v: 11/15/16
Need-based
Financial Aid
In the Montana University System
Office of the Commissioner of Higher Education
November 2016
Topics
 Need-based Aid

What is it? How is it determined?
 Sources of Aid

MUS and Nat’l Comparisons, Distribution of Need-based Aid
 Affordability Indicators

Average aid, net price, and student debt
 State Aid Programs:


Montana programs
Approach in other states
2
NEED-BASED AID
What is it? How is it determined?
 Need-based Aid is simply…financial aid that students receive if
they have financial need.
 Financial need is determined by a formula:
Cost of Attendance (COA) – Expected Family Contribution (EFC)
= Financial Need
 Information is collected from students through the Free
Application of Federal Student Aid (FAFSA) and calculation are
completed by financial aid offices
https://studentaid.ed.gov/sa/fafsa/next-steps/how-calculated#need-based
Non-need-based aid is financial aid that is not based on EFC. What matters is your COA and how much other assistance
you’ve been awarded so far. For instance, if your COA is $16,000 and you’ve been awarded a total of $4,000 in need-based
aid and private scholarships, you can get up to $12,000 in non-need-based aid.
3
NEED-BASED AID
How is it determined?
Cost of Attendance
-
(COA)
Tuition & Fees
Room & Board
Books & Supplies
Miscellaneous Expenses
=
Expected Family
Contribution (EFC)
Financial Need
Students can’t receive
more need-based aid
than the amount of
their financial need.
EFC is calculated according
to a formula established by
law. Includes, family's
taxed and untaxed income,
assets, and benefits; family
size and the number of
family members who will
attend college.
Example:
$18,000
COA
-
$12,000
EFC
=
$6,000
NEED
4
The formula used to calculated financial need is COA – EFC = Need.
NEED-BASED AID
EFC & Pell Grant Examples
EXAMPLE: family of four with one dependent child in college
(the following is intended for example purposes only)
Adjusted Gross Income
EFC
PELL
$20,000
=
$0
=
$5,815
$30,000
=
$1,088
=
$4,765
$50,000
=
$4,224
=
$1,565
$80,000
=
$13,000
=
$0
EFC varies based on family income, size and number in college, as well as assets,
and other financial indicators.
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Sources of Aid
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SOURCES
Primary Sources of Need-based Aid
Award Amounts
Federal Sources
Pell Grant
2014-15
2015-16
$55,025,704 $50,790,396
Supplemental Ed Opportunity Grant (SEOG)
$1,949,092
$1,801,096
Work-Study
$1,890,495
$2,031,888
TOTAL
State Sources
MT Higher Education Grants (MHEG)
MT Tuition Assistance Program (MTAP)/Baker)
Work-Study
Governor’s Scholarship (approx. ½ need-based)
State SEOG match
TOTAL
$58,865,291 $54,623,380
2014-15
2015-16
$576,436
$0
$1,862,294
$0
$863,001
$863,001
$1,439,623
$0
$389,880
$389,880
$4,782,861
$1,252,881
The MUS relies predominately on Pell grants to support Need-based Aid.
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SOURCES
Financial Aid Awarded
Includes all types of financial aid awarded in the MUS except loans; includes all grants,
scholarships, waivers, and work study, 2015-16
Total = $132M
$55M
93% Pell
$41M
41% nonresident student
discounts
20% BOR
mandated
$32M
1/3 Need-based Aid
20% Athletic
$4M
Federal
42%
Institutional
Waivers
31%
Private/Inst.
Other
State
24%
3%
8
SOURCES
MUS Financial Aid, Total Dollars Awarded
$160,000,000
Need-based Aid
Non Need-based Aid
Need-based Aid includes State and Federal sources only
$141M
$140,000,000
$132M
$120,000,000
Increase in Pell Grants
$100,000,000
$80,000,000
$56M
$60,000,000
$40,000,000
$20,000,000
62%
43%
$0
Financial aid dollars have grown due to an increase in Pell grants and waivers/discounts.
