The Black Box

For students and their families, financial aid has been called the most “complicated black box in the world,” as it deals with terms that may well be a separate world to you.  In the coming months, I will use this blog to help de-mystify financial aid by letting you inside the workings of the “black box.”

Quite frankly, we are at times as confused as you are.  SCHEV, the higher education coordinating council for Virginia, lists 30…that’s t-h-i-r-t-y,…separate state aid programs.  In addition, we administer many federal, state, and private programs, all of which have their separate guidelines.  Making matters worse is a lag in guidelines to run the programs.  We sometimes get issued federal “Interim Final Regulations.”  Think about that…shouldn’t “interim” and “final ” be mutually exclusive?

How did we get to such a conglomeration of programs?  Wouldn’t it make to sense to have one grant, one loan, and one work program?  Absolutely, but it would ignore political reality, which can both help and hinder aid administration:

• On the good side, the Pell Grant program was “enhanced” by the addition of the Academic Competitiveness Grant (ACG) and SMART Grant, which provide additional money to high-achieving Pell students. Unfortunately, the regulations are so complex that schools are not able to make eligibility determinations until summer or fall, which is far too late to affect enrollment decisions.  Moreover, the GAP requirement is needed to be achieved each semester, so you could have funding for the fall, but lose it for the spring.
• On the not so positive, other federal regulations serve purposes totally unrelated to determining your financial need.  When you file your FAFSA, your application is run through a gauntlet of the Social Security, Homeland Security, and Selective Service agencies.  This may seem harmless enough, but it may trip you up if you have conflicting information on file.  As a result, you may lose your chance at an aid decision due to data matching problems.

See you next time.