National Association of Student Financial Aid Administrators

National Association of Student Financial Aid Administrators (NASFAA) offered several policy considerations in a report released Wednesday that received mixed reviews from the UT community.

The report does not make recommendations, but rather puts forward broad policy considerations to generate discussion on key policy issues facing students.

One policy in the report considered federal government use of a “Student Loan Eligibility Index,” which would introduce minimal financial requirements that students must meet before receiving federal loans.

Director of the Office of Student Financial Aid Tom Melecki said the policy has the potential to benefit and harm the students depending on how it is applied and designed.

“We might actually close the door to college opportunity to some students who could still benefit because of the way they scored on their SAT/ACT test or GPA made them fall into some category where we’re making assumptions about them that we shouldn’t make because we don’t really know them that well,” Melecki said. “It could also protect students from taking out loans they should not take on. It depends on how it gets applied and designed.”

If students did not qualify under the “Student Loan Eligibility Index,” they would still be able to receive Pell Grants and other institutional aid, according to the report. Studio art junior Sian Paulin said she thinks the proposed system would be unfair even with the possibility of Pell Grant eligibility.

“Pell grants don’t cover everything,” Paulin said. “Even if they do get Pell grants but they still have more expenses to cover and have no other money to pay for it, you need loan money. If your GPA isn’t high enough then they have to pay out of their own pocket or take out a loan from a private bank with higher interest rates.”

Another policy consideration suggested student loan repayments through Income-Based Repayment plans for all borrowers. Melecki said the plan would tie the amount paid to the borrower’s income, where the amount due in a year would depend on income earned that year.

“The Income-Based Repayment makes a lot of sense to me [especially for] those early years when you’re getting out of school,” said Melecki. “When you can’t afford to pay a lot, it’ll suppress your payments. In addition you could opt out of the income based repayment if you wanted to pay off the loan quicker or endured a financial hardship.”

Journalism junior Rebecca Salazar said evaluating the repayment plan is a tough issue.

“I feel like on paper it sounds fair because if you make more you can pay more,” she said, “but then I don’t want to punish the people that make more to pay more.”

The report also considered an option for students to be told in advance whether they are Pell eligible and guarantee an award amount as early as students’ freshman year in high school. Other policies in the report included Pell Grant incentives based on credit hours for those who already qualified for the grant and the idea to allow financial aid offices to limit the amount some students may borrow.

“I think everything in here is worth exploring and thinking about,” said Melecki. “That does not mean that I think we should adopt everything in here. They make some really good points.”

Published on February 18, 2013 as "NASFAA addresses financial aid policy". 

More than two-thirds of college and university financial aid administrators faced a moderate or severe resource shortage, according to a recent survey by the National Association of Student Financial Aid Administrators. Such shortages affect universities’ abilities to provide face-to-face counseling, outreach efforts and attention to target populations, according to the study. At UT, shortages have mostly come in the form of state and federal budget cuts and limited human resources at the Office of Student Financial Services. “If you’re trying to counsel someone about debt, it’s best to see them face-to-face,” said the office’s director Tom Melecki. “Trying to counsel people in an e-mail or on the phone is not the best way to do it.” Currently, the office operates with a staff of 58 employees, 26 of whom are financial aid counselors. Last year, staff members received approximately 702,000 hits on the office’s website, 107,000 phone calls, 27,532 visits to the office and about 6,000 e-mails from students. On average, the office receives about 140 visits per day. Mary Knight, associate vice president for the Budget Office, said that UT budgeted a total of $238.4 million in scholarship and financial aid funds for the 2010-2011 fiscal year. While the office did experience the staff shortages, it did not face problems with the introduction of the year-round Pell grant and increased federal regulations discussed in the survey. Melecki said although the office verified more individual cases to determine financial aid distribution, students benefitted from the introduction of the year-round Pell grant. The office was not affected by the recent 5-percent statewide budget cut, but Melecki said they still do not have enough staff to meet the demand of students and help them make informed decisions. “Some of the biggest complaints we get from students are that we’re slow to answer phones and that we’re overly bureaucratic,” Melecki said. They also cut back on the amount of student outreach, such as staffing Financial Aid Saturdays, community events the Austin Chamber of Commerce hosts that offer application support for families applying for financial aid. Freshman Charles Graham recently visited the office after his parents divorced last December. The divorce left his mother as the only person paying for his tuition. An adviser told Graham to fill out a Special Circumstances Appeal Form and a FAFSA. “Before, my mom and I would just do [financial aid] online,” Graham said. “This is definitely better than online. I’m going to come back and ask a lot of questions.” For students experiencing trouble with their financial aid office, the association recommended that students be patient and persistent, check online for answers to common questions and read and comprehend all consumer information. “The financial aid office works overtime to ensure all students get the help they need,” said Haley Chitty, a spokeswoman for the association. “Unfortunately, this can sometimes mean long lines, but students shouldn’t be discouraged. Students that are persistent will get the help they need.”