Technology to the Rescue: As Financial Aid Officers Grapple with Growing Challenges, Complexities, and Demand, They Turn-Sometimes Gratefully, Sometimes Uneasily-To Today's Technology Solutions
Sausner, Rebecca, University Business
At Central Washington University, the amount of financial aid given to students was up by more than 50 percent in 2002 (over 1995)--from $39 million to $60 million. At the University of Minnesota, six times the size of Central Washington, the dollars dispersed grew $128 million to $222 million over the same seven-yea period. At Furman University, a private 2,700-student school in Greenville, SC, the amount of aid dispersed jumped from about $12 million to $37.5 million during that time. Of course, behind those steeply climbing aid figures are dramatic increases in the number of students requesting assistance.
Greater demand. "What we're finding is that more people are applying for aid, even people without need, and we're also seeing a significant increase in families having problems--either losing their jobs, or taking a cut in pay and then asking for special consideration," says Agnes Canedo, director of Financial Aid at CWU. But keeping up with the financial demands of the student population is only half the battle.
Increased complexity, limited supped. "There are so many reports, regulations, and so forth that schools need to be on top of," says Billie Hyde, director of Marketing at nonprofit electronic loan technology provider and consortium ELM Resources (www.elmresources.com). "With the complexity of the laws, financial aid departments are almost being forced into adopting and adapting to technology. It's the only way they can keep up with the industry." Truth is, the troubled U.S. economy, stressed state budgets, and rising university costs have been coupled with the increased technological complexities of financial aid application and disbursement, and the changes required to handle all of the applications and Loan products, and meet all of the regulations. This, say financial aid pundits, has created conditions for the nearly perfect storm threatening so many IHE financial aid offices in recent years. Coping in the throes of that storm often comes down to wrestling with student finance technology--frequently without any bona fide IT support from the university.
"IT support is always a challenge for a financial aid office," Canedo sighs. "It has to do with the constant changes in rules implementations."
ALTERNATIVE LOAN HEADACHES
Yet, while the complexity of federal regulations associated with the Federal Family Education Loan Program (FFELP) Loans may be one of the biggest headaches for financial aid directors, not far down the list are the caps on federally guaranteed Loans. A variety of economic conditions--from decreasing family contributions to rising tuition costs--have made students needier than ever, but stagnant loan caps have forced many students and their families to turn to alternative loans to fill the gap. At CWU, where the annual cost of attendance is a relatively modest $15,000, the number of alternative Loans certified went from nine (among 8,500 students) in 2001 for a total of $61,000, to 169 in 2003 for a total of nearly $1 million.
Needless to say, there are plenty of banks and credit unions that are eager to grab a piece of this business, generating thousands of products ('or financial aid officers to weed through in order to find those that best meet the needs of students, parents, and the university. (Banks and credit unions are also quick to appeal directly to students and parents, further complicating the issue.)
Short list requirements. At Furman, and years earlier at the University of Miami (FL), Financial Aid Director Martin Carney went through a request for proposal (RFP) process to select a preferred alternative Lender for his school. And while the most important criteria were service-related issues such as repayment terms, discounts, and the availability of monthly payment plans, being able to easily process the loans electronically quickly became a critical issue.
"Technology was the other important component," Carney says. …