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How To Keep Scholarship Providers in the Game—and Off the Sidelines
How can scholarship providers hand out need-based awards to college students if they can’t objectively confirm the need? In 2017, the Department of Education issued guidance that makes information sharing between institutions and scholarship providers impossible. Why this is a bad idea—and suggestions for dealing with “scholarship gridlock” in the interim—follow.
In January of 2017, we reviewed new guidance from the Privacy Technical Assistance Center (PTAC) on the subject of data sharing between financial aid offices and external scholarship organizations, we were quite concerned. As college costs increase, the number of students who count on scholarships increases, too. With more than two-thirds of all college students borrowing money for school today, we believe the use of external, vetted scholarships is one of the best ways to reduce student debt and keep students in class.
A Disservice to Students, Schools, and Well-Meaning Scholarship Providers
The 2017 PTAC guidance states that financial aid offices are no longer allowed to share FAFSA/ISIR information with external scholarship organizations. Such data can only be used for application, award, or administration of aid awarded under Federal Student Aid programs, state aid programs, or aid awarded by eligible institutions. This guidance also impacts sharing data with tribal organizations that are trying to manage and award their scholarship and grant funds. Institutions are prohibited from sharing student information even if the student has signed a FERPA waiver requesting that a school release data on their behalf.
Such interpretation is having an impact that goes far beyond the intention of the PTAC, because the ability for external scholarship and grant organizations to allocate and disburse funds to students has now come to a standstill. As it is, the Institute for Higher Education Policy estimates that approximately $100 million in private scholarships goes unclaimed each year. It’s likely that this PTAC guidance is already leaving even more money on the table, because many scholarship providers awards are based on financial needs—which can’t be objectively determined without seeing FAFSA data.
It is for this reason that we, along with many others in the student financial services community, endorsed the National Scholarship Providers Association Letter to the U.S. Department of Education. We are certain there is a way to designate scholarship providers as trusted entities that are eligible to receive FAFSA data—and manage it responsibly—per existing statute.
Creative Solutions for Ending Scholarship Gridlock
In the meantime, we encourage schools to consider these ideas for sharing student information in a way that may alleviate the current scholarship gridlock:
- Generate a form that a student can fill in with all information necessary for a scholarship organization to award and disburse funds. On the form, include a section where a financial aid officer can certify the accuracy of the student-reported information. Because the student is supplying the information, and the school official is merely certifying the accuracy of the information, the school is not releasing any confidential information to a third party.
- Create a financial aid summary for students that can be generated upon request and delivered to the student. It should contain all relevant information students might need as part of their college funding journey. This summary could be delivered as a secured, sealed document that can’t be adjusted by the student. Make it available upon request by the student—or automatically delivered to all aid applicants. Doing so would enable students to understand their financial aid package and explore alternative funding options.
A proven leader in higher education, Amy Glynn spent more than a decade in financial aid, ensuring products and services were in compliance with Federal Title IV regulations while meeting the highest service levels possible. Today she is the Vice President of Financial Aid & Community Initiatives at CampusLogic. She earned her Master of Science in Higher Education from Walden University
Information about Money Smart College Week® as a conference follow-up. See the link below.
Good Morning GASFAA!
Good news out of the Senate Appropriations Committee meeting yesterday. They passed the Labor, Health and Human Services, and Education FY 2017 spending bill which includes:
• Year-round Pell approved without the acceleration clause and other administrative burdens.
• Level-funding for FSEOG and Federal Work-Study
• Projecting a maximum Pell Grant award for 17-18 of $5,935
• Cuts to the $7.8 billion Pell Grant surplus by non-education programs have begun
Read more of the details and from Justin Draeger in today’s NASFAA News. If your institution is not a member please email me and I’ll be glad to send it to you.
You can also access the spending bill highlights HERE. Mark up of the Appropriations Act FY2017 continues by subcommittees next week. I’ll try to keep you posted!
Have a great day!
Associate Director of Financial Aid
Savannah College of Art and Design
2015-2016 GASFAA Legislative Chair
Please see the May issue from GASFAA’s Diversity Committee. I am late posting due to GASFAA Conference happening so near the end of May and beginning of June.
Jody Darby, Communications/Technology Chair