We humans have a common trait among us. We do not like to be wrong, or even to be perceived as being wrong. Students in school—whether in elementary school or at postsecondary levels—frequently do not want to answer questions in class due to a fear of answering incorrectly, not getting it right, and being perceived as the class dunce. Likewise, in our professions we also have that fear of not “getting it right,” not knowing the right information, or making mistakes. So, in wisdom we seek guidance on how we should do things. In fact, a term has been developed over the years that indicate a professional’s desire to know the answer on pertinent topics and to ensure that he or she is performing at expected standards. The descriptor that has developed is “best practices.” In the realm of financial aid we also hear of best practices. The National Association of Student Financial Aid Administrators (NASFAA) at one time conducted annual symposiums called, “In Search of Best Practices.” Perhaps the title of that symposium series, “In Search of…,” gives indication of the challenge to come up with what are universally considered best practices. But, that ongoing challenge to find the best practices does not thwart our desire and search for them.
The Importance of Best Practices
Why is it important to consider best practices in student financial aid administration? When we consider that more than $150 billion is disbursed to more than 15 million students each year1, it behooves us as financial aid administrators and taxpayers to get it right. Then, when you consider the implications for your own institution if you are doing things wrong, you quickly understand the necessity of getting it right. Just think about it a moment and let it sink in. Not getting it right can lead to fines, limitation on your participation in the Title IV programs, or even suspension of your institutional eligibility. Not too many institutions—of any size—could afford to lose their Title IV eligibility in today’s world of postsecondary education. We have seen recent news accounts of the impact of restricted or eliminated access to Title IV Federal Student Aid program participation at a couple of larger institutions, not to mention the smaller schools that have been impacted that do not make the major headlines.
As a person looks at what all is involved in financial aid administration, it is easy to see there are numerous possibilities where things can go wrong. This is because there are many different areas of responsibility that fall within the scope of student financial aid administration. A brief sampling of these topics includes application processing, awarding/packaging aid, disbursing aid, and required reporting.
Whether it is an error in determining a student’s eligibility, a processing mistake, improper disbursements, or untimely or inaccurate reporting, the potential is there for “issues” in the overall picture of financial aid administration. It is critical that all effort be given to getting it right.
Three Components to Getting it Right
Last year, out of curiosity about what seasoned financial aid administrators consider the key best practices in financial aid administration, this writer inquired of several administrators who have been in the financial aid industry for many years. The query was done informally and consisted of professionals at different size schools from all across the country. While the research was definitely not a scientific poll, their comments provided insights based upon decades of experience. Their consolidated comments, combined with this writer’s experience, provide the basis for a synthesized perspective on financial aid best practices. Over the next several weeks we will address each of three key factors that are fundamental to getting it right in the administration of the Title IV programs. While on the surface, these three factors may seem to be self-evident and not worth a review, experience and observation would indicate otherwise. Failing to get it right in these three areas has the potential for significant impact on a school’s ability to operate the Federal Student Aid programs in compliance with applicable regulations and legislation.
It is said that for a business to succeed it is all about “location, location, location.” Similarly, to ensure you have best practices in financial aid administration it is about having it all “right, right, and right.” The three components are ensuring you have the “right people,” the “right service,” and the “right exposure.” Each of these components interacts and overlaps. When you achieve the right combination of these three aspects of your financial aid administration, you are in a golden spot. (Perhaps, for the golfers who are reading, we could call it finding the “sweet spot”.)
Some may say that boiling down the basics of best practices in financial aid administration to three components may be over-simplifying. But, the reality is that if these three aspects are taken care of, the other details of being successful in financial aid administration will likely fall in place. When one stops to think about it, often times the issues that develop in the financial aid office are when people do things wrong. Closely linked to that concern is when you do not provide the appropriate service to one of the many publics you have responsibility toward. If each of the publics with which you interact is not appropriately serviced, it will impact your exposure. So, finally, if your financial aid office does not have the “right” exposure, that fact can most definitely impact the institution as a whole.
Next week we will look more in depth at what it means to have the right people. While saying this, keep in mind that it does not have to be only the owner, president, supervisor, or boss that needs to address this issue. Each and every employee involved with financial aid should be considering how he or she may become more fully the “right” person, and what that means. Until then, you are encouraged to be thinking about what it means to “get it right” overall in regard to financial aid administration at your school. We look forward to exploring that concept in the next few issues of the FAME Regulatory Bulletin.
1 Federal Student Aid’s Web site at https://studentaid.ed.gov/about on September 12, 2014.
This article is presented for informational and educational purposes only and should not be considered to be giving legal advice.