How it works

Packaging

Learning Objectives

Today we will learn• Definition of packaging• Funds we typically package• Estimated Financial Assistance & its affect• Steps to package awards• Packaging categories & sequence• Packaging models• Overawards• Hands-on example• Notifying students of their awards

So what IS packaging?

Per the FSA Handbook• Packaging is the process of awarding aid without

exceeding the student’s financial need• More simply: it’s how you decide what students

are awarded (in what combination)

Funds we typically package

Federal programs• Pell, SEOG, Perkins, Federal Workstudy, Direct

Loans, PLUS Loans, Graduate PLUS Loans, TEACH, Iraqi & Afghanistan Service Grant

State programs• TPEG, TEXAS Grant, TEG, BOT, CAL, Texas

Workstudy, Set-Aside Funds

Institutional programs

Estimated Financial Assistance

Estimated Financial Assistance (EFA) is taken into consideration when packagingExamples include (but not limited to)• Pell (first source of aid)• Other federal, state, institutional grants• Subsidized & Perkins loans• Work study• Unsubsidized loans*• PLUS loans*• Private loans*

* Indicates funds that can replace all or part of the EFC as long as the COA is not exceeded.

Other Examples of EFA

ROTC living allowancesScholarships (including athletic & ROTC)Employer reimbursement of tuition & feesTuition and fee waivers Fellowships and assistantshipsAmericorps fundsExceptions to EFA:– Iraq & Afghanistan Service Grant– Prepaid tuition plan– Federal veteran benefits

STEPS TO PACKAGING

Steps to Packaging

Determine the student’s Cost of Attendance (COA) budget & Expected Family Contribution (EFC)Award Federal Pell GrantCalculate the student’s financial needPackage campus-based, state, federal, and institutional fundsPackage or refer students to other supplemental sources of assistance

Packaging Steps: STEP 1

• Determine the COA & EFC

A typical COA consists of*o Tuition & Feeso Books & Supplieso Room & Boardo Transportationo Personal Expenses

EFC comes from…?

* COA amounts are determined by the institution & could include PJ adjustments

Packaging Steps: STEP 2

Award PELL GrantPell Grant awarded based on EFC • Pro-rated based on enrollment status and

EFC range

Packaging Steps: STEP 3

Calculating Student’s Remaining NeedCost of Attendance

- Expected Family Contribution_____________________________= Initial Need- PELL award (if any)- Estimated Financial Assistance (EFA)

__________________________________Remaining Need to package other funds

Packaging Steps: STEP 3

• Calculating students’ non-need eligibilityCost of Attendance

- PELL- EFA- Need-based aid awarded________________________________

Room for non-need based aid

Packaging Steps: STEP 4

Package Campus-based, Federal, State, Institutional• Package other aid programs listed above

according to your school’s packaging philosophy/policy

• Keep in mind that each school is different!

PACKAGING CATEGORIES & SEQUENCE

Goals of an AdministratorProvide as many students as possible with resources to meet their financial needDistribute aid in an equitable mannerProvide assistance that will be the most beneficial to the studentManage financial aid fundsRecruit and retain studentsMeet areas of national need

Sometimes these are competing goals!

Packaging Guidelines

Responsibility for paying for college rests with the student and their familyFederal Pell Grant is the foundation of undergraduate student aid packagesFamilies can borrow from some aid programs to replace all or a portion of their EFCScholarships cannot be substituted for the EFCMust take expected financial assistance (EFA) into account

Packaging Categories

Schools can organize their packaging categories based • Enrollment status• Classification • Academic program or major field of study• Application date• Need Based vs. Non-Need Based• Residency Criteria

Packaging philosophy must be detailed in the school’s policy and procedures

Packaging Sequence

What gets awarded 1st? 2nd? Schools designate the order in which it awards funds from various programs

Again, this can vary from school to schoolIt can depend on the categories designatedThis should be noted in the policy and procedure manual for your institution

