Student Loans and the Impact of Pell Grants
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David A. Feitz, Executive Director UHEAA 60 South 400 West Salt Lake City, UT 84101 (801) 321- 7210 [email protected] STUDENT DEBT & IMPACT OF PELL GRANTS DAVID A. FEITZ EXECUTIVE DIRECTOR OF UHEAA, AND ASSOCIATE COMMISSIONER FOR STUDENT FINANCIAL AID Joint Working Meeting State Board of Regents & Institutional Boards of Trustees July 30, 2015
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Transcript of Student Loans and the Impact of Pell Grants
David A. Feitz, Executive Director UHEAA 60 South 400 West Salt Lake City, UT 84101 (801) 321-7210 [email protected]
STUDENT DEBT & IMPACT OF PELL GRANTSDAVID A. FEITZEXECUTIVE DIRECTOR OF UHEAA, ANDASSOCIATE COMMISSIONER FOR STUDENT FINANCIAL AID
Joint Working Meeting State Board of Regents & Institutional Boards of Trustees
July 30, 2015
Board of Regents 2
Utah Higher Education Assistance Authority
Established in 1977, UHEAA is the student loan and financial aid organization of the Utah State Board of Regents.
UHEAA employment• 253 employees
Student loan servicing portfolio• $4.9 billion for 348,000 student borrowers
Outreach and community service• 11,000 students, parents, and counselors attended
UHEAA’s free “How to Pay for College” workshops in last 12 months.
UHEAA Grants for needy students (from UHEAA revenues)
• $11.4 million• 12,550 students
July 30, 2015 – David A. Feitz
Board of Regents 3
Financial aid program administration and scholarship support
Administrative Support
• Success Stipend – state grant program
• Matching fund administration• Veterans Tuition Gap Program• Minority Scholarship• Utah Engineering and Computer
Science Scholarship Program
Financial support• Regents’ Scholarship• New Century Scholarship
July 30, 2015 – David A. Feitz
Board of Regents 4
UHEAA Board of Directors
• 13-member UHEAA Board
• Four Regents
Marlin Jensen
Bob Marquardt
Harris Simmons
Mark Stoddard (Chair)
July 30, 2015 – David A. Feitz
• No state appropriations for UHEAA operating expenses
Board of Regents 5
$208.2 million in borrower benefits
• Public service mission: UHEAA’s revenues benefit students
July 30, 2015 – David A. Feitz
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
$2,004,845.3$2,919,437.8
$4,682,106.5$6,264,924.8
$9,378,369.9
$12,331,102.2
$14,665,325.0
$18,310,347.2
$21,905,918.2
$17,645,752.6$16,139,442.0$15,818,132.0
$12,994,278.0$11,526,055.0$11,016,288.0$10,719,134.0$10,325,130.0
$9,528,633.0
Total Savings Using Borrower Benefits
Board of Regents 6
UHEAA’s low cohort default rates
July 30, 2015 – David A. Feitz
2008 2009 2010 2011 2013 2014
5.2
6.7 7
13.4
14.713.7
2.82.1 1.9
4.8 4.4 4.7
National Average UHEAA FFELP Portfolio
Reporting Year
Fo
rmu
la C
ha
ng
e:
2-y
ea
r to
3-y
ea
r re
po
rtin
g p
eri
od
Board of Regents 7
How do students pay for college?
