Financial Aid

Today’s economic conditions are monopolizing discussions among leadership teams and boards of trustees at many colleges and universities. It is a nerve-wracking time, to say the least. Financial stresses now loom very large in pending decisions about enrollment, tuition increases, net revenue, financial aid policies, and discount rates.

Here are four immediate strategies to consider how to manage these challenges in ways that do not compromise an institution’s long-term strategy and sustainability:

Over the last two years, tax-exempt colleges and universities have become targets of increased scrutiny by the Secretary of Education, the Internal Revenue Service ("IRS") and the Senate Finance Committee. With the looming budget crisis and an ever-increasing deficit, regulators are taking a hard look at whether these institutions are providing the public benefits commensurate with the tax breaks they receive as a result of their tax-exempt status.

WHEN ANALYZING FINANCIAL AID strategies for our clients, one of the questions we always ask is “Are you at capacity?” For many institutions, this is a difficult question to answer, and often we hear different answers from different corners of the campus.

A decade ago, data at Florida State University was dumped into so many disparate silos that any kind of timely strategic comparison was impossible.

THE ECONOMIC DOWNTURN is sweeping the nation, affecting nearly everything and everyone. Financial aid is no different. The shaky economy has sparked several trends threatening to place unprecedented strains on financial aid programs and budgets.

The recent credit crunch that destabilized the mortgage market and leaked to student loans, along with a heightened public awareness of the impacts of student debt, has brought to light the very real need for student loan reform. As we watched the events of the past few months unfold, the higher education community has been forced to face the fact that the dislocation in the credit markets could pose a real threat to the delivery of student aid.

THE WORLD’S FINANCIAL markets spent the latter part of 2008 in an unprecedented state of volatility. Pictures of frazzled and depressed traders became one of the worst clichés in the news because they seemed to run every day.

A USA TODAY HEADLINE states, “Tuition Hikes Will Ease.” The article opens, “The price tag for college tuition is continuing to climb this year, but experts are predicting less sticker shock than in the past two years.”

ON AUGUST 14, 2008, LIFE as financial aid officers knew it changed drastically. That day, President Bush signed the Higher Education Opportunity Act (HEOA) into law, setting into motion many changes that will directly affect operations in the financial aid office as well as operations in other offices on campus.

AT LAST--AFTER SIX YEARS, three Congresses, and 14 extensions of the existing law, the House and Senate finally agreed to legislation reauthorizing the Higher Education Act, and in August President George W. Bush signed it.