Cost of Attendance Report for 1997
How Does Financial Aid Work?
Determining Financial Need
The underlying premise of financial aid eligibility is that the studentís cost to attend college must exceed what the student and/or his family is expected to pay (EFC). The EFC remains constant regardless of which institution the student chooses to attend. The institution determines whether the student has "financial need" by first calculating its "cost of attendance." As illustrated in the example below (Table 4), this includes costs above and beyond tuition and fees such as books, housing, food, transportation and other miscellaneous expenses. These costs are computed even if the student plans to commute to campus.
The institution subtracts the student/family contribution (EFC) from the "costs of attendance." The difference is what is known as the studentís financial need. The role of the financial aid administrator is to attempt to offset the financial need with a "financial aid package" consisting of grants, loan and/or campus employment. The proportion of the package made up of grants, loans and work can vary significantly from one institution to the next depending on available funding and aid packaging policy. Some independent colleges, for example, use more rigorous need analysis methods to determine who will get aid. If an institution wants to improve the academic profile of its student body, it may award grant aid to needy students with the strongest academic credentials, not necessarily the most needy. Similarly, if an institution wants to increase its revenue stream, it may provide grant aid to students who come from families that are capable of paying for a major share of educational costs as opposed to very needy students whose families are able to contribute only small amounts.
It is important to note, however, that many Connecticut public institutions do not meet the entire amount of financial need. This is discussed more fully later in this report.
Types of Aid Available
Students receive financial aid from a remarkable array of sources including the federal government, the State of Connecticut, and college and university resources. Table 5 on the following page highlights the major sources of financial aid for Connecticut students for 1997-98.
The federal government plays a significant role in providing student financial assistance to students attending colleges and other schools in Connecticut. Table 6 on page 15 shows the amount of federal funds received by Connecticut since 1987 under the major federal financial aid programs, excluding federally guaranteed student loans. In 1995-96, the stateís colleges, universities and proprietary schools received almost $50 million in federal support. More than $34 million, or 69 percent, of the funds came in the form of Pell grants which aid the neediest students. Funding of this program (maximum award amounts) has not kept pace with the growth in tuition and fees. For example, funds to Connecticut have grown by just 37 percent since 1989, compared to average tuition and fees increases of 110 percent at our public colleges and universities during that time.
It is important to note the amount shown for Perkins Loans represents the amount of new funds made available to Connecticut institutions and does not reflect the amount of loans made under this program each year. This program operates on a revolving fund basis whereby loan repayments are used to make new loans.
In addition, Connecticut is a major recipient of funds under the National Service Act. Participants who complete their assignments are eligible for education stipends. By the end of this year, it is estimated that over the last three years, participants in Connecticut will have earned $2.7 million in education benefits.
Connecticut has three major financial aid programs. The Connecticut Independent College Student Grant (CICSG) program provides funds to the stateís independent colleges based on the number of Connecticut residents attending each school. Colleges select recipients according to each institutionís financial aid packaging policy. Recipients must exhibit financial need and be Connecticut residents. But no determination is made by the state as to the extent of need to be addressed. In 1996, a total of 3,714 Connecticut residents received an average of $3,264 under this program. Average awards by institution ranged from a low of $930 to a high of $6,180.
The Connecticut Aid for Public College Student Grant (CAPCS) program provides funds to the stateís public colleges. The funding allocations are based on a formula which incorporates the amount of federal student aid dollars available at each college. Like CICSG, public colleges select recipients according to their institutionís financial aid packaging policy. Recipients must exhibit financial need and be Connecticut residents. An average award of $776 was made to 7,165 students in 1996.
Requested appropriations for CICSG and CAPCS are tied to statutory formulas. For CICGS, the formula is based on a percentage of the average state subsidy at our four-year public institutions. Currently, the percentage is set at 17 percent. As shown in Table 7 on the following page, the formula has never been fully funded. For the current year (FY 1997), the program is funded at $12.06 million which represents 78 percent of full formula funding.
The CAPCS formula is intended to match institutional tuition funds set aside for student financial as required by the Board of Governorsí tuition policy. Under this tuition set-aside policy, public institutions must earmark at least 15 percent of all tuition revenue for student financial aid. With the significant growth in tuition rates over the last 10 years, the amount of required tuition set-aside funds has grown to over $21 million as illustrated in Table 7. CAPCS funding has remained stagnant during that time, and now represents just 26 percent of full formula funding.
The Connecticut Capitol Scholarship Program (SAG) is a need-based student grant program with a highly competitive academic screen. Currently, only students in the top 20 percent of their class or who score above 1,200 on the SATs are eligible for consideration. Recipients are selected based upon the familyís ability to pay for college. This is the only state administered program which awards grants directly to students. Students are permitted to take a maximum of $500 to out-of-state institutions if the state has a reciprocity policy. In-state awards range from $500 to $2,000 dependent upon the cost of education and the familyís ability to pay. Last year, 2,599 students received an average of $1,064. The current appropriation of $2.1 million has remained essentially flat since 1988. The Department of Higher Education has supplemented monies for this program with funds provided under the federal State Student Incentive Grant (SSIG) program. Funding for this federal program has been declining and Connecticut currently receives just $416,000.
In addition the tuition set-aside funds described above, the state also provides an array of non-need based tuition waivers, commonly referred to as "statutory waivers." Currently, members of the National Guard and certain veterans are eligible for these benefits, as are senior citizens on a space available basis. Although the statute calls for a percentage reimbursement by the statute for the revenue loss associated with these waivers, funds for this purpose have never been appropriated. Therefore, the cost of these waivers must be borne by the institutions and, in effect, passed onto other students. As shown in Table 8, the cost of the waivers exceeded $4.8 million last year, and is estimated at $5.1 million for this year and $5.3 million for next.
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