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Aid Year 2012-2013 Update AAN September 20, 2012

Aid Year 2012-2013 Update AAN September 20, 2012. National trends in Higher Education. Public flagship campuses are becoming academically more competitive, and there is criticism of this (elitism). R1 publics have placed renewed emphasis on the importance of undergraduate education.

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Aid Year 2012-2013 Update AAN September 20, 2012

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  1. Aid Year 2012-2013 Update AAN September 20, 2012

  2. National trends in Higher Education Public flagship campuses are becoming academically more competitive, and there is criticism of this (elitism). R1 publics have placed renewed emphasis on the importance of undergraduate education. Public support for higher education has been eroding, fast (MN state support drop from 703 to ~ 525 million) The cost of a college degree has risen quickly. This has necessitated a commensurate growth in financial aid and private giving. There is a national-level scrutiny on the need to improve retention/graduation rates.

  3. Tuition Considerations Why tuition increases? • Competition for the very best faculty/staff • Cost of technology and infrastructure • Modern classrooms (STSS) • Decreasing of state support

  4. Financial Aid Considerations Focus on student success recruitment retention timely graduation financial literacy controlling debt Institutional and policy considerations, to support student success need-based aid merit-based aid middle-income scholarships linking aid strategies to enrollment management linking tuition strategies and aid strategies Financial Aid Principles

  5. 5-Year TRENDS: Twin Cities Undergraduate Student Aid

  6. University of Minnesota TC UndergraduatesHousehold Income Ranges

  7. TRENDS:Twin Cities Undergraduate Student Aid

  8. TRENDS:Twin Cities Undergraduate Student Aid

  9. TRENDS:Twin Cities Undergraduate Student Aid

  10. TRENDS:Twin Cities Undergraduate Student Aid

  11. TRENDS:Twin Cities Undergraduate Student Aid

  12. TRENDS:Twin Cities Undergraduate Student Aid

  13. Student Employment • In 2011-11, undergraduates across all five campuses earned over $30.7 million in University employment. • On the Twin Cities campus, over 12,000 undergraduates earned over $24.7 million that year.

  14. Freshman Academic Scholarships U of M-Twin Cities Principles for Central Freshman Scholarship Awards: • Attract high-achieving new freshmen students to the U of M and support their retention and timely graduation. • As a land-grant institution, we award the majority of freshman academic scholarships to Minnesota residents. • Scholarship awards are leveraged to enhance the diversity of the freshman class, broadly defined to include geographic, ethnic, socioeconomic, special talents, and leadership. • Central scholarship funding is leveraged by packaging students with central, college, and privately-funded scholarships.

  15. TC Loans: Then and now FY 2000 FY 2010 Undergraduate Loan Volume $79,929,744 $177,049,505 Percent of undergraduate students borrowing 43% 54% Average undergraduate amount borrowed $6,389 $10,004 Student Loan Indebtedness for 2009-10 Baccalaureate Graduates without PLUS % of Grads Average Twin Cities 66% $27,089 10

  16. Estimated Minimum Salary Required for Loan Payment Assumes 10-year repayment cycle, 6.8 % interest rate on loan, and 8% maximum of income for loan repayment.

  17. Undergraduate Student Aid:The current picture

  18. 2012-2013 Cost of AttendanceTwin Cities CampusMinnesota Resident Undergraduate Living on Campus Tuition & Fees: $13,524 Books & Supplies: 1,000 Room & Board: 8,000 Transportation: 194 Personal/Misc: 2,000 Total Cost of Attendance: $24,872

  19. Typical Aid Packages at Various Income Levels, MN Resident Undergraduate, 2011-12

  20. Mean Cost of Attendance in FY 2011 was $22,666 Fall 2010 TC Full-Time MN Resident Enrollment = 20,180 (69% of FT Undergraduates)

  21. Affordability • Strong need-based aid programs (U of M Promise) • Financial Literacy Programs • Controlling tuition increases • Improving graduation rates

  22. Financial Aid Strategies • The University’s financial aid strategies will be linked to University and state goals and priorities. These strategies will be evaluated regularly, and adjusted as necessary, to improve effectiveness of spending as it relates to institutional and state goals. • Financial aid packages will be tailored to each student’s circumstances and may include a variety of forms of need-based and/or merit-based aid from numerous sources including, but not limited to, University funds, federal and state aid programs, external scholarships and donor-directed funds

  23. Financial Aid Strategies • As a public institution, the University supports access for qualified students, and its review of applicants for undergraduate admissions is need-blind. A student’s ability to pay is not a factor in determining admissibility.

  24. Four-Year Graduation Rates, Twin Cities Campus

  25. SERU Survey Results How frequently have you engaged in the following behaviors in the past year? Cut down on personal / recreational spending 4% never 6% rarely 23% occasionally 23% somewhat often 25% often 20% very often

  26. SERU Survey Results How frequently have you engaged in the following behaviors in the past year? Worried about my personal debt 14% never 14% rarely 16% occasionally 16% somewhat often 18% often 23% very often

  27. Were the benefits you received from attending the University of Minnesota worth the financial costs to you and your family?

  28. The importance of graduating in four years

  29. Graduating in More than Four Years:Impact on Student Debt For the Twin Cities fall 2002 cohort: • 58.3% of the students who graduated in four years borrowed, with an average student loan indebtedness of $21,674. • 67.4% of the students who graduated in five years borrowed, with an average student loan indebtedness of $23,220. • 70.6% of the students who graduated in six years borrowed, with an average student loan indebtedness of $24,625.

  30. Fiscal Literacy • Information on the student One Stop website • “Live Like A Student Now So You Don’t Have to Later” messaging • Financial Literacy workshop on the student portal in October • Welcome Week workshop in fiscal planning • All students are given a state-required financial literacy pamphlet at Orientation • Mind Your Money Questions

  31. “Live Like A Student Now…”Fiscal Literacy Campaign

  32. Final Points • The University’s financial aid strategy (need and merit-based) cannot be separated from tuition discussions. • Continue U of M Promise for low-income and middle income • Increase private giving for scholarships • Target resources to recruit and retain high-ability students • Continue emphasis on financial literacy • Adequate financial aid is essential to ensure that students who enroll at the University of Minnesota can graduate in four years. • Continued student support in all forms is essential (e.g., improved advising) • One of the best ways for students to manage the costs of their education is to graduate in four years.

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