Presentation to Education

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v3
Financial Aid Report
Presentation to Education Local Government
Interim Committee June 2008
Office of the Commissioner of Higher Education
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INTRODUCTION
PURPOSE address accountability measures
developed by PEPB and adopted by LFC. HISTORY
PEPB recommended accountability measures to 2007
Legislature in a companion bill to HB 2 .
2007-08 INTERIM PEPB requested follow-up during
2007-2008 interim, LFC incorporated PEPB
accountability measures into its performance
measurement program. LEGISLATIVE REQUEST given
the complexity of student assistance/financial
aid programs across the university system, the
legislature may want to consider adding an
accountability measure that would require a
report to the legislature should any of the
following decision packages be approved

• Funding increases to Governors Postsecondary
  Scholarship
• OTO funding for tuition waivers related to MUS
  Honors Scholarship

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INTRODUCTION

• REPORTING LANGUAGE
• Develop a report that addresses the various
  components of student financial aid, both federal
  and state funded and includes findings and
  recommendations for how the components of
  financial aid may best achieve the shared policy
  goals of affordability approved by PEPB
• Include the following measurements (shared policy
  goals)

• Percentage of students who receive financial aid.
• Average state funded aid/scholarship award
  amount.
• Amount of unmet student need.

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TOPICS
Shared Policy GoalsOverview of MUS Financial
Aid Trends Analysis Need vs. Non-Need Based
AidSummary, Options, Recommendations
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Shared Policy Goals
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Shared Policy Goals

• Critical Data Point Related to Financial Aid
• Cost of Attendance academic year prices for
  full-time, in-state undergraduate students,
  including tuition and fees, books and supplies,
  room and board, other living expenses.

COA is a federally defined measure.
Cost of Attendance
The published cost of attendance establishes the
limits for financial aid and student loans
available to students.
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Shared Policy Goal 1
Percentage of Students Receiving Financial Aid
All Students, 2001-02 to 2006-07
Note amounts represent aid disbursed in the MUS
(not including community colleges)
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Shared Policy Goal 1
Percentage of Students Receiving Financial Aid

• Percentage of 1st time students receiving aid,
  AND
• Ratio of Tuition to Median Household Income,
  2005-06

Montana students are more likely to receive
financial aid than student from other western
states. One reason is that tuition in Montana is
higher relative to median household income.
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Shared Policy Goal 2
Average Amount of State Funded Aid per Student
State Funded Aid per Resident Student FTE
2001-02 thru
2007-08
(includes state
funded portion of waivers)
Note amounts represent aid disbursed in the MUS
(not including community colleges)
does not include WICHE/WWAMI
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Shared Policy Goal 2
Average Amount of State Funded Aid per Student
State Funded Need Based Aid per Student FTE
2002-03 thru
2005-06
Source NASSGAP Survey, IPEDS
regional peers WICHE states minus CA
Even with recent increases to financial aid
programs, need-based aid in Montana still lags
behind the regional average.
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Shared Policy Goal 3

• Unmet Need - Unmet need of students receiving
  Pell Grants (note Pell serves as low-income,
  need-based indicator)

MSU UM Figures (avg), 2006-07
Unmet financial need continues to grow when cost
of attendance outpaces financial aid resources.
Total unmet need 70 Million (N 6,859
Pell Recipients)
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Financial Aid Overview FY07
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Types of Financial Aid

• Grants financial awards that do not need to be
  repaid and typically come from state or federal
  sources. They are usually based on financial
  need.
• Scholarships financial awards based on merit or
  merit plus need and come from government or
  private sources. They don't have to be repaid
  either
• Waivers aid in the form of a partial or total
  waiver of student tuition for qualifying
  students.
• Loans financial aid that students are required
  to pay back most receive federal loans
  qualifying studentsbased on needwill not have
  to pay interest while in school, also rates are
  usually lower than other loans and repayment is
  usually delayed until you graduate.
• Work-Study provides jobs for students with
  financial need, allowing them to earn money to
  help pay educational expenses. The program
  encourages community service and work related to
  each student's course of study.

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Sources of Financial Aid

• Federal funds disbursed to students from the
  federal government.
• State funds appropriated by the State of
  Montana
• Institutional funds disbursed to students from
  the institution(s) they are attending.
• Private/Other funds derived from private
  sources or funding streams.

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Types of Financial Aid

• Need-based Aid awards made based on the
  financial need of the student and his/her family.
  
• Need-based means that your family's financial
  resources, as measured by a formula established
  by the federal government, are not sufficient to
  cover your educational costs.
• This formula analyzes a family's income and
  assets to determine Expected Family Contribution
  (EFC) toward the cost of college.
• Merit-based Aid financial awards based on
  academic performance (including measures such as
  GPA, ACT/SAT test scores, high school rank,
  etc..).

