A05: Earlier Financial Aid Decisions?
Preparing Yourself for the Implementation
of Prior-Prior Year Tax Data on the FAFSA
Sarah Summerhill, Michigan State University
Eileen O’Leary, Stonehill College
Todd 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.
NACAC Member Familiarity with PPY: May 2015
9.2%
Very unfamiliar
30.1%
Somewhat unfamiliar
Somewhat familiar
Very familiar
40.4%
20.3%
Discussions at schools/institutions about PPY
1.8%
11.7%
Very extensively
discussed
Somewhat seriously
discussed
27.0%
59.6%
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
Congress
considers PPY
President
Obama
announces
move to PPY
Focus shifts to
implementation
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
NASFAA
fleshes out
PPY
Congress
considers PPY
President
Obama
announces
move to PPY
Focus shifts to
implementation
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
NASFAA
fleshes out
PPY
Congress
considers PPY
President
Obama
announces
move to PPY
Focus shifts to
implementation
NASFAA Releases First PPY Report (Cont’d.)
NASFAA
fleshes out
PPY
Congress
considers PPY
President
Obama
announces
move to PPY
Focus shifts to
implementation
NASFAA Releases First PPY Report (Cont’d.)
NASFAA
fleshes out
PPY
Congress
considers PPY
President
Obama
announces
move to PPY
Focus shifts to
implementation
NASFAA Releases Second PPY Report
May 2015
“Great Expectations”
• Examined expressed concerns, benefits, and other considerations
NASFAA
fleshes out
PPY
Congress
considers PPY
President
Obama
announces
move to PPY
Focus shifts to
implementation
NASFAA Releases Second PPY Report (Cont’d.)
Expressed Concerns:
1.
2.
3.
4.
PPY is going to result in increased Pell Grant spending.
PPY is going to negatively impact state funding.
PPY is going to increase administrative burden.
PPY is going to cause disruption of systems.
NASFAA
fleshes out
PPY
Congress
considers PPY
President
Obama
announces
move to PPY
Focus shifts to
implementation
NASFAA Releases Second PPY Report (Cont’d.)
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.
NASFAA
fleshes out
PPY
Congress
considers PPY
President
Obama
announces
move to PPY
Focus shifts to
implementation
NASFAA Releases Second PPY Report (Cont’d.)
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.”
NASFAA
fleshes out
PPY
Congress
considers PPY
President
Obama
announces
move to PPY
Focus shifts to
implementation
NASFAA Releases Second PPY Report (Cont’d.)
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
NASFAA
fleshes out
PPY
Congress
considers PPY
President
Obama
announces
move to PPY
Focus shifts to
implementation
NASFAA Releases Second PPY Report (Cont’d.)
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.
NASFAA
fleshes out
PPY
Congress
considers PPY
President
Obama
announces
move to PPY
Focus shifts to
implementation
NASFAA Releases Second PPY Report (Cont’d.)
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.
NASFAA Releases Second PPY Report (Cont’d.)
Additional Considerations:
1.
2.
Would institutional awarding methodologies change?
How would PPY affect institutional policies regarding need
awareness?
NASFAA
fleshes out
PPY
Congress
considers PPY
President
Obama
announces
move to PPY
Focus shifts to
implementation
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
NASFAA
fleshes out
PPY
Congress
considers PPY
President
Obama
announces
move to PPY
Focus shifts to
implementation
Congressional HEA Reauthorization Proposals
Include PPY
Senate – May/June 2014
• 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)*
NASFAA
fleshes out
PPY
Congress
considers PPY
House – June 2014
• Simplifying Application for
Student Aid Act (bipartisan)*
* NACAC endorsed
President
Obama
announces
move to PPY
Focus shifts to
implementation
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
NASFAA
fleshes out
PPY
Congress
considers PPY
President
Obama
announces
move to PPY
Focus shifts to
implementation
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.
NASFAA
fleshes out
PPY
Congress
considers PPY
President
Obama
announces
move to PPY
Focus shifts to
implementation
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
NASFAA
fleshes out
PPY
Congress
considers PPY
President
Obama
announces
move to PPY
Focus shifts to
implementation
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
NASFAA
fleshes out
PPY
Congress
considers PPY
President
Obama
announces
move to PPY
Focus shifts to
implementation
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.
NASFAA
fleshes out
PPY
Congress
considers PPY
President
Obama
announces
move to PPY
Focus shifts to
implementation
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!”
What are enrollment leaders saying about
Net Price Calculator?
• 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!
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