9
SOURCES
U.S., Total Grant Aid by Source, 2015 Dollars
Source: Trends in Student Aid 2016, College Board
State
Private
Institutional
Federal Grants
National trends mirror MUS financial aid trends.
10
SOURCES
MUS Need-based Aid, Total Dollars Awarded
State & Federal Sources Only, 2002-2016
Federal PELL
Federal SEOG
Native Am. Waiver
State Aid
$90,000,000
$77M
$80,000,000
$70,000,000
$57M
$60,000,000
$50,000,000
$40,000,000
67M
$35M
51M
$30,000,000
$20,000,000
28M
35M
$10,000,000
$0
In the MUS, Pell dollars have dropped in the last five years due to enrollment declines,
enrollment mix, and program changes. State aid was also cut.
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SOURCES
State Funded Need-based Grant Aid per Undergraduate FTE
source: National Association of State Student Grant and Aid Programs, 2013-14
$1,400
$1,200
$1,000
U.S. Average
= $539 per student
$800
$600
$400
MT = $90 per
student
$200
WA
NJ
NY
CA
IN
PA
NC
TX
MN
IL
VT
WY
U.S.
OK
MD
KY
WI
WV
VA
DE
TN
CO
SC
OR
CT
MA
NM
IA
ND
ME
MI
MO
FL
NE
RI
AK
OH
LA
NV
KS
MT
HI
AR
MS
AZ
AL
DC
ID
UT
SD
GA
NH
$0
Montana trails most states in the amount of dollars it contributes to need-based aid.
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SOURCES
Need-based Aid per Student Receiving Need-based Aid
Need-based Aid includes State and Federal sources only
$$ per Student
# receiving Need-based Aid
20000
$$ per Student
$4,500
4300
4143
18000
$4,000
16000
$3,500
14000
$3,000
12000
$2,500
10000
$2,000
8000
$1,500
6000
$1,000
4000
$500
2000
$0
1
2
3
4
5
6
7
8
39%
9
10
11
12
13
14
0
38%
49%
% of Undergrads Receiving Need-based Aid
15
# receiving aid
$5,000
Nat’l % Pell = 33%
$$ per student remain steady while % and # receiving aid have dropped.
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Affordability
Indicators
FTFT Resident Cohorts: first-time, full-time residents students entering the MUS in
Fall semesters
Financial Aid = all types of financial aid except loans, including all grants,
scholarships, waivers, and work study
Lower Income Students = Pell grants are used as a proxy measure for low income
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AFFORDABILITY
Financial Aid Received
Academic Year Aid Received by First-time, Full-time Resident Students
All Campuses
90%
Avg Amount Received
80%
70% 67%
67%
73%
83%
50%
$5,000
$4,299
$3,654
60%
40%
% Receiving Aid
$2,634
$4,000
$3,000
$2,229
$2,000
30%
20%
$1,000
10%
0%
$0
Financial Aid = all types of financial aid except loans, including all grants, scholarships, waivers, and work study; Academic Year Amounts = amount received in Fall and Spring
semesters, does not include winter or summer sessions; Average Financial Aid = average amount received by all students, not just those receiving aid; source: MUS Data Warehouse
U.S. % receiving Grant Aid= 70%; Avg Amt. Received = $5,589 (4yr Public Institutions)
83% of Resident, 1st-time, FT students receive aid at an average amount of $4,300.
15
AFFORDABILITY
Percentage of Students Receiving Need-based Aid
1st-time, Full-time, Resident Students, 2015-16
Need-based
100.0%
90.0%
80.0%
70.0%
60.0%
Non Need-based
No Aid
15.1%
24.3%
17.4%
(452)
(700)
(248)
23.2%
(237)
50.0%
48.9%
42.4%
(1469)
(1706)
76%
40.0%
52.5%
30.0%
(536)
85%
83%
40.2%
36.0%
20.0%
(1617)
(1081)
10.0%
0.0%
2-year College
4-year University
Need-based Aid = Pell, SEOG, and/or NA Waiver
Non Need-based Aid = All forms of financial aid except Loans and Need-based Aid
MUS Total
U.S. % receiving Federal Aid = 38%
40% of FTFT residents received need-based aid.