July 30, 2015 – David A. Feitz
Savings
Work
SuccessStipend
Loans
ScholarshipsFamily
Support
Pell Grants
Board of Regents 8
Best advice for paying for college
1. Save for college
2. Grants & scholarships
3. Work Study
4. Federal loans
5. Supplemental loans
July 30, 2015 – David A. Feitz
Board of Regents 9
Pell Grants: largest grant program for studentsNamed after the late Senator from
Rhode Island, Claiborne Pell
Funds do not have to be repaid
Undergraduate only
12 semesters of full-time enrollment
Maximum award in 2015-16: $5,775
Apply by completing the Free Application for Federal Student Aid (FASFA)
July 30, 2015 – David A. Feitz
Board of Regents 10
Pell Grant volume for Utah schools
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 $-
$50,000,000
$100,000,000
$150,000,000
$200,000,000
$250,000,000
$300,000,000
$350,000,000
$400,000,000
$450,000,000
-
20,000
40,000
60,000
80,000
100,000
120,000
140,000
Volume Recipients
Award Year
Nu
mb
er o
f R
ecip
ien
ts
July 30, 2015 – David A. Feitz
Source: U.S. Department of Education
$408 million to 114,000 students
Board of Regents 11
Pell Grant volume in Utah
July 30, 2015 – David A. Feitz
41,177recipientsin 2000
114,259recipients in
2014
Number of Utah students receiving Pell increased nearly 3 times
from 2000 to 2014
Board of Regents 12
Top ten highest Pell volume schools in Utah for the 2013-14 award year
Source: U.S. Department of Education Title IV program volume reports as of 1-10-15
School Recipients Disbursements
1 Western Governors University 18,483 $ 66.0 M
2 Utah Valley University 13,463 $ 47.7 M
3 Brigham Young University 11,217 $ 46.2 M
4 Salt Lake Community College 13,236 $ 39.3 M
5 Utah State University 10,030 $ 37.1 M
6 University of Utah 8,368 $ 31.5 M
7 Stevens Henager College 8,330 $ 30.9 M
8 Weber State University 8,334 $ 28.8 M
9 Dixie State University 4,530 $ 16.7 M
10 Southern Utah University 3,062 $ 12.2 M
July 30, 2015 – David A. Feitz
Board of Regents 13
Utah Pell Grant volume by school type
July 30, 2015 – David A. Feitz
Public Colleges & Uni-
versities (USHE)
$218.9
M54%Public UCAT $4.8
M1%
Private Non-
profit $118 M
29%
Propri-etary For-
Profit $66.4
M16%
2013-14 Award Year Ending June 30, 2014
Board of Regents 14
2013-2014: Percent of students receiving Pell Grant
SchoolPercent
Receiving Grants
Dixie State University 56%
Utah Valley University 44%
LDS Business College 42%
Southern Utah University 41%
Utah State University 40%
Salt Lake Community College 38%
Brigham Young University 37%
Snow College 33%
Weber State University 33%
University of Utah 29%
Westminster College 27%
Calculations made using data from the U.S. Department of Education, Title IV Program Volume Reports as of January 10, 2015 andheadcount data as reported in the USHE 2014 Data Book, or by individual schools at http://yfacts.byu.edu/Article?id=104, andhttps://www.westminstercollege.edu/pdf/institutional_research/Enrollment%20and%20Persistence.pdf
July 30, 2015 – David A. Feitz
Board of Regents 15
How much tuition will the maximum Pell Grant of $5,775 cover in 2015-16?
School Percent of tuition & fees paid by Pell
University of Utah 70%
Utah State University 87%
Utah Valley University 107%
Dixie State University 125%
Weber State University 108%
Southern Utah University 92%
Salt Lake Community College 162%
Snow College 166%
Brigham Young University 112%
Westminster College 18%
LDS Business College 183%
July 30, 2015 – David A. Feitz
Percentages are based on full-time enrollment, or 15 credit hours each semester for two semesters, for resident students as applicable, according to each school’s website as of July 21, 2015.
Board of Regents 16
Congressional proposals: Mixed message
More Pell Restoring the year-round Pell Grant One six-year grant that students
can draw from at any time until the money is spent
Less Pell House 2016 budget proposal
to freeze Pell funding for 10 years
Everyone agrees Simplify FAFSA from over 100
questions to as few as two Eliminate FAFSA and use tax data
July 30, 2015 – David A. Feitz
Year 1 Year 2 Year 3 . . .
Board of Regents 17
Two concerns of financial aid directors
1. Increasing number of students using Pell Grants for remedial course work
• Up to 30 hours of remedial study is eligible for Pell.
2. Students who have made multiple major changes
• Exhausted Pell eligibility and haven’t yet earned a degree
Pell grant lifetime eligibility is limited to 12 full-time semesters.
