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Articles: Financial Aid

The federal government is implementing a new method of assessing student loan default rates that will make it tougher for higher education institutions to remain eligible to receive federal student aid funds.

Talking about affordability can be a scary conversation for a recruiter. That is part of the reason more and more institutions have moved to transparent merit policies and other "entitlements" with clear eligibility criteria. But even if recruiters have these tools at their disposal, they still need to be able to talk with confidence about need-based aid and that is where it can get complicated.

We're starting the new year by announcing a new recognition program here at University Business, a program that honors those administrative departments that have found a way to work smarter and better. We call it Models of Efficiency, and it gets to the heart of what University Business is all about, a message that is reflected in our tag line, "Solutions for Higher Education Management."

IN A RECENT MOODY'S SURVEY, almost 30 percent of private colleges projected declines in net tuition revenues for the current fiscal year. This is likely not because enrollments declined, but because more financial aid was spent in achieving enrollment goals. Officials at institutions whose discount rates increased this fall are wondering if this is the new cost of doing business or whether they spent more than necessary.

The drivers behind increased discount rates are many, including:

Determining the fair value of assets and liabilities on a university's financial statement has become increasingly stringent, particularly under the Financial Accounting Standards Board (FASB) Accounting Standards Codification Fair Value Measurements and Disclosures (Topic 820), formerly FAS 157. Since compliance with accounting regulations is an undeniable part of a CFO's responsibility, it is important that accounting professionals in higher education are aware of the new standards under Topic 820.

NO ONE ENVIES YOU, DEAR READER. Higher ed administrators are seeing students with greater financial need and donors with shallower pockets and shorter arms. What are you and your fundraising folks to do in order to narrow that gap?

IN ITS SIMPLEST FORM, ENSURING the linkage between financial aid and enrollment projections is about two things: solid data analysis and communication. How many new and returning students will there be, and how much institutional grant aid will they require? Who needs to be informed of the projections, and when? Of course, the devil is always in the details. So let us break it down into the basic components.

IN AN EFFORT TO GET AMERICA’S recently unemployed workers back to work, the Obama administration has implemented several initiatives to encourage them to learn new job skills through postsecondary education. These initiatives are likely to affect higher education institutions and provide additional opportunities to educate workers who have been negatively impacted by the economic downturn.

IT WAS THE DISASTER THAT DIDN'T happen, despite the headlines in national and local newspapers throughout the spring of 2008. “College Financial Aid System ‘In Crisis,’” proclaimed USA Today. “No Funds to Lend to 40,000 Students,” blared the Boston Globe. “Student Loans Start to Bypass 2-Year Colleges,” warned The New York Times.


IN THE MEDIA, FINANCIAL aid coverage tends to focus on topics such as the tensions between funding merit scholarships versus need-based grants, the growth in student and parent borrowing, and the need to increase funding for Federal Pell Grants. Federal or state work-study programs get little focus.


IT IS A WELL-KNOWN FACT: Tutoring helps students perform better. The trick is getting them to use it. In keeping with the cyclical nature of trends, community colleges are rediscovering the advantages of student success centers, which consolidate math, writing, and language help in one place.