• What processes can be developed for workforce staff to get
better information on financial aid and what programs are
Title IV eligible, and to ensure clients apply for student aid?
• How can workforce funds better compliment student aid?
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Closing Questions
• How can federal and state public benefits policies better support
the pursuit and completion of postsecondary education?
• How can colleges be more intentional about packaging various
forms of assistance to help students cover unmet need?
• What strategies can colleges use to better connect students to the
public benefits for which they are eligible?
• What messages do states send that either encourage or
discourage sequencing and packaging of aid that helps students
cover unmet need?
• Are state agencies communicating sufficiently with each other so
public benefits rules adequately reflect options to disregard aid?
• How can the federal/state governments and colleges ease burden
of verification on students receiving public benefits?
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