July 30, 2015 – David A. Feitz
Board of Regents 18
Student loans: The largest source of student financial aid
Pell Grant and Federal Student Loan use in Utah for the 2013-14 award year: $1.23 Billion
July 30, 2015 – David A. Feitz
$820 Million67%
$408 Million33%
Loans Pell Grants
Board of Regents 19
Top ten highest loan volume schools in Utah for 2013-14 award year
School Amount
1 WESTERN GOVERNORS UNIVERSITY $ 203.5 M
2 UNIVERSITY OF UTAH $ 136.2 M
3 STEVENS HENAGER COLLEGE $ 77.9 M
4 UTAH VALLEY UNIVERSITY $ 67.7 M
5 UTAH STATE UNIVERSITY $ 60.0 M
6 BRIGHAM YOUNG UNIVERSITY $ 52.1 M
7 WEBER STATE UNIVERSITY $ 46.6 M
8 SALT LAKE COMMUNITY COLLEGE $ 30.5 M
9 DIXIE STATE UNIVERSITY $ 22.8 M
10 WESTMINSTER COLLEGE $ 20.8 M
July 30, 2015 – David A. Feitz
Source: U.S. Department of Education Title IV program volume reports as of 1-10-15
Board of Regents 20
Student loans: The largest source of student financial aid
• One in five American households has education debt
July 30, 2015 – David A. Feitz
Source: http://www.pewresearch.org/fact-tank/2013/07/01/2428455/
Board of Regents 21
Student loans: Largest source of household debt
July 30, 2015 – David A. Feitz
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Board of Regents 22
Average student loan debt burden
July 30, 2015 – David A. Feitz
National average debt for graduating seniors: $28,400
Utah average debt for graduating seniors: $22,418 - 21% less than national average
52% of Utah college graduates had student loans: 17% less than national average
Calculations by the Project on Student Debt, based on data from Thomson Peterson’s UndergraduateFinancial Aid and Undergraduate Databases. http:http://ticas.org/posd/map-state-data-2014
Board of Regents 23
Payment on average Utah student loan debt
• $22,418 balance• 4.29% interest rate• 10-year repayment period
Monthly payment = $230.07
July 30, 2015 – David A. Feitz
Board of Regents 24
• What new car could you buy for $22,418?
• Importance of teaching financial literacy
• The value of a car depreciates
• Education Pays: The value of a college degree appreciates• Approximately $1 million more lifetime earnings with a 4-
year degree over a high school diploma*
• Borrow wisely: consistent with earnings potential
July 30, 2015 – David A. Feitz
Perspective: The price of a new car
Ford Fusion
*Source: Current Population Survey, U.S. Bureau of Labor Statistics, U.S. Department of Labor
Board of Regents 25
Reality of borrowing patterns
July 30, 2015 – David A. Feitz
Only 4.2% of borrowers have balances greater than $100,000
Press stories of extremely high debt levels are the exception.
Source: FRBNY Consumer Credit Panel / Equifax
38.8%
28.5%
18.5%
10.1%
2.4%1.0% 0.8%
$1-$10,000
$10,000-$25,000
$25,000-$50,000
$50,000-$100,000
$100,000-$150,000
$150,000-$200,000
$200,000+
Board of Regents 26
Who defaults? Students who don’t complete
July 30, 2015 – David A. Feitz
Source: National Center of Education Statistics Beginning Postsecondary Students Survey 2004/09
Educational attainment of students who default, as of 2009.
Only 1.1% of students who earned a bachelor’s degree defaulted
1.1% 2.4%
24.7%
8.9%
62.9%
Bachelor's DegreeAssociate's DegreeCertificateStill EnrolledDid Not Complete
Board of Regents 27
Student loans – National political debate
1. Proposal for “free,” no-debt education
2. Proposal that colleges and universities have “skin in the game”
a. Pay for a percentage of defaults
b. Allow institutions to limit borrowing for some students
July 30, 2015 – David A. Feitz
Board of Regents 28
One day at the gas station . . .
July 30, 2015 – David A. Feitz
David A. Feitz, Executive Director UHEAA 60 South 400 West Salt Lake City, UT 84101 (801) 321-7210 [email protected]
STUDENT DEBT & IMPACT OF PELL GRANTSDAVID A. FEITZEXECUTIVE DIRECTOR OF UHEAA, ANDASSOCIATE COMMISSIONER FOR STUDENT FINANCIAL AID
Joint Working Meeting State Board of Regents & Institutional Boards of Trustees
July 30, 2015
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