PACKAGING MODELS

Six Basic Packaging Models

First-Come, First-ServedGift Aid FirstSelf-Help ConceptSpecial Targeted GroupsEquity Concept• Absolute Dollar Equity• Fixed Percentage Equity

Individualized Packaging

First Come, First Served

Financial aid awards based on the order in which completed applications are received by the aid office until funds are exhaustedBenefits:• Rewards students who get their stuff done early

Drawbacks:• May not have funds available for students that

need it most

Gift Aid

Gift aid is awarded first and self help aid is awarded to meet any remaining needBenefits:• Decreases likelihood of loan debt

Drawbacks:• Limited gift aid funding

Self Help

Self-help assistance is awarded after the family contribution and before any consideration for gift aidBenefits:• Places same burden on all students• Allows gift aid to those who do not have same

access to self-help

Drawbacks:• Increases likelihood of higher loan debt

Targeted Groups

Separate packaging criteria for specific groups of students in addition to specific criteria required by law or regulationBenefits:• Easier to tie packaging philosophy to institutional

goals

Drawbacks:• Tougher to defend – watch the “bait and switch”

Equity Concept

Absolute Equity• All students are funded up to an institutional maximum fixed

dollar amount with gift aid before their remaining need is met with self-help.

Fixed Percentage Equity• An institutional maximum percentage level of NEED or COST for

all gift aid is used rather than a fixed dollar amount.

Benefits:• Provides for an equitable distribution

Drawbacks:• Difficulty in managing overawards and maintaining that

equitable distribution

Individualized

Packaging based on the FAA’s evaluation of a student’s individual costs, resources and needsBenefits:• Each financial aid packaged is customized• Personal touch with each student

Drawback:• Time consuming• High subjectivity

Which Should You Use

This depends on your institutionMost institutions do not use one specific model…• A variation of one or more of these models is used

by institutions to fit in with that school’s objectives

OVERAWARDS & PACKAGING

Overawards

Overawards occur when:• Aid exceeds a student’s need or COA

How does this happen?• EFC changes (due to verification or updates)• COA changes (possibly due to enrollment)• Additional financial assistance comes in (late

scholarship, exemption payment) This is the student’s responsibility to report to us

When overawards happen, we make adjustments

HANDS-ON EXAMPLE

Packaging Example: Self Help

Sally is attending Cowboy College (CC). She is a dependent senior. CC employs a self-help packaging model and awards work study prior to loans.

COWBOY COLLEGECOA $20,280EFC $500Scholarship $2,500Pell Grant $5,280

AWARD MAXIMUMSPerkins $1,500Work Study $3,000Institutional Grant $3,000Direct Loan $5,500

Packaging Example: Self Help• Cost of Attendance• EFC• Need• Pell • Scholarship (EFA)• Remaining Need• Work study• Perkins• Stafford Loan• Remaining need before grants• Institutional Grant• Unmet Need• Anything Else????

20,280(500)19,780(5,280)(2,500)12,000(3,000)(1,500)(5,500)2,000(2,000)0Remaining unsub eligibility?

Packaging Example: Self Help

What if you are informed that the student is receiving another $500 scholarship after you have packaged?• Does this fit in the COA as is?• Does it fit within the need? • If not what would you reduce?

NOTIFYING STUDENTS OF AWARDS

Notifying Students of Awards

Institutions are required to inform students:• Amount of award(s)• Terms and conditions of award• Manner and timing of payments

Institutions have the option of confirmation or notification• Confirmation – Student formally accepts awards• Notification – Student not required to accept award,

but must notify school if they do not want aid

Notifying Students of Awards

What if there aren’t enough funds?• Caveat may be included on award notification

stating that the award is subject to the availability of funds and may be revised if funds not available or eligibility changes

Wrapping Up

Today we learned• Definition of packaging• Funds we typically package• Estimated Financial Assistance & its affect• Steps to package awards• Packaging categories and sequence• Packaging models• Overawards• Hands-on example• Notifying students of their awards

QUESTIONS?