Having been in the financial aid profession for twenty
years, I've seen many changes. What hasn't changed is the need for students to
fund their educations, and to do so appropriately and responsibly. For students
and their parents, this task may seem daunting. Thankfully, the U.S. Department of Education regulates policy
overseeing this process, making it consistent across the board, regardless of
which post-secondary institution the student chooses to attend. Schools have
processes in place to make sure they follow these regulations, but depending on
specific nuances or limitations of a school (such as varying technologies, for
instance) there might be subtle differences in the way students are awarded
financial aid. That's where NASFAA (the National Association of
Student Financial Aid Administrators) becomes invaluable to the continuing
education of a financial aid administrator.
What Is NASFAA?
NASFAA's annual conference is held every summer. Here, financial aid professionals representing thousands of institutions from across the country come together to share best practices, receive updates from the federal government, and attend sessions with topics relevant to their profession. A lot of magic happens here, and all of it happens with the student's best interest in mind.
This year, NASFAA's conference was held in Austin, Texas, where 2,500 financial aid professionals gathered to celebrate the industry and find solutions to an ever-changing regulatory environment, rising interest rates, new technologies, and a student population with new and different expectations.
Federal Policy Changes
Naturally, many discussions were held surrounding college affordability. Interest rates increased on federal student loans, including the PLUS Loan, which is now at 7.6 percent. This is a jump from last year's rate of 6.31 percent, making private loans more attractive in many cases. Another change worth noting was the total wind-down of the Perkins Loan Program and a reminder that institutions cannot make new or subsequent disbursements to undergraduate students after June 30, 2018.
Ultimately, these changes are meant to ensure that students borrow only what they need. This was also a huge topic of discussion, with the national student loan debt standing at $1.5 trillion (or roughly $39,400 per student borrower). Turning the tide will be a tall task. More information—and the latest updates—about how the federal government is handling financial aid and student debt can be found at studentaid.ed.gov.
Gen Z in College
There was also buzz surrounding the attitudes and culture that define the incoming college student body and how to best align to these students' financial aid expectations. For the first time in twenty years, we have seen an obvious shift in mindset from a new generation, members of which now make up the majority of the country's college population. What sets these new students apart is that Generation Z sees themselves as consumers. With debt in the headlines, these students question the return on investment on a college education more than those who came before them.
According to the College Board, the average cost of attendance at a four-year private postsecondary institution is $46,950 per year. The average cost of attendance at an in-state four-year public school is $20,770 per year, ballooning to $36,420 per year for out-of-state public school. Gen Z expects fast and continuous updates on all things that touch their investment and complete and total transparency in the business process. All of this presents challenges within a financial aid industry that must adapt and align with this new student.
Also discussed heavily at NASFAA 2018 was the issue of institutional accountability. Lawmakers are working toward reauthorizing the Higher Education Act (HEA), and as part of this process, want to find ways to hold colleges accountable for student outcomes given the billions of financial aid dollars provided to students by the federal government. At the same time, financial aid officers want the best for students and the institutions they choose to attend and are working with the federal government to shape new policy initiatives around this issue.
NASFAA president Justin Draeger pointed out that the idea of institutional accountability is neither a conservative nor a liberal position; it's one topic that has garnered bipartisan support. Much of the recent discussion on accountability has focused on ideas of institutional risk-sharing related to student loan defaults or repayment rates, but other versions of accountability are being explored as well.
Changes fuel the energy at NASFAA's conference each year. While attendees come from schools scattered across the country, they are bound by the same goals and responsibilities to serve the best interest of the student. NASFAA reminds us every year that financial aid administrators are, in a sense, super-heroes who adapt to changes readily and effectively in their profession. They are also very approachable and should always be considered the first resource for information when seeking answers to financial aid questions.