I haven’t met too many financial aid administrators who say, "Gee, what really attracts me to this profession is all the administrative jargon, paperwork, high salary, and rules and regulations I have to follow." The financial aid administrators I know came to this profession in different ways, but they stay in the profession for the same reason: to help students.

There’s something noble about going to work everyday and knowing that we’re reaching back to help others better themselves through education. We don’t dole out money; we give out opportunities for self-improvement, self-reliance, and a better life. Even though our students can be demanding, impatient, and at times overbearing, we love them and it feels good to know that we’re making a difference. Besides, who can blame them for being a little stressed and on-edge?! Financial aid is ridiculously complicated and these students’ lives often time hang in the balance.

Unfortunately more and more our time is taken up with administratively burdensome programs that have questionable value for students. With programs like ACG, SMART, and TEACH, who has time to counsel students anymore? These complex programs take a lot of manpower to implement and don’t seem to be doing a whole lot to increase access.

We know that the number of students participating in the ACG and SMART Grant programs is way below initial estimates. The Chronicle of Higher Education recently reported that "Department officials blame the lower-than-expected numbers on confusion about the programs’ requirements and the dearth of low-income high-school graduates who had completed challenging courses of study."  Jeff Baker mentioned at the SASFAA Conference that the Department would be mailing letters to approximately 400 institutions that had not issued one ACG or SMART Grant. 

I’m concerned that we’re seeing a trend where the benefits of new FSA programs are significantly diminished by their complexity. The TEACH Grant is a good example. It is taking an enormous amount of effort to implement and work out the details of this program.  Some software providers have simply shrugged and said, "We’ll be unable to program the TEACH Grant until 2009."

But mostly I shudder to think about trying to explain all of these details to students. I know it is initially a grant - in theory - but I can’t help but wonder how many students will actually qualify for it. Terry Hartle, American Council on Education, had a memorable comment when he commented on the TEACH Grant: "It’s not really a grant, it’s not really a loan, we’re calling it a GROAN!" (and you may hear GROANS nationwide as FA staffs begin to wrestle with the complexity).

I can just picture students not meeting all of the requirements for the program and finding themselves even further in debt once their grant reverts to an unsubsidized loan where the interest is back-dated to the time of disbursement.  Mark Kantrowitz recently wrote, "Students who accepted $16,000 and failed to meet the conditions 8 years later would owe $ 27,424.  On 10 year term payments would be $ 315.60, for cumulative payments of $37,871."

For students who do not teach full time for at least four academic years within eight calendar years of completing the program of study for which they received a TEACH Grant, this program will appear as a wolf in sheep’s clothing. We as financial aid administrators will most likely bear the brunt of that ill will. But more importantly than our difficulty in implementing it, is the adverse effects it will have on these students. 

I am grateful that NASFAA staff has been following this program very closely. Comprehensive updates of the negotiated rulemaking process, reports from the news media, and updates from the Department are all located on the NASFAA Teach Grant Implementation Resource page.

NASFAA’s updates are important because the rules seem to be changing all the time. Jeff Baker from the Department probably said it best at SASFAA. 

"Implementing the TEACH Grant is a lot like putting a bike together while riding it."

It’s vital that we continue to raise our voices and opinions about these programs to our elected officials. NASFAA has provided Tips for Communicating with Congress to help us with those efforts. NASFAA continues to lobby on the Hill for need-based programs that will benefit the most students. But as NCHELP President Brett Lief told a SASFAA audience, we also need to ensure that our college presidents are echoing our messages through other higher education associations who have not traditionally given a strong voice to financial aid.

I remain optimistic that if we keep our focus on the very thing that has kept so many of us active in this profession - our students - together with others we will continue to shape effective financial aid policy that truly helps those who need it most.

Student loan providers were reeling last week, and it looks like students - especially low-income students - will be bearing the brunt of the fallout. Last week, Sallie Mae announced that they would stop making loans at colleges with poor graduation rates - making no differentiation between private and FFEL loans. Nelnet also announced last week that they would be cutting more than 300 jobs and suspending loan consolidations. Other loan providers are having trouble raising capital for new student loans because of bond downgrades and instability in the lending markets.

The Career Colleges Association (CCA) released a statement expressing concern about the pullback in private student loan dollars. CCA President Harris N. Miller said:

“Access to private lending sources is absolutely critical for many working adults to be able to bridge the gap between federal grant and loan program limits and actual tuition costs. Our member institutions tell us that many lenders have stopped subprime private lending and may stop private lending altogether. Their retreat may leave many students unable to finance the balance of their educations.”

Indications tell us that we should be bracing for another recession in the coming months, which usually indicates that many out-of-work individuals may return to school to sharpen their skills. With a pullback in private student loans - and in some cases, federal student loans - I think we have reason to be concerned.

All of these recent actions seem to be the result of a culmination of issues. Troubles in the subprime markets, student loan subsidy cuts from the CCRAA, and lack of sufficient federal aid may all be contributors. The serious question becomes: how many students will be adversely affected by all of this and what should be done about it?

Certainly increasing federal student aid, including the Pell Grant and federal loan limits is a good beginning. Finding a nonpartisan, nonpolitical way to set lender subsidy rates may also be useful to ensure a healthy and sustainable student loan market that remains focused on students.

Still, perhaps it is better to wait and see what happens in the both the private and federal student loan markets. Private student loans - much like subprime mortgages - may never recover. That might not be too bad for some students who would be better off avoiding them altogether.

What are your thoughts and what are you seeing on your campuses? Is it best to wait and see how these markets pan out or does there need to be some sort of immediate action to ensure that FFEL and private loan funds are available to students?

Today NASFAA published comments from several aid administrators about the College Cost Reduction and Access Act (CCRAA). I applaud our colleagues for taking the time write very thoughtful responses. Their perceptions help me see several sides of important issues.

Like others, I feel our money is best spent within the existing Pell Grant program. And where there may be some advantages for tax payers with loan auctions, there are disadvantages for transfer students who will be forced to deal with multiple PLUS lenders (since winning bidders may differ from state to state). And then there is the unintended consequence of parents who may encourage their children to use the same loan provider they were forced to use (since parent’s choice will be limited to the two winning bidders in that state), further undermining the principle of lender choice.

And will the Teach Grant be an empty promise for many students… with enormous administrative complexity and costs? Congress has been talking about simplifying everything, but then continues to create more programs that are ever more complicated.

I’m interested in your thoughts. Which provisions concern you most? Which do you find most positive for our students? Tell me what you think.