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AFFORDABILITY
Average Aid Received by Need-based Aid Recipients
1st-time, Full-time, Resident Students, 2015-16
Need-based Aid
$8,000
Non Need-based Aid
$7,166
$7,000
$6,000
$5,000
$5,189
$2,835
$6,511
$2,226
$999
$4,000
$3,000
$2,000
$4,190
$4,331
$4,285
(81%)
(60%)
(66%)
2-year College
4-year University
MUS Total
$1,000
$0
Need-based Aid = Pell, SEOG, and/or NA Waiver
Non Need-based Aid = All forms of financial aid except Loans and Need-based Aid
The average FTFT resident need-based aid recipient received a total of $6,500 in aid.
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AFFORDABILITY
Percentage of Students Receiving Pell Grants
% First-time, Full-time Resident Students Receiving Pell Grants
70%
64%
65%
60%
55% 54%
50%
45%
40%
46%
52%
47%
46%
42%
35% 37%
43%
33%
40%
36%
33%
30%
25%
2-year
35%
Total
4-year
Flagships
Pell eligibility criteria
expanded
28%
Average Pell for
1st-time, FT, Res.
02-03 = $2,696
15-16 = $4,123
20%
Nat’l Avg = $3,724
Max
Pell:
$4,050
$4,050
$5,815
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AFFORDABILITY
Tuition & Fees
Academic Year Rates for First-time, Full-time Residents
7,000
$6,551
source: OCHE, BOR approved tuition & fees
6,500
Flagships
$6,075
5,000
23%
(UM/MSU)
6,000
5,500
10yr
%Chg
$5,414
$5,323
4-year
Regional
$5,058
$4,642
17%
(Tech, MSUB,
UMW, MSUN)
4,500
4,000
3,500
$3,116
$3,276
$3,352
3,000
2-year
Colleges
8%
(no CC's)
2,500
2,000
Freezes have slowed the growth of tuition and fees.
19
AFFORDABILITY
Average Amount of Financial Aid Received
Academic Year Amounts Received by First-time, Full-time Resident Students
$5,500
$5,000
$4,832
4-year
$4,500
$4,000
$4,294
2-year
$3,500
$3,000
$2,500 $2,426
$2,229
$2,000
$1,954
$1,500
$1,000
Flagships
$3,220
Financial Aid = all types of financial aid except loans, including all grants,
scholarships, waivers, and work study
Academic Year Amounts = amount received in Fall and Spring semesters,
does not include winter or summer sessions.
Average Financial = average amount received by all students, not just
$500
Financial aid amounts per student have experienced strong and steady growth.
20
AFFORDABILITY
Net Tuition & Fees
Academic Year Amounts for First-time, Full-time Resident Students
$3,000
$2,546
$2,500
$1,818
$2,000
$1,573
$1,268
$1,500
$1,000
$954
Flagships
$1,005
$1,003
$608
$968
4-year
$195
2-year
Colleges
$500
$105
$0
-$500
Net Tuition = Academic year tuition and fees minus
average amount of financial aid received by all
students (not just those receiving aid)
-$417
-$1,000
Tuition freezes and financial aid growth produced low net tuition & fees.
21
AFFORDABILITY
Price/Cost of Attendance
Academic Year Rates for First-time, Full-time Resident
$18,000
$16,566
Flagships
$16,000
$13,848
$14,000
Regional
4-year
$12,000
$9,829
$11,972
$10,000
$8,000
$9,068
$7,357
$6,000
$4,000
2-year
Colleges
The cost of attendance on this chart includes: tuition and fees, on-campus
room and board (avg off-campus at 2-year), and books and supplies. "Other
expenses" such as transportation, child care, and general costs of living were
excluded. The amount of books and supplies was normalized across all
campuses by using the System average.