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Financial Aid Overview FY07

• Grants FY07 Total 37.6 million

Federal 33,260,000 Pell Grants Academic
Competiveness/Smart Grants Supplemental Education
Opportunity Grants (SEOG) State 2,900,000 MT
Higher Education Grants (MHEG) (includes 9,000
of federal LEAP funds) MT Tuition Assistance
Program (MTAP) (no SLEAP funds allocated to
MUS) Supplemental Education Opportunity Grant
(SEOG) Match Institutional 220,000 Private/Oth
er 1,200,000
Note amounts represent aid disbursed in the MUS
(not including community colleges)
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Financial Aid Overview FY07

• Scholarships FY07 Total 25.8 million

State Scholarships 5,658,000 Governors
Postsecondary Scholarship FY07 639,000 FY08
1.5 million budgeted statewide FY09 2.5
million budgeted statewide Professional Programs
(WICHE,WWAMI) 5,019,000 Institutional
Scholarships 13,815,000 MUS Honors Scholarship
Waiver Campus and/or Foundation
Scholarships Private Scholarships 6,300,000
Note amounts represent aid disbursed in the MUS
(not including community colleges), except for
WICHE/WWAMI
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Financial Aid Overview FY07

• Waivers FY07 Total 24.4 million

Mandatory Waivers 7,300,000 American Indian
Waiver Faculty Staff Waiver Employee Dependent
Waiver Veteran Waiver MUS Honors
Scholarship Discretionary Waivers 17,100,000 Ath
letic Undergraduate Graduate Dual Credit
Note waivers funded at 37.8 state and 62.2
institutional
Note amounts represent aid disbursed in the MUS
(not including community colleges)
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Financial Aid Overview FY07
Loans FY07 Total 148 million
Federal Loans 142,700,000 Subsidized (need
based) 70,500,000 Unsubsidized (non-need
based) 72,200,000 Private Loans 5,200,000

• Work-Study FY07 Total 3.45 million

Federal Work-Study 2,000,000 State
Work-Study 791,000 Institutional
Work-Study 660,000
Note amounts represent aid disbursed in the MUS
(not including community colleges)
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Trends Analysis
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MUS Financial Aid Five Year Trends

2001-02 to 2006-07
FY07 Total Financial Aid 239 million
Total Financial Aid Increased by 47 from FY02 to
FY07
Note amounts represent aid disbursed in the MUS
(not including community colleges)
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MUS Financial Aid by Source

2006-07
Total Financial Aid 239 million
Note amounts represent aid disbursed in the MUS
(not including community colleges) waivers
funded at 37.8 state and 62.2 institutional
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MUS Financial Aid by Type
2001-02 to
2006-07
Led by student loans, financial aid increased by
76 million in five years
Note amounts represent aid disbursed in the MUS
(not including community colleges)
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MUS Financial Aid by Source
2001-02 to
2006-07
includes WICHE/WWAMI
Note amounts represent aid disbursed in the MUS
(not including community colleges)
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MUS Financial Aid Federal
2006-07
Federally Funded Financial Aid 178 million
2
Note amounts represent aid disbursed in the MUS
(not including community colleges)
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MUS Financial Aid Federal
2001-02 to 2006-07
Federal grant funds grew by 3.3 million, while
federal loans increased by 46 million from FY02
and FY07.
Note amounts represent aid disbursed in the MUS
(not including community colleges)
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State Funded Aid (MT Total)
2007-08
Includes Community and Tribal Colleges (except
waivers)
State Funded Financial Aid in FY08 20.6 million
(funded in Ed Unit budget)
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State Funded Aid (MT Total)

2000-01 thru 2007-08
Includes Community and Tribal Colleges
State funded aid increased by 3 million
(excluding waivers).

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State Funded Aid

2000-01 thru 2007-08, MUS only
State funded portion of waivers increased by 6.1
million.
Note distribution between state and institution
determined by state share of MUS general
operating budget report by LFD.
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MUS Financial Aid - Institutional

2006-07
Institutional Financial Aid 30 million
Note amounts represent aid disbursed in the MUS
(not including community colleges)
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MUS Financial Aid - Institutional

2001-02 to 2006-07
Institutional scholarships grew by 5 million and
waivers increased by 9 million between FY02 and
FY07.
Note amounts represent aid disbursed in the MUS
(not including community colleges)
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MUS Financial Aid Private/Other

2006-07
Private/Other Financial Aid 12.7 million
Note amounts represent aid disbursed in the MUS
(not including community colleges)
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MUS Financial Aid Private/Other

2001-02 to 2006-07
Grants, Loans, Scholarship from Private/Other
sources all increased over the past five years.

