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Articles: Financial Aid

Given the multiple goals and multiple players involved in developing and managing endowed scholarship funds, there are lots of opportunities for communication gaps, poor service, and less than optimal use of the funds. In an ideal world, endowed funds and annual gifts given for scholarship support would be used to take the place of unfunded aid in the offers made to students, freeing unfunded (and therefore unrestricted) resources for other purposes. However, many institutions are not able to achieve this efficient outcome for a number of reasons.

There are scholarships available for just about anything these days. In addition to endowed scholarships for students with names such as Zolp, Scarpinato, Gatling, Baxendale, Hudson, Thayer, Downer, Bright, and Van Valkenburg, many organizations offer awards for specific talents or interests.

It took one determined program director, two tries, three years, and much collective brainpower—but at Chatham University in Pittsburgh, today's interior architecture program students can earn a bachelor degree in three years rather than four.

When competing for top students, many colleges are finding that offering merit awards or generous need-based packages is no longer enough to win the day. Academically successful students typically have multiple offers from which to choose. So, all things being equal when it comes to financial aid, how does a college compete for the best and the brightest? Here are four ideas for sweetening the offer to the student that everybody wants—because it's not just about money anymore.

The financial pressures on institutions and the scrutiny on spending continue. But campus administrative offices also continue to find new ways to change their practices for the better.

As the stories of our Summer 2010 Models of Efficiency honorees demonstrate, there are a multitude of good ideas being implemented that streamline processes without reducing the quality of service that campus constituents deserve, and in many cases expect.

The recession has certainly forced everyone to do more with less, but financial aid administrators are dealing with a new level of this challenge. As with all campus offices, financial aid office resources and funding are being frozen or cut due to tight campus budgets. In addition, financial aid offices are serving more students and families than ever before and administering record amounts of financial aid.

With rising student loan debt, a tough job market for recent graduates, and a tougher default standard higher education institutions will have to meet in 2014, strengthening default prevention efforts is an imperative. Yet it's not always clear what factors determine default rates and how much influence higher ed institutions have in keeping defaults low.

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?

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