$2,000
The total cost of attendance includes more than just tuition and fees.
22
AFFORDABILITY
Net Price/Cost of Attendance
Academic Year Amounts for First-time, Full-time Resident Students
$12,000
$11,120
$10,501
$9,620
$10,000
$9,194
$9,445
$8,274
$8,000 $7,600
$6,000
$6,642
$8,727
Flagships
4-year
2-year
Colleges
$6,359
$5,403
$4,000
$2,000
Net Price/Cost of Attendance = Academic year price
of attendance minus average amount of financial aid
received by all students (not just those receiving aid)
$0
Overall net price has increased, largely driven by the cost of room and board.
23
AFFORDABILITY
Average Loan Amounts for MUS Bachelor's Degree Recipients
(no parent PLUS loans included; borrowing activity = 8 years prior to graduation; includes
federal and non-federal loans)
Avg Loan Amt of Borrowers
Avg Loan Amt of ALL Students
% of students borrowing
$30,000
70%
27,503
$28,000
65%
65%
$26,000
63%
$22,000
61%
$20,000
55%
$18,000
16,687
$16,000
$14,000
60%
21,125
13,272
% Borrowing
Loan Amount
$24,000
50%
45%
$12,000
$10,000
40%
Student loan debt grew from 2009 to 2014 and then leveled off.
24
AFFORDABILITY
Average Loan Amounts for MUS Bachelor's Degree Recipients, 2015-16
(average loan amounts of students who borrowed; no parent PLUS loans included;
borrowing activity = 8 years prior to graduation; includes federal and non-federal loans)
by Pell Status
35,000
30,000
$30,065
25,000
$27,504
$22,598
20,000
15,000
10,000
% Borrowing
87%
61%
1,935 / 2,229
2,945 / 4,854
38%
1,010 / 2,625
5,000
0
Total
Non-Pell Recipients
Pell Recipients
A much higher percentage of lower income students rely on student loans.
25
AFFORDABILITY
Average Loan Amounts for MUS Bachelor's Degree Recipients, 2015-16
(average loan amounts for all students, not just those who borrowed; no parent PLUS loans
included; borrowing activity = 8 years prior to graduation; includes federal and non-federal loans)
by Pell Status
30000
25000
$26,099
20000
15000
$16,687
10000
$8,695
5000
# Graduating
4,854
# Graduating
2,625
# Graduating
2,229
Total
Non-Pell Recipients
Pell Recipients
0
Lower income students borrow over three times as much!
26
AFFORDABILITY
Retention & Graduation Rates by Pell Status
First-time, Full-time Freshmen Entering 4-year Universities in the MUS
Retention = Fall 2014 cohort, Grad Rate = Fall 2009 cohort
Pell
90%
Non-Pell
80%
79%
70%
60%
67%
50%
52%
40%
36%
30%
20%
10%
0%
Retention (1-yr)
Graduation Rates (6-yr)
Success rates of lower income students lag.
27
State Aid Programs
28
STATE AID
State Funded Need-Based Aid in MT
Montana Higher Education Grant (MHEG)
 The Montana Higher Education Grant (MHEG) is the original state appropriated
need based grant program in Montana. Along with the State Work Study
program, MHEG first received funding during the 1975-76 academic year under
its original name, the Montana State Student Incentive Grant.
 MHEG is awarded by financial aid offices to students who demonstrated
significant financial need.
 MHEG state funds are distributed to MUS Schools, Community Colleges, and
Tribal Colleges. Private institutions are not eligible to receive state funds under
the Montana Constitution.
 Allocations to the schools are based on the FTE Resident headcounts at each
institution. The FTE Resident headcount for the fall prior to each Biennium is
calculated allocations for both years.
