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.
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.
Colleges and universities stand to reap the benefits of tens of billions of dollars in federal funding under the American Recovery and Reinvestment Act of 2009. The legislation will impact everything from student aid and research funding to technology investments and projects planning. Two experts, Kevin Hegarty, vice president and chief financial officer at University of Texas, Austin, and Lander Medlin, executive vice president of APPA, provide valuable insight about the stimulus package in this edited digest of our web seminar.
ROBERT ZEMSKY WANTS TO MAKE UP for a missed opportunity. Zemsky, chairman of the Learning Alliance for Higher Education, based at the University of Pennsylvania, was called to serve as a member of the Spellings Commission on the Future of Higher Education during the Bush administration and to participate in the national dialogue on finding solutions to higher education’s most vexing problems.
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.
Until last January, issuing financial aid refunds at Antelope Valley College was a long, tedious process. Instruction files were sent from the school to a remote district office, which printed checks and sent them back to the school to be stuffed into envelopes and mailed to students.
It was a time-consuming and costly procedure, explained Sherrie Padilla, director of financial aid at the community college, located in Lancaster, Calif. “We needed to investigate other ways to disburse refunds to students,” she said.
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.