Note amounts represent aid disbursed in the MUS
(not including community colleges)
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Need vs. Non-Need Based Aid
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MUS Need Based Financial Aid

2006-07
(Subsidized Federal Loans)
115 million of Need Based aid disbursed in
2006-07
Note amounts represent aid disbursed in the MUS
(not including community colleges)
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MUS Non-Need Based Financial Aid

2006-07
124 million of non-need based aid disbursed in
2006-07
Note amounts represent aid disbursed in the MUS
(not including community colleges)
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MUS Financial Aid by Need vs. Non-Need Based Aid

2001-02 to 2006-07
Non-need based aid (primarily loans) increased by
60 million (93)
Note amounts represent aid disbursed in the MUS
(not including community colleges)
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MUS Need Based Financial Aid

2006-07
Need Based Loans 70.6 million
Note amounts represent aid disbursed in the MUS
(not including community colleges)
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MUS Financial Aid by Need vs. Non-Need Based
Loans
2001-02 to 2006-07
Non-need based loans increased by 104
need-based loans by 18
Note amounts represent aid disbursed in the MUS
(not including community colleges)
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MUS Need Based Financial Aid

2006-07
Need Based Grants 37.5 million
(Pell, SMART, ACG)
(MTAP, MHEG, SEOG)
Note amounts represent aid disbursed in the MUS
(not including community colleges)
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MUS Need Based Financial Aid

2006-07
Need Based Scholarships 4 million
Note amounts represent aid disbursed in the MUS
(not including community colleges)
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State Financial Aid (MT Total)

2000-01 thru 2007-08
Includes Community and Tribal Colleges
Includes WICHE/WWAMI state funded waivers
Total state funded aid increased by 9.1 million.
State funded
need based aid increased by 1.6 million.
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Summary, Options, Recommendations
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Summary Trends Analysis

• Total financial aid awarded to MUS students
  increased by 76 million (47) from FY02 to FY07.
• Student loans accounting for 2/3 of the increase.
• State funded financial aid increased by 9
  million from FY01 to FY08. Growing areas
  include
• Governors Post-secondary Scholarship 1.5
  million
• MTAP MHEG 670,000
• WICHE/WWAMI 737,000
• Waivers 6.1million
• Institutional scholarships grew by 5 million and
  waivers increased by 11 million between FY02 and
  FY07.
• Approximately 13 million in aid comes from
  private sources.

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Summary Need vs. Merit Based Aid

• From 2002 to 2007, non-need based aid increased
  by 60 million, while need-based aid grew by 16
  million.
• When loans are removed from the calculation,
  non-need based aid increased by 20 million,
  while need-based aid grew by 6 million.
• Over 37 million is awarded in need based grants
  (33 million in Pell, 3 million in
  state funded grants, 1 million
  private/other).
• 4 million disbursed in need based scholarships
  (3 million from institutional
  sources)
• From 2001 to 2008, state funded need based aid
  (to all MT institutions) increased by 1.6 million

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Short-term Options

• Option 1 Increase Need Based Aid
• Recommendation Add funds to existing state
  funded, need based programs (MTAP, MHEG, or
  Governors Postsecondary Scholarship).
• Option 2 Increase Non-Need Based Aid
• Recommendation Increase funding for Governors
  Postsecondary Scholarship.

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Long-term Options
Considerations

• Measure track student debt load and set
  benchmarks regarding student loan levels to
  obtain postsecondary degrees at MUS institutions
  
• Create a process that links tuition levels with
  student debt load and the availability of grants
  and scholarships (state and federal) and
• Work to reduce unmet need by augmenting state
  grant and scholarship programs that leverage
  federal funds.

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Appendix
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Appendix
Financial Aid Program Descriptions

• Montana Higher Education Grants (MHEG)
• These need based grants are distributed by MGSLP
  to the MUS campuses (including community
  colleges). The amount each campus receives is
  based on the campuss respective percentage of
  FTE students. Generally speaking, a student must
  be Pell eligible to receive MHEG. Each campus
  awards MHEG. MGSLP combines the State MHEG with
  federal LEAP (about 90,000 a year, only 9,000
  allocated to MUS institutions). The federal
  portion of LEAP is distributed to all
  postsecondary schools in Montana including
  tribal and privates. MHEG is very easy to
  administer and works extremely well. Of all the
  types of aid provided by the State to students,
  MHEG is probably most preferred by schools.
  During the current biennium, MHEG was funded at
  approximately 1 million, or 500,000 per year.

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Appendix

• Montana Tuition Assistance Program (MTAP).
• Also known as Baker Grants, MTAP requires
  students to have both financial need and earned
  income. These grants are distributed in the same
  manner as MHEG. State MTAP is combined with
  federal SLEAP funds (about 100,000 a year, all
  of which is allocated to private colleges). MTAP
  has been awarded at roughly 4-5 times the amount
  of MHEG (about 2 million per year). It is
  relatively easy to administer, although more
  difficult for schools to award because of the
  required student work component. During the 09
  biennium, MTAP was funded at roughly 4 million,
  or 2 million per year.