29
STATE AID
State Funded Need-Based Aid in MT
Montana Tuition Assistance Program (Baker Grant)
 MTAP was created by the Board of Regents in 1997 as a result of the Task Force
on Financial Aid Reform report, Meeting the Challenge, Helping Montana
Students Finance College, dated April 1996.
 The goal of MTAP is to provide Montana students with financial assistance that
will allow access to, and choice of, Montana's public and private institutions of
higher education.
 The Montana Tuition Assistance Program (MTAP) was the largest state
appropriated need based grant program in Montana, receiving just over $2
million in funding.
 MTAP awards are also know Baker Grants in any student award documents in
honor of Dr. Jeffrey D. Baker, Commissioner of Higher Education from 1993-1996.
 MTAP state funds are distributed to MUS Schools, Community Colleges, and Tribal
Colleges.
 Allocations to the schools are based on Resident Student FTE at each institution.
30
STATE AID
State Funded Need-Based Aid in MT
State Work Study
 The Montana Work Study program was first introduced, along with the Montana
SSIG program (currently known as MHEG), during the 1975-1976 academic year.
The program receives approximately $800,000 in funding each year.
 Funds are appropriated to MUS colleges and the community colleges. Tribal and
private colleges do not receive any state work-study funds.
 In order to be eligible for the Montana Work Study program a student must
complete the FAFSA. Recipients must be Montana residents and accepted or
enrolled full-time at the institution.
 The majority of work-study jobs are awarded based on financial need, as
determined by the FAFSA. Recipients are paid an hourly rate according to the job
skills required. Work is limited to an average of 20 hours per week while class is in
session and 40 hours per week when classes are not in session.
31
STATE AID
State Funded Need-Based Aid in MT
Governors Best and Brightest
The purpose of the governor's postsecondary scholarship program is to
provide scholarships on the basis of need and merit to Montana residents
toward the cost of attendance at 2-year and 4-year postsecondary
institutions and to allocate some of the scholarships to specific areas of
study that promote economic development or address critical workforce
shortage areas in Montana. Half of the Best and Brightest is need based
and half merit based.
32
NEED-BASED AID
State Approaches to Financial Aid Management
 Merit aid versus Need-based aid
 High cost with high aid – NY, NJ, PA, NC
 Low Cost with low aid – MT, UT, SD, ID
 Centralized financial aid administration – NY, TN, IN
 Decentralized financial aid administration
33
Summary
34
SUMMARY
Summary Bullet Points
 Need-based Aid
 Need-based Aid is financial aid that students receive if they have financial need.
 The formula used to calculated financial need is COA – EFC = Need.
 EFC varies based on family income, size and number in college, as well as assets,
and other financial indicators.
 Sources of Aid
 The MUS relies predominately on Pell grants to support Need-based Aid.
 Financial aid dollars have grown due to an increase in Pell grants and
waivers/discounts.
 National trends mirror MUS financial aid trends.
 In the MUS, Pell dollars have dropped in the last five years due to enrollment
declines, enrollment mix, and program changes. State aid was also cut.
 Montana trails most states in the amount of dollars it contributes to need-based
aid.
 In the past seven years, need-based aid dollars per student remain steady while %
and # receiving aid have dropped.
35
SUMMARY
Summary Bullet Points
 Affordability Indicators
 83% of, 1st-time, FT (FTFT) resident students received aid at an average
amount of $4,300.
 40% of FTFT residents received need-based aid.
 The average FTFT resident need-based aid recipient received a total of $6,500
in aid.
 Freezes have slowed the growth of tuition and fees.
 Financial aid amounts per student have experienced strong and steady
growth.
 Tuition freezes and financial aid growth produced low net tuition & fees.
 The total cost of attendance includes more than just tuition & fees.
 Overall net price has increased, largely driven by the cost of room and board.
 Student loan debt grew from 2009 to 2014 and then leveled off.
 A much higher percentage of lower income students rely on student loans.
 Lower income students borrow over three times as much!
 Success rates of lower income students lag.
36