FINANCIAL AID OFFICERS act as stewards for many different aid sources. As such, they are responsible for ensuring that "donor" requirements are satisfied, whether that donor is the federal government, an individual who has established an endowment fund, an academic department, the athletic department, or the college itself making unfunded aid resources available to help meet enrollment goals. Working with each aid source has a unique set of challenges and often involves the financial aid office collaborating with other members of the campus community to make it happen.
Many in the academy are aware of the struggles the financial aid office has in staying current with new, ever changing, federal and state legislation regarding financial aid. Less well known, however, are the challenges of keeping up with internal changes that have implications for institutional compliance with federal and state regulations.
Some of the most significant audit findings we have seen occurred when financial aid officers were out of the loop-when a new academic program or new site was added, or when nonstandard academic terms were implemented, for example. To avoid such issues, and to ensure that all academic programs and off-site locations are eligible for federal and/or state aid, it's important to make sure the financial aid office is consulted when changes to program offerings or even delivery modes are being considered.
In addition, to meet the regulatory requirements at the individual student level, the financial aid office must rely on the receipt of timely and accurate information from other offices-particularly the registrar's office. For example, effective and ongoing communication between these two offices is necessary to complete satisfactory academic progress reviews, especially when grade changes occur after the fact.
Another common issue that we have observed occurs when reconciling the status and processing of required forms for international students who may have mistakenly filed the Free Application for Federal Student Aid (FAFSA) as eligible noncitizens. In these cases and others, the financial aid office is responsible for maintaining compliance yet is dependent on other offices for required information.
In order for the stewardship of donated funds to be managed effectively, it is critical that the financial aid, finance, and development offices work closely together. Without a shared understanding of timelines, policies, and strategies between these critical offices, institutions run the risk of inefficiently managing institutional aid and/or disappointing donors or students or both. Given that these three offices often report to three different senior staff members, effective communication and collaboration is even more challenging.
When development officers work with a donor to define the parameters of a gift, they need to keep in mind current aid strategies to ensure that the funds can be used to replace unfunded expenditures wherever possible. Similarly, the finance office needs to understand the timing of the awarding cycle so that its staff can inform the financial aid office of the funds available in endowments, and do so early enough for those funds to be included in initial award letters, rather than added on after the fact.
When selecting recipients, the financial aid office needs to be sensitive to the goals and timelines of the development office, ensuring that the students selected will not only meet the criteria but also will write an effective thank-you note and "present" well at a donor dinner. Bringing representatives of these three offices together at least once a semester can help ensure that shared goals are "top of mind," that effective calendars and communication procedures are in place, and that any concerns which arise are addressed quickly. It is possible to achieve a "win-win-win" situation: satisfied donors, thankful students, and prudent fiscal officers, but it takes a coordinated effort.
In some institutions, specific departments (typically academic or athletic) are responsible for awarding scholarship and grant funds. Because many students who receive departmental funds are also eligible for other federal, state, or institutional resources, the financial aid office must coordinate the entire package to ensure that students are not overawarded.
When this is not well understood, problems can arise. Probably the most common issue relates to timing. For example, academic departments may want to hold competitions or auditions for their awards in the late spring. Financial aid offices, however, typically begin awarding aid for the following year in February or March. If the need-based aid letter from the financial aid office is sent first, and then a departmental award is granted, students will routinely receive a revised aid letter, which often reduces some other fund in order to accommodate the departmental award. Clearly this frustrates and confuses students who had thought they could "have it all."
To avoid this scenario, some aid offices hold the packages of students who plan to compete for departmental awards. This is problematic for incoming students, however. They may well receive an aid offer from another college sooner and decide to move forward, rather than waiting to hear from all of the institutions that admitted them. Thus, the college that waits runs the risk of losing some of its best candidates.
For returning students, it may be difficult to identify which student's packages to hold, resulting in delayed packaging for all upperclass students in an effort to accommodate just a few cases. The selection of resident assistants (RAs) is another example of a subpopulation that must receive special attention. At many institutions, RAs receive a grant in the equivalent of the standard room charge (typically around $4,000 per year). Including an additional award with such a high value often affects the student's subsidized loan eligibility rather than any need-based grant. However, if the financial aid office is not told who the RAs will be until after the loan is processed, sending adjustments and/or returning already disbursed funds is burdensome for both the financial aid office and the student.
The best solution is to schedule competitions and auditions at times that will better accommodate the aid awarding cycle. When it isn't possible to award the departmental grant earlier (e.g., some sports), two approaches may be considered:
leaving a "place holder" in the package in anticipation of the departmental award; and
informing the department of the student's aid eligibility before the departmental award is offered, so that any impact on other aid will be known in advance.
To build demand from a desired population, more and more institutions are beginning to offer guaranteed awards to students in that population (e.g., children of alumni, students from a particular religious denomination, students from a particular geographic area). Again, eligibility for these awards needs to be considered as part of a total aid package.
Often the admissions office is charged with identifying students who meet the criteria. However, if the identification process is not timely, the institution again runs the risk of having to adjust a prior award to accommodate the entitlement (or wasting precious resources by allowing it to be an "add on" to other institutional aid-a process known as "stacking").
Some institutions handle this by requiring students to complete a separate application by a specific deadline in order to receive the award. A better approach is to ask students about their eligibility for such awards right on the admissions application. This not only serves as a way to market the award but also ensures that the student's eligibility can be determined at the time of admission-and therefore prior to a need-based package having been sent.
Outside scholarships are another source of funds typically involving multiple offices. Although students are asked to report any outside scholarships to the financial aid office, that doesn't always happen. Often the first notice of an outside scholarship is when the check arrives at the student accounts office. Having effective protocols for communication between the bursar's office and the financial aid office about such awards is, therefore, critical to avoiding an overaward situation.
Although it is not necessary for the financial aid office to make every decision regarding a student's award, it is important for the office to take full responsibility for coordinating those awards into the individual student's package in a manner that will meet both institutional policy and governmental regulations.
The financial aid office should also be in a position to provide reports and analysis that include all sources of financial aid (internal vs. external, departmental, entitlement, merit, athletic, etc.) In short, it is important for institutions to be aware of how many offices may need to link to the financial aid office. The links with admissions and bursar are usually well understood, but other critical connections with academic affairs and development are often weak. Almost every institution could benefit from a review of those relationships to ensure strong and effective communications are in place.
<em>Kathy Kurz and Jim Scannell are partners in the enrollment management consulting firm Scannell & Kurz. Samantha Veeder, formerly the director of Financial Aid at Hobart and William Smith Colleges (N.Y.), is the firm's senior consultant. They can be reached via their website, www.scannellkurz.com.</em>