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Appendix

• Governors Postsecondary Scholarship
• Also known as the Best and Brightest, this is
  really three scholarships in one. The Governors
  Scholarship has high school merit, at-large
  merit, and need-based programs. Now in its third
  year of existence, the Governors Scholarship
  gives roughly equal amounts to need and merit.
  Because Montana has no way of determining
  financial need except at the campus level, all
  need-based aid is awarded by campuses in a manner
  consistent with MHEG. High schools award the
  high school merit piece, and MGSLP awards the
  at-large piece. The Governors Scholarship is
  funded at approximately 1.5 million in 2008 and
  2.5 million in 2009 (renewals required more
  funding in the second year of the biennium).

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Appendix

• MUS Honors Scholarship
• This merit-based scholarship is given to
  graduating Montana high school students attending
  any unit of the MUS or a Montana community
  college. Applicants compete statewide, with
  recipients selected based on high school class
  rank and ACT/SAT test score. The MUS Honor
  Scholarship covers the cost of tuition for up to
  4 years. MUS will award approximately 250
  scholarships amounting to 2.4 million in FY08
  and 3.6 million FY09.
• Note
• Prior to the 2008-2009 academic year, the MUS
  Honor Scholarship was awarded to the top
  graduating high school senior attending a unit of
  the MUS, including community colleges. The MUS
  Honor Scholarship is now awarded based upon a
  combined class rank and ACT/SAT test score. In
  this sense, the MUS Honor Scholarship is similar
  to the Taylor plan. Most versions of the Taylor
  plan require students to take a certain set of
  classes, to obtain a minimum GPA in high school,
  and to score at a certain level on standardized
  college admission tests. Most versions of the
  Taylor plan are also entitlements providing the
  student does X, he/she will receive Y. The MUS
  Honor Scholarship is very similar in that if a
  student places high enough in class rank and
  scores high enough on the ACT, he/she will likely
  receive a scholarship.

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Appendix

• Pell Grants
• Pell grants are federal, need-based support. In
  general, eligibility requires a family income no
  higher than 40,000 a year and Expected Family
  Contribution can not exceed about 2,500. Pell
  grants are an entitlement and every postsecondary
  school in Montana will offer Pell grants to
  eligible students before offering any other type
  of aid. Montana has approximately 16,000 Pell
  grant recipients each year with an average award
  of about 2,600. Students at MUS institutions
  received approximately 30 million in support in
  FY07. Pell Grants are the second largest source
  of financial aid behind student loans (at about
  143 million a year).

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Appendix

• Academic Competiveness/SMART Grants
• To meet the growing need for improved math and
  science instruction, President Bush signed into
  law two new student grant programs--the Academic
  Competitiveness Grant (ACG) and National Science
  and Mathematics Access to Retain Talent (National
  SMART Grant) Programs. The grants encourage
  students to take more challenging courses in high
  schoolmaking success in college more likely,
  according to researchand to pursue college
  majors in high demand in the global economy, such
  as science, mathematics, technology, engineering
  and critical foreign languages. In order to
  receive aid, students must be eligible for a Pell
  Grant, in addition to meeting specific curriculum
  and academic requirements.

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Appendix

• Supplemental Education Opportunity Grants (SEOG)
• This is a federal program that gives 3 for every
  1 a state provides in match up to a maximum
  established by the Feds (Montana receives its
  maximum award). Recipients must have exceptional
  need and awards are based upon Expected Family
  Contribution. The State contributed
  approximately 500,000 in both 2008 and 2009 to
  go with the federal match of 1.5 million in each
  year.
• Work Study.
• Work study encourages part-time employment for
  students attending school full-time. At least
  70 of recipients must have some type of
  financial need. Recipients are paid no less than
  the federal minimum wage standard.

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Appendix

• WICHE/WWAMI/Dental, etc
• The State funds a variety of exchange programs
  that underwrite the cost of attending
  postsecondary education in other states. These
  scholarships are often merit-based and typically
  are for programs and areas of study not available
  in Montana. In the 08-09 biennium, these
  programs are funded at approximately 5 million
  per year.
• Campus and/or Foundation Scholarships.
• Many schools have foundations whose missions
  include raising money for scholarships, both
  merit and need-based. Alumni will often donate
  to specific programs at a particular school.
  Many of these scholarships also have specific
  qualifying requirements, for example they can
  only be used for athletics. Many schools attempt
  to develop a pool of money that can be used for
  students with unmet need or students with
  exceptionally high merit.

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