Assessing Undergraduate Financial Aid Distribution Patterns: The Case of

the University of Missouri

LaShonda Carter-BooneUniversity of Missouri System

Mardy EimersUniversity of Missouri System

University of Missouri-Columbia

MidAIR Fall 2006 Conference

Kansas City, MissouriNovember 9, 2006

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Overview

I. National crisis of access and affordability

II. The Spellings Report

III. UM-System Undergraduate Financial Aid

Summary Report, FY2001-FY2005

IV. Conclusions

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I. National Crisis of Access and Affordability

College costs continue to climb.

Decrease in state funding for public institutions.

Responsibility for financing college costs increasingly shifting to students and their families.

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I. National Crisis of Access and Affordability (Continued)

Increasing number of middle-class families can’t afford to send their kids off to college.

This crisis has exacerbated the traditional problem of access and affordability for first-generation/low-income/minority students.

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II. The Spellings Report

Regarding access---three factors:

Inadequate preparation for college-level work.

Lack of information about college opportunities.

Persistent financial barriers.

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II. The Spellings Report

Regarding these financial barriers:

Current financial aid system does not direct financial aid to students who truly need it.

Need-based financial aid is not keeping pace with rising tuition.

Unmet financial need is a growing problem for students from low-income families who need aid the most.

Over half of today’s undergraduates take out loans to finance part of their college work.

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III. UM System Undergraduate Financial Aid Summary Report

Primarily focuses on three major questions:

1.How many Missouri resident undergraduates receive financial aid and what kind of aid do they receive?

2.Has grant aid kept pace with the increases in educational and required fees?

3.To what extent are Missouri resident

undergraduate students’ financial needs met?

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FY 2001 FY 2005

Change from

FY 2001

Number Of Undergraduates Who Received

Aid

30,441 36,112 +19%

% Of Undergraduates Who Received

Aid

71% 77% +6%

Total Amount Of Financial Aid

Awarded$221.7M $327M +48%

How many undergraduates receive financial aid?

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Change fromSource FY01

Federal $123.9M 56% $193.8M 59% 56%State 14.9M 7% 13.2M 4% -11%Institutional 67.7M 31% 85.4M 26% 26%Private 15.3M 6% 34.6M 11% 126%

TOTAL $221.8M 100% $327.0M 100% 48%

Source: DHE14-1IR&P/LCB 7/06

FY01 FY05

Total Undergraduate Financial Aid by Source at the University of Missouri System, FY01 & FY05

What are the major sources of financial aid?

e

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Change fromType FY01

Grants $102.1M 46% $123.8M 38% 21%Loans 104.8M 47% 186.5M 57% 78%Employment 14.7M 7% 16.8M 5% 14%

TOTAL $221.6M 100% $327.1M 100% 48%

FY01 FY05

Total Undergraduate Financial Aid by Type at the University of Missouri System, FY01 & FY05

Source: DHE 14-1

IR&P/LCB 7/06

What are the major types of financial aid?

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Has grant aid kept pace with increases in educational and required fees?

Educational and Required Fees vs. 9-Month Cost of Attendance and Grant Aid for Full-time Undergraduate Missouri Residents at the University of

Missouri System, FY01 - FY05

$0

$2,500

$5,000

$7,500

$10,000

$12,500

$15,000

$17,500

$20,000

$22,500

FY01 FY02 FY03 FY04 FY05

Budgeted Cost of Attendance Educational & Required Fees Average Grant Aid

+36.1%

+53.6%

+20.5%

$13,043

$17,750

$4,806

$7,380

$3,181$3,833

12Source: UIDSIR&P/LCB 7/06

Financial Aid Status for Full-time Undergraduate Missouri Residents, FY 2001 & FY 2005

0

5,000

10,000

15,000

20,000

25,000

30,000

FY 2001 FY 2005

Full pay / No aid

Aid recipients withno need

Aid recipients withneedS

tud

ents

How many Missouri resident undergraduates receive aid and do they have need?

