Monday, November 16, 2009

FAQ: Trying To Generate Funds and Distribute Financial Aid In A Time of Crisis

By Ashley Lee

Located on the ground level floor of Aldrich Hall, the Financial Aid and Scholarship office is dimly lit and surprisingly very quiet. It is about 2:00 in the afternoon on a Tuesday and the Financial Aid office is pretty much empty with the exception of two students who are talking to the financial aid staff in a cubicle. Overhearing both students, one is trying to appeal for financial aid as her father had lost his job and now needs assistance with her schooling, while and the other student is trying to take out a student loan for this year.

The Financial Aid and Scholarships office is the core resource where students have the opportunity to find scholarships at the resource center, and receive guidance for their financial needs throughout the school year. With the recent budget cuts, and fee hikes, funds for financial aid is a concern among students as grants and loans are not as substantial as they use to be. (For more information about the general requirements for financial aid in the 2009-2010 academic year go to

Chris Schultz, the Acting Director of Financial Aid and Scholarship, and Chau Luu, the Assistant Director of Scholarships, answer questions of how they are dealing with distributing financial aid and scholarships to students this year due to the cuts, clarifying points of confusion that happened to financial aid this year and explaining what they anticipate for the future of increasing financial aid.

Daryl Serrano, the Coordinator for the Higher Education Campaign at California Student Public Interest Research Group (Calpirg) on campus, answers how students are getting involved in terms of expanding financial aid especially Pell Grants and making it become more accessible to all students.

1.What is changing in the qualifications process as a result of the budget?

Shultz : When any student fills out the FAFSA form or the financial aid application, the federal government performs a calculation on all the income that is presented. They tell us based on this student’s profile that their family should be able to contribute x amount of dollars toward the student’s education for the following year. So then what we do is a pretty straightforward subtraction where you take the cost of where the student is going to be living (on campus or off campus) and we set budgets on an annual basis. So you take the budget minus the parent’s contribution and if there is a positive number then they need financial need. We also look at certain funds like our work-study program and some of our loans that we advantage or stir toward the neediest students. The reason why we do that is we really try not to offer parent loans to needy students because they typically come from very low economic strata and their parents will never be able to take out the loans. Therefore, we try not to offer parent loans to those students so we will prioritize our funds towards them.

Luu: In terms of scholarships, as we reach into the 2010-2011 year, they will become more selective as funds will not be available as they have been in the past. The fact that one applies for a scholarship a year in advance, it is a competitive process and it depends on the funds we have at the end of the year to determine what we can offer.

For freshmen and transfer students they can apply to the Regents Scholarship, which is our most prestigious as it is a four-year aid award scholarship for freshmen and a two year aid award scholarship for transfers. This year only 16 freshmen and 50 transfers accepted this scholarship. Last year, 111 freshmen and 29 transfers accepted this award. By looking at these statistics, there is a huge decrease in the acceptance rate for freshmen in the 2009-2010 year due to budget cuts, as UCI scholarships had a limited number of offers. The budget plays a role into determining how many regent scholarships financial aid can offer, as we have to sustain the funds for current students who have received this award in the past. We cannot offer more regent scholarships as this could cause a high yield for us as the budget climate varies and we would therefore be unable to cover all the students with this award. One of these reasons why there was an increase in acceptance of scholarships for transfer students is that financial aid increased the number of offers.

Chau Luu could not state how many scholarships they offered, as this information is not released to the public.

2. How does a student who is borderline get evaluated differently since budget cuts?

Shultz : Everybody qualifies for aid except foreign international students. For domestic students it depends on whether you qualify for grants or loans. That is kind if a misunderstanding as they think they do not qualify for aid but typically these loans are subsidized by the federal government meaning that they will buy down the interest rates and are much cheaper and have more benefits than if you went through private loan.. These subsidized loans are not activated until after graduation. So these students actually qualifying for a benefit when applying for some of these loan programs. That said when we do the calculations we really do not have a lot of leeway for federal regulations for somebody who is borderline/needy. Say you need of 200 dollars there is really much we can offer. The minimal loan amount for the need base loan is 300 and again we can offer the student other loans that are subsided and have great benefits but one will not will qualify for grant support along those lines.

3. With the budget cuts this year, how did it affect notifying students of their aid award?

Shultz: In general, we go through a modeling process for entering students or new applicants and try and come up with a financial aid package that is going to spend our grants funds and the available money we have, but not overspend it. Now this year was an exception. First, we were not sure about the fees for this year so we were waiting on what the final fees would be as the fees impact student aid awards. We were also waiting on whether the Cal grants were going to be funded. Without the Cal grants it would have had a huge impact on students even though it was only going to remove Cal grants for new students. What this would of done is that we would have to review all the grant funds and the funding that would of gone to continuing students and everyone would get an overall lesser grant amount. So we really did not have enough information to get awards out sooner that we wanted to.

4. With the budget cuts, I am sure that you do get a lot of appeals for financial aid. How have you addressed these issues?

