Shifting Perspectives: Financial Aid Efficiency and Compliance
The Financial Aid Grind
There’s something students and financial aid staff have in common: they both suffer from process overload. As much as students struggle to complete all of the paperwork and keep track of their course eligibility, financial aid offices are laboring over applications, disbursements, and documents in hopes of remaining compliant with the Department of Education’s requirements. It’s a continuous and exhausting treadmill of to-dos that never seems to ease.
Higher learning institutions do the best they can with the resources they have. Students try their hardest to complete their financial aid applications in time. Then, they wait. With so many applications coming in at once, it takes time to sort through them all, let alone find errors and omissions that require more input from the applicant. It can take months for the financial aid staff to recognize the missing information, track down the student to inform them and walk them through the corrections. Students can spend hours with the call center asking questions and getting help, costing the school thousands of dollars in support. Tragically, many students never get notified, understand why their application was declined or learn of their errors until after the deadline.
All of this drudgery and we haven’t even touched upon the issues with course eligibility. With many higher learning institutions, there are no safeguards to ensure financial aid students do not enroll in classes that fail to contribute to their degree requirements, thus become ineligible for financial aid. Classes are paid for without visibility into whether or not they qualify for financial aid, putting the institution at risk for noncompliance and hefty fees.
Related: New Administration, New Financial Aid Scrutiny
Many students enroll in ineligible classes because they are simply interested in the class and fail to realize the implications of taking an ineligible class. They have no degree roadmap or guided pathway to show them every class option they could take, in the order they should take them, to reach their degree requirements the fastest. Instead, they meander through the educational journey, taking longer than anticipated and racking up debt – both of which are the leading causes for dropout.
- 60% of four-year college students graduate within 6 years
- 1 in 3 students enrolled in community college will graduate within 3 years
- 31% of 22- to 30-year old college dropouts stated their major reason for leaving college was their inability to afford the education
- “Taking the wrong courses” ranked as the 6th most common reason students drop out of college
Because so many of today’s students work and have families, the financial burden of paying for their rising education costs is simply too much. In the balance of work, family and school, something eventually has to give. The harder financial aid is to manage and the more debt that is incurred, the more likely school will be the dispensable option.
Making It Easier for Students and Staff
Simplifying the application and financial aid management process would, of course, do wonders for the both the institution and the students, but how? With federal dollars and the Department of Education in the loop, it isn’t always easy to make improvements. Every application must be completed a certain way before it goes through the standard steps which require so much human interaction. Where there is repetition and standardized processes, there is always room for automation.
Automation via modern software technology is turning the financial aid process on its head. When steps can be automated, the burden of labor is lifted from staff so they can focus on other tasks. The process is faster, more fluid, and infinitely more efficient. Students and parents are empowered with sequential to-do lists, keeping them informed and organized.
Once the financial aid application is received by the institution, it is automatically uploaded into the ERP system and automatically verified for incomplete or erroneous information. The software notifies the institution if the application is complete and the student if there is something missing – within 24-hours of submission. Links to tutorials guide them on how to fix their problems themselves and complete their applications as needed.
When students have real-time access to the status of their application, they can enroll in courses with confidence, choosing only the courses they know will qualify for aid – or at least understand how their choice will impact their budget and graduation goals. Automation and access also give students the ability to map out their coursework semester-by-semester, seeing which course options would get them to their graduation goals the fastest. By taking only the eligible courses in the order they should be taken, students are more likely to stick to their plan and graduate on time and within budget.
Related: How Financial Aid Course Audit (FACA) Is Helping Students Get The Most Out of Financial Aid
Institutions can dramatically reduce their risk exposure through automation. It becomes simple, even basic, for a financial aid office to evaluate whether or not a student should be paid for a class. Ineligible classes can be flagged before students enroll. PeopleSoft, the SIS system of choice for many higher learning institutions, simply isn’t capable of performing a degree audit on every student. It takes another layer of technology to optimize PeopleSoft and automate the process.
The Marriage of Technology and Academics
Higher learning institutions have been relatively slow to break down the silos that often exist between IT and academics. Some schools are traditional and believe the programs, services and processes used in the past are sufficient for today. They are more hesitant to adopt newer technologies. This mindset, however, can be detrimental to the student and the institution.
When technology supports academic initiatives, and today’s students influence those innovations, real transformation occurs. Students are empowered to take control of their own educational journey, equipped with the information they need to stay on track and the technology required to enable them to do so. Institutions streamline processes, reduce labor and expenses, and contribute to the goal of every stakeholder – on-time graduation.
The more students who graduate on time, the more funding schools receive. The fewer dollars institutions must spend on resources to complete manual tasks, the more they can maximize that funding. Automation is the key. Without it, resources and dollars are wasted. With it, however, students and staff can do more with less.
The financial aid process doesn’t have to be so difficult. It can be, and must be, simplified and made more efficient. Students demand and deserve it. Institutions’ viability depends upon it. It requires a symbiotic relationship between academics and technology to make it happen.