5,947

7,560

11,291

5,366

8,350

14,736

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Number of Students that Received Merit Aid by Financial Need, FY01 vs. FY05

0

1000

2000

3000

4000

5000

FY01 FY05

Stu

den

ts

Merit aid recipientswith need

Merit aid recipientswithout need

How is merit aid distributed at the University of Missouri?

3,610

4,2844,452

3,920

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Total Merit Aid Awarded to Undergraduates by Financial Need, FY01 vs. FY05

$0

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

$14,000,000

FY01 FY05

Mer

it A

id D

oll

ars

Merit aid recipientswith need

Merit aid recipientswithout need

How is merit aid distributed at the University of Missouri?

9.2M

11.4M

11.6M

10.2M

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The remainder of this presentation focuses exclusively on full-time, degree-seeking, Missouri resident undergraduates that were enrolled for 9-months during the academic year and had a financial need.

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$15,000 Budgeted Cost of Attendance includes educational & required fees, books, and living expenses

(5,000) Less: Expected Family Contribution

10,000 Financial Need

(3,500) Less: Grant Aid

6,500 Remaining Need

(1,000) Less: College Work Study

(4,000) Less: Need-Based Loans

(500) Less: Alternative Loans

$1,000 Unmet Need

includes need and non-need based grant aid from federal, state, institutional, and other sources

*This formula is only used for those students for which a completed Free Application for Federal Student Financial Aid (FAFSA) form was received by the financial aid office.

An Example: How financial aid is determined and distributed.

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Who gets need-based financial aid by income level?

Change fromIncome Level FY 2001 FY 2005 FY 2001

Less than $20,000 2,270 2,560 12.8%$20,000 - $40,000 2,065 2,246 8.8%$40,000 - $60,000 1,908 2,196 15.1%$60,000 - $80,000 1,508 1,930 28.0%$80,000 - $100,000 537 1,113 107.3%Greater than $100,000 177 682 285.3%

Source: UIDS

IR&P/LCB 7/06

Number of Full-time 9-Month Undergraduate Missouri Residents at the University of Missouri System who had a Financial Need, FY 2001 & FY 2005

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Distribution of Grant Aid, Non-Grant Aid, and Unmet Need by Income Level at the University of Missouri System, FY05

$0

$2,500

$5,000

$7,500

$10,000

$12,500

$15,000

$17,500

$20,000

<$20K $20K to$40K

$40K to$60K

$60K to$80K

$80K to$100K

>$100K

Income Level

Fin

anci

al N

eed unmet need

non-grant aid

grant aid

How are students’ financial needs met by income level?

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How are students’ financial needs met by income-level?

Distribution of Grant Aid, Non-Grant Aid, and Unmet Need for Middle-to-Low-Income Students at the University of Missouri

System, FY01 vs. FY05

$0

$2,500

$5,000

$7,500

$10,000

$12,500

$15,000

$17,500

$20,000

FY01 FY05 FY01 FY05 FY01 FY05

<$20K $20K to $40K $40K to $60K

Income Level

Fin

anci

al N

eed unmet need

non-grant aid

grant aid

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Income Level

Less than $20,000$20,000 - $40,000 $40,000 - $60,000 $60,000 - $80,000 $80,000 - $100,000 Greater than $100,000

Source: UIDS

IR&P/LCB 7/06

Percent of Full-time 9-Month Undergraduate Missouri Residents who Qualified for Need-Based Aid and had their Full Financial Need Met, FY 2005

To what extent are students’ financial needs met by income level?

FY 2005

9%14%22%39%49%

56%

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Summary of University of Missouri Financial Aid Trends Given National Access and Affordability Crisis

Yes No

Has tuition gone up significantly?

Has state funding decreased?

Have tuition increases outpaced increases in gift aid?

Are students taking out more loans to finance college?

Is unmet financial need increasing for low-income students?

Have the number of low-income students at the University decreased?

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References

University of Missouri System Undergraduate Financial Aid Summary Report, FY2001-FY2005:

http://www.umsystem.edu/ums/departments/fa/planning/financialaid/management/rev_report_2006_residents.pdf

Final Draft Report of the Commission on the Future of Higher Education:

http://www.ed.gov/about/bdscomm/list/hiedfuture/reports.html