How is Financial Aid Changing and What are the Effects?

by Andrew Hibel

Article content is provided by HigherEdJobs.
In this month's Higher Ed Careers Interview, Andy Hibel spoke with Billie Jo Hamilton, associate vice president of enrollment planning and management at University of South Florida and chair of the National Association of Student Financial Aid Administrators (NASFAA) board of directors. They discuss how NASFAA is supporting higher education professionals, best practices in financial aid, and how current policy proposals may impact financial aid for students and institutions.

Andy Hibel, HigherEdJobs: Ms. Hamilton, in addition to your role at the University of South Florida, you are also the national chair for the board of directors with the National Association of Student Financial Aid Administrators (NASFAA). Briefly explain your role at NASFAA and your passion to be involved in various capacities with the association over the years.

Billie Jo Hamilton, associate vice president for enrollment planning and management, University of South Florida: As chair, I have the privilege of working with a Board of committed aid professionals who set the strategic direction for the association, as well as an energetic and talented NASFAA staff who effectively carry out the work needed to meet our strategic goals. My involvement in professional associations is one of the reasons I have stayed in financial aid for over 37 years, as they provide a network of supportive colleagues, training from actual practitioners, and an opportunity to be a voice for my students.

Hibel: What is the mission of NASFAA and how does the association work to support higher education professionals?

Hamilton: NASFAA's mission is to provide professional development and services for financial aid administrators, advocate for public policies that increase student access and success, and provide a forum on student financial aid issues -- all while maintaining a commitment to diversity. Through various modes of delivery, we provide training and credentialing, as well as support for our members to advocate for students. We also keep our members educated on a broad range of issues affecting higher education through our daily Today's News e-newsletter. These are just a few of the many benefits afforded our members.

Hibel: In terms of operating an efficient and effective financial aid department on campus, what are some best practices that every institution should consider?

Hamilton: Because financial aid is critical to so many students, institutions need to make sure that staffing is adequate, training is in place, and the necessary technological support is available to ensure compliance with regulations. The loss of federal aid eligibility would be catastrophic for most schools. There must also be an understanding that compliance is not just the responsibility of the financial aid office, but an institutional responsibility.

Hibel: February is Financial Aid Awareness Month. In addition to spreading awareness and information to students and families about federal and state aid, for example, how to compare award letters, in what other ways does the association support students?

Hamilton: Much of the work we do involves advocacy for our students. Our member institutions represent 90 percent of undergraduate students enrolled in post-secondary education in the U.S., so our voice has broad representation that brings strength to the positions that we take. We are the experts on how federal policy affects students "on the ground" and we take that responsibility very seriously.

Hibel: According to the Prosper Act fact sheet, the House of Representatives Committee on Education aims to "simplify and improve student aid by moving to a one grant, one loan, and one work-study system. Our reasonable annual and aggregate loan caps on all borrowers, combined with institutional flexibility to lower loan limits, robust annual loan counseling, and the elimination of costly hidden fees, will help students borrow responsibly to pay for their education." What are your thoughts on these potential changes?

Hamilton: The Prosper Act is a broad bill that spans a wide array of student aid provisions. Naturally there are aspects of the bill that we strongly support, like expanding eligibility for Pell Grants, giving schools the authority to limit borrowing, and providing more dollars for students who take additional credits. But there are some provisions in the bill that would be detrimental to students, like eliminating supplemental grants and loan forgiveness programs. This bill represents the first legislative step in the reauthorization process and there is still plenty of time for advocacy work. We'll continue to work with lawmakers to bring a bill to the president's desk that first and foremost works for students.

Hibel: What other changes could be made in order to make the financial aid process either easier or more beneficial for students and families as well as colleges and universities?

Hamilton: One of the best things to happen to families who file the Free Application for Federal Student Aid (FAFSA) was the ability to download and import tax information directly from the IRS. This makes completing the application less onerous and improves the accuracy of the data provided. We support expanding the number of data elements that come from the IRS to reduce the additional documentation "post application" that families in certain tax situations have to provide. We also advocate for more FAFSA simplification, specifically for families who have already been approved for other federal needs-tested benefits.

Hibel: President Trump proposed changes to student loans and financial aid which are pending senate approval. He suggests forgiving a student loan balance after 15 years of responsible repayment, decreasing funds available to the Stafford Loans, cutting the student loan interest deduction on taxes, and taxing graduate student waivers. What are possible effects of these proposed changes?

Hamilton: The President's budget would consolidate, eliminate, and reduce several vital student aid programs. If the expectation is that states, local governments, and families will fill in the gap, I suspect that is an unlikely outcome -- and for many students from low income families, the dream of a college education will be unrealized.

Hibel: In an article it was stated that one company is handling nearly half of all student loan payments. Additionally, it went on to say that that roughly one million people defaulted on their student loans last year which signifies that student loan services aren't acting in the borrowers' best interest. Do you agree with this statement and what do you think can be done to reduce the default rate?

Hamilton: It continues to be frustrating that with income-contingent repayment plans that could be as low as $0, borrowers continue to default. The numerous loan repayment options for students have created an unintended consequence -- borrowers have difficulty figuring out what is best for them in their current financial situation. One of the ideas that has surfaced is repayment of student loans through the federal tax system. There would be a withholding category, similar to social security taxes, that goes to repaying a worker's student loans. This would simplify the repayment process for a large majority of student loan borrowers and keep them from the awful consequences of default.

Hibel: If you were providing advice to a higher education professional looking to start a career in student affairs, specifically working with financial aid, what advice would you give them in order for them to succeed in their position?

Hamilton: I am not sure there is a clear-cut path to a successful career in financial aid! I do know that the field requires multiple areas of expertise: the ability to translate laws and regulation into practice, the coordination of multiple technology systems to deliver dollars and customer service to students, the management of human resources in a complex and ever-changing environment, and advocating for students, all while contributing to the mission of your institution. They need to recognize that a financial aid career is challenging and sometimes difficult, but it can also be the most rewarding job one could ever have!