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Need for State-Funded Financial Aid Slows

In its latest survey, the National Association of State Student Grant and Aid Programs (“NASSGAP”) revealed that growth in the use of state-funded student financial aid slowed in 2015-16. The total state-funded aid amount that year – $12.5 billion – is an increase of less than one percent from the previous year. The percentage is a big drop from what the NASSGAP measured from 2013-14 to 2014-15, when the year-over-year growth for state aid was around six percent. A stronger economy and demographic declines in various high-population states are being attributed to the small increase in aid. Learn more about the NASSGAP’s survey on the Inside Higher Ed website.

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The Election’s Impact on Higher Education

Now that the 2016 presidential election is over, many higher education experts are wondering how a new administration and Congress will affect colleges and universities. Liz Clark, the director of federal affairs at the National Association of College and University Business Officers (“NACUBO”), recently shared her thoughts on what legislation could be enacted. Some of Clark’s insights discussed who the next Secretary of Education could be, how NACUBO is preparing for proposed higher education changes, and whether there will be changes to student financial aid. More on Clark’s election observations is available on the NACUBO website.

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State-Funded Student Aid on the Rise

State funding for student financial aid jumped six percent during the 2014-15 academic year, per the National Association of State Student Grant and Aid Programs’ (“NASSGAP”) latest survey. This year’s survey revealed that $12.4 billion in student aid was awarded by states in 2014-15. Other reported increases include rises in grant aid (up 5.7 percent; $10.5 billion) and non-grant aid (up seven percent; $1.9 billion). However, the breakdown between non-need-based (24 percent) and need-based (76 percent) grants remains the same from last year. A full recap of the NASSGAP survey is available on Inside Higher Ed.

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PLUS Loans in Financial Aid Packages

College admission counselors have raised concerns that some institutions are combining Federal PLUS Loans with other financial aid in students’ award packages. At last month’s National Association for College Admission Counseling (“NACAC”) meeting, financial aid professionals argued that including PLUS loans with award packages could make a family’s overall cost appear smaller. It may also mislead students into thinking they’re eligible for the loans, which are not guaranteed. A motion to exclude PLUS loans from an institution’s original financial aid letter was accepted last week, and will be presented to the NACAC’s Board of Directors in November. More on Federal PLUS Loans is available on Inside Higher Ed.

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Student Aid Enforcement Unit Introduced

Officials from the Department of Education have announced the establishment of a new office focused on investigating misconduct at higher institutions. The Student Aid Enforcement Unit will be responsible for imposing administrative actions against colleges and universities, and resolving debt relief claims to defrauded student loan borrowers. Robert Kaye will oversee the Student Aid Enforcement Unit, which will consist of 50 department employees. To help fund the enforcement efforts, the Obama Administration has requested $13.7 million from Congress. For more on the Student Aid Enforcement Unit , check out the Inside Higher Ed Web site.

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Study Ties Tuition Costs to Financial Aid Availability

A working paper by the National Bureau of Economic Research has tied high college tuition costs to the availability of student aid. According to the study, increased assistance and the introduction of an unsubsidized loan program are driving tuition prices higher since colleges know financial aid will make up the difference. The idea, however, is questioned by a College of William & Mary professor who believes tuition costs are tied to the wealthiest students’ ability to pay. For more on the high cost of tuition , visit the Inside Higher Ed Web site.

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