Shultz: These would be considered special circumstance cases where the student has to fill out a form and document what has happened to them. We have been getting more requests to review these cases. It could be anywhere from the death of a parent, parent losing their job, or a spouse returning to school. We would ask for example if there was a change in income for example, we ask them to give us their best estimate of what their income is going to look like for the rest of the year and we send the information to the federal government and ask them to do another calculation to see how their eligibility changes. Hopefully they will qualify for more grant support.

In fact we have spent over double the amount on grants for these types of cases that we already spent last year. There is quite a few who qualified for grant support. In dollars it is close to $490,000 and 104 students who received grant support. The grant money goes toward the full year and some may not qualify for additional grant support but maybe a subsided loan when they were only getting unsubsidized loans.

5. Is there a shrinking pool of financial aid due to budget cuts?

Shultz: At the university level we have something that is quite unique in the nation is this return to aid policy or a set aside where about a 1/3 of all the fees paid comes back to the campus for university grant support. So for this coming year it is over 42 million in grant support just at the University level. What the UC system has is a policy on how to administer funds and it is called the educational financing model or it is abbreviated as EFM. What this policy says is that you look at individual students that apply to your campus and then you figure an amount of loan or work that students should have to incur on average and after you subtract that out and their parent’s contribution then the remainder is grant support.

For Pell Grants and Cal Grants because of the nature of the program, it is not really something that everyone can get. You qualify or you don’t. What we have seen at UCI is that the over the past 10 years or so is that we have seen like a decline in the number of our students that are qualifying for Pell grant. This is attributed to the fact that as UCI becomes more selective we are starting to pull more students from the middle and higher income brackets, which would mean a smaller percentage of our students, are Pell Grant recipients.

Last year there was a lot of controversy about the Cal Grant Program as one of the Governor’s proposals was to bridge the gap in the budget was to eliminate the Cal grants for the new students. So continuing students would keep their grant, but new students would not be offered the Cal Grant. In the end the governor and the legislator agreed to fund the program this year so there were no Cal grants cut.

* In determining what the increase in aid was and by how much cannot be determined, as financial aid does not do analysis until the year is over as aid is continually being awarded.

6. How will Yudof’s Project You Can (raising 1 billion dollars in student support across all 10 campuses) affect financial aid? Do you think this project is effective?

In asking about the Future of Financial Aid, Mark Yudof on October 16, 2009 released a statement regarding an update on student fees for the 2009-2010 year informing the students that Financial Aid will not be cut and increases in “UC grants, Cal grants, federal Pell grants and federal tax credits for this year are expected to cover for three quarters of all undergraduate with households under $180,000.” He even stated “middle class students aid who are not eligible for UC or Cal Grants will receive a grant that covers half of any fee amount if their parents income is below $100,000. “ On October 23, 2009 Mark Yudof proposed Project You Can, which will raise 1 billion dollars in student support across all 10 campuses. Yudof also plans to raise the Blue and Gold opportunity program so that families earning $70,000 or below will receive gift all that covers all system wide fees for about 45 percent of UC undergraduates. (For more information on Yudof’s futute for financial aid go to : .)

Shultz sees Yudof’s Project You Can to be a long-term project because when there is any sort of fundraising effort it would take awhile for the money to materialize. “Until we have a clearer picture as to how the sources of the funds it is hard to tell what the intermediate impact will be. To build our endowment is key because it will give us a more stable funding source for grants and scholarships especially. Because right now we have such a low endowment and relatively speaking we are not able to robustly fund programs. It is great that there is this effort to finally build these funds because if you do not start you will never get there. However, people need to understand that it is not going to be instant gratification where that money will be here and all of sudden we will have 5 million dollars initially to spend for students for it is going to materialize over many years. In short term, it will not be as effective as it will not generate any funds and long term it is a great opportunity to generate funds for the campus that we have been wanting and needing for our students.”

Luu said that “long-term purposes of this project “as a great vision in terms creating of goals for the UC’s. However, in for the short-term purposes, it is hard to say that Project You Can is feasible. I feel that this project needs to gain more support and am a little skeptical if the UC can meet their targets. I am curious to see where the funds go and I hope that scholarships can get something out of it, as it would be great to know that we can give something back to the students.”

Calpirg does not have an opinion on this project. However Daryl himself thought that it would be helpful if financial aid increases just as long as there is a limit on who receives financial aid. He said that financial aid should only be given to those who really need it. If passed he finds this project effective, but given the economy and debt that California has, he does not see the project as being feasible.

In terms of student support for creating awareness of making higher education more affordable for students one of Calpirg’s campaign is to collect stories from students at UCI and at Irvine Community College about their ordeals with the lack of funding. Through these stories, they want to raise that students need more grant money and their goal is to raise 40 billion in Pell Grants. Last year, Calprig was successful in temporarily doubling Pell Grants for students until 2012. ( )

To read stories how other students are dealing with paying for their education go to

To help support the cause of funding education visit:


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