New Administration, New Financial Aid Scrutiny
The Challenges for Students and Higher Learning Institutions
We’ve heard so much about President Trump’s first 100 days – what has been accomplished, what has yet to be accomplished, and new policy changes. Every U.S. president is subjected to scrutiny when it comes to this 100-day milestone. One of the hot issues for this administration comes under the education headline. The confirmation of Betsy DeVos as Education Secretary guarantees plenty of changes to many education policies, many of which are centered around financial aid.
Student loans and financial aid has always been complicated. President Obama attempted to simplify it but even after eight years in office, its complexity still looms. Everything from applying for financial aid to paying it off (or not) is equally confusing. With the new administration firmly in place, it doesn’t look like it will get much easier any time soon.
Higher learning institutions are in the crosshairs. They have increasingly more students applying for financial aid, yet the process has become so burdensome, there are still billions of federal student aid unclaimed every year. Nearly $3 billion of unclaimed federal student aid is attributed to students not filling out the required FAFSA. That totals nearly $6,000 of Pell Grant funds per high school graduate that was never claimed. To make this application process more daunting, the IRS has suspended its Data Retrieval Tool that made it somewhat easier for students to automatically pull their tax information to the FAFSA paperwork.
Another issue for students is paying off the loans they do obtain. Trump/DeVos policies may make it more difficult for defaulted borrowers to avoid high fees or be “forgiven” of their loans under certain circumstances. It may also be more complicated to manage multiple student loans because there is no centralized platform where students can repay their loans.
What It Means for Higher Learning Institutions
Higher learning institutions may not be able to do as much as they’d like to help shape the politics or policies surrounding education, but they can do plenty to help students incur less debt and ultimately be more successful as they navigate their student loans. With the cost of tuition increasing, colleges and universities must find ways to make obtaining financial aid easier. They must also go a step further to helping students stay within their financial aid requirements, enrolling in only qualified classes that are covered under financial aid.
The single best thing a higher learning institution can do to help students is to ensure better stewardship of financial aid dollars. More than ever, students cannot afford to waste a single penny of financial aid. For every dollar squandered, the student is at greater risk for dropping out of school, incurring more debt than they anticipated, and spending more years to pay off that debt than they ever imagined. With student success and student outcomes prominent themes in higher education, ensuring students can achieve their educational goals without sacrificing their economic future should be a high priority.
Making The Path Easier to Navigate
When a student decides to pursue postsecondary education, they do so with plenty of hope and big dreams. These dreams never included lifelong student loan debt or dropping out of college midway through their journey. Unfortunately, that’s exactly what happens to many students and much of it could be prevented with the use of modern technology.
Once students are approved for student loans and financial aid, the clock begins to tick. They have only a certain amount of time (usually four to six years) to use their money grant(s) before it expires. It’s not quite that easy, however. Only certain courses are eligible for the financial aid – those that fulfill specific degree requirements. Any class that has not been deemed as degree-necessary will not be paid for with financial aid, meaning students will have to pay for those classes out of pocket or take out additional loans to cover the cost.
Related: Virginia Community College Case Study
While this policy seems simple enough, it’s surprising to see so many schools struggle to make the course enrollment process transparent for students. It’s often left up to the student to determine which courses to take after researching which are eligible for financial aid. Many enroll, believing a course qualifies for financial aid, only to find out after they’ve paid for the class and purchased their books that it is ineligible. They then must begin the enrollment process all over again. It is frustrating and there are too many ways a student can make a mistake.
Technology Helps The Institution Comply and Makes The Student Journey Easier
Fortunately for both higher learning institutions and students, technology is finally answering the demand to make the student journey easier. HighPoint has spent decades building products to help students become more self-sufficient and successful. When students can access the information they need to find information quickly, perform self-service tasks instead of scheduling and attending appointments with staff, and follow their path towards their goals, they do better.
HighPoint Financial Aid Automation helps financial aid offices move the students through the financial aid process efficiently. HighPoint Financial Aid Course Auditor gives students and staff quick confirmation that the courses selected will, in fact, qualify for financial aid, in plenty of time to drop the courses and choose others that do qualify. HighPoint Roadmap presents students with the most direct route towards graduation so they’re less likely to take a costly detour.
Related: How FACA Is Helping Students Get the Most out of Financial Aid
It’s applications like these, available via mobile apps, that not only give students the information they need to succeed but give them the ability to take control of their educational journey in a way they can truly engage. They stay informed of their progress, keep tabs on their financial aid, and enroll in courses they know will be paid for by financial aid. The result? More on-time graduation, less unnecessary debt, and a better overall student experience.
What We Can Expect
With only 100 days under his belt, it is difficult to know exactly what policies will change under the Trump administration. Everyone may have their opinions, but at the end of the day, we are all just waiting to see what will happen. No matter who is in office and what policies are passed, higher learning institutions can make the financial aid process much easier for students.
The first step is giving students access to the information within PeopleSoft. When students have insight into their degree requirements, course eligibility, and road maps on the most efficient way towards reaching their goals, everyone wins. There is less burden on the institution, less risk for noncompliance, and a dozen benefits for the students.
Higher learning institutions shouldn’t be at the mercy of each new administration. They can invest in technology and programs to modernize their platform to be more responsive towards student demands. They can give students more freedom to own their own journey. They can assist students in being good stewards of the financial aid they’ve been granted. In essence, they can implement initiatives that put the students first.