of these vital programs.

Experience has shown us that constant change and

modification only tends to confuse and frustrate students, parents, legislators,

counselors, and institutional personnel.

Further, we know that the

existing balance of grant, work and loan programs are meeting the needs While some modification is needed in the various programs,

of students.

we do not feel that radical modification is necessary at this time. Data
on the programs will show that the fundamental purposes are being achieved.
A good example of this was revealed last month when we reviewed the current
Basic Grant statistics and compared them with the same figures of a year
ago, prior to the passage of the Middle Income Student Assistance Act

(MISAA).

Overall, applications are already up by 400,000 compared to last year. However, the number of eligible students has increased by 900,000 students. Such data clearly illustrate that the purposes and legislative intent contained in MISAA is working.

Likewise, the campus rates of utilization

in the College Work-Study and SEOG program show that the MISAA expansion is truly reaching the people it was designed to assist.

There are several other modifications, however, which we support in

order to ahcieve this first goal. These include:

1.

2.

Provide annual step increases in the Basic Grant maximum award
to help parents and students keep pace with rising costs and the
effects of inflation. (Note: If such an approach is not adopted,
a substantial number of students will become ineligible from
year to year due to increases in their family incomes.)

Increase the threshold levels for the three campus-based programs
(SEOG, NDSL, and CWS) and establish a level for the SSIG program
which will insure that students will continue to have a proper
balance between grant and self-help funds in their aid packages.
As you know, the threshold levels were initially established in
1972. The decision by the Congress to enact this section has
proven to be a very wise decision in spite of attempts by
various Administrations to eliminate or ignore these provisions.
If institutions are to be able to provide equitable aid packages
to needy students, the continuance of threshold levels is essential.

TESTIMONY OF DALLAS MARTIN, EXECUTIVE DIRECTOR, NATIONAL ASSOCIATION OF STUDENT FINANCIAL AID ADMINISTRATORS

Mr. Chairman and Distinguished Members of the Subcommittee:

I am Dallas Martin, Executive Director of the National Association of Student Financial Aid Administrators, a non-profit association which represents over 1600 institutions of postsecondary education. It is indeed a pleasure to have the opportunity to appear before you today to discuss the Title IV student assistance programs and to present you with our thoughts on how these programs should be modified as you embark upon the difficult task of reauthorizing this important legislation.

During the past six months, our Association has carefully reviewed the existing legislation which governs these programs, and has compared this legislation with the actual operational and administrative practices which are involved at the campus, state, and regulatory levels. We have also reviewed actual cases in order to see how effectively individual students and parents are being served by the existing system. From this analysis, we have developed several legislative recommendations, which we sincerely hope will be incorporated into your final bill.

Most of our recommendations are designed to meet three specific

goals, which we believe are essential in order to insure that the programs

continue to serve the needs of our citizens.

The first goal is to provide a reasonable and continuing financial base for the existing grant and self-help programs to assure current and future students that their goals of obtaining a postsecondary education will not be thwarted due to insufficient financial resources.

To achieve this first goal, we recommend that all of the existing programs be extended through June 30, 1986. This will provide

program

stability and gives students an assurance that there will be a continuation

of these vital programs.

Experience has shown us that constant change and

modification only tends to confuse and frustrate students, parents, legislators,

counselors, and institutional personnel.

Further, we know that the

existing balance of grant, work and loan programs are meeting the needs
of students. While some modification is needed in the various programs,
we do not feel that radical modification is necessary at this time. Data
on the programs will show that the fundamental purposes are being achieved.
A good example of this was revealed last month when we reviewed the current
Basic Grant statistics and compared them with the same figures of a year
ago, prior to the passage of the Middle Income Student Assistance Act

(MISAA).

Overall, applications are already up by 400,000 compared to last year. However, the number of eligible students has increased by 900,000 students. Such data clearly illustrate that the purposes and legislative intent contained in MISAA is working. Likewise, the campus rates of utilization in the College Work-Study and SEOG program show that the MISAA expansion is truly reaching the people it was designed to assist.

There are several other modifications, however, which we support in order to ahcieve this first goal. These include:

1.

2.

Provide annual step increases in the Basic Grant maximum award
to help parents and students keep pace with rising costs and the
effects of inflation. (Note: If such an approach is not adopted,
a substantial number of students will become ineligible from
year to year due to increases in their family incomes.)

Increase the threshold levels for the three campus-based programs
(SEOG, NDSL, and CWS) and establish a level for the SSIG program
which will insure that students will continue to have a proper
balance between grant and self-help funds in their aid packages.
As you know, the threshold levels were initially established in
1972. The decision by the Congress to enact this section has
proven to be a very wise decision in spite of attempts by
various Administrations to eliminate or ignore these provisions.
If institutions are to be able to provide equitable aid packages
to needy students, the continuance of threshold levels is essential.

In addition, the levels must be increased to insure balanced
funding for all aid programs. It also should be noted that
these threshold figures have helped to insure that there is
balanced funding for students in all sectors of postsecondary
education. If such assurances were not provided, we would soon
see that there would be some major discrepancies between the type
of aid students could receive in the various sectors. Such an
imbalance would certainly undermine our pluralistic system of
postsecondary education.

3. Increase the annual SEOG maximum award from $1500 to $2000 and
remove the $4000 cumulative undergraduate limit. With total costs
already exceeding $6000 at many institutions, it is essential
that the SEOG maximum award be increased. This will provide low
and middle-income students the opportunity to attend institutions
of their choice without incurring unreasonably high debt burdens.

4. Increase the annual authorization levels in the SEOG, CWS NDSL, and
SSIG programs to insure that the appropriation committees have
the benefit of this Subcommittee's judgment as to the true levels
of support which will be needed in future years to cope with
rising inflation.

5. Increase the maximum SSIG award to $2000 per year, to allow

states to more effectively meet the financial needs of its neediest students.

6. Establish a maintenance of effort level for state grant expenditures to discourage state reduction in support.

The second goal we address in our recommendations is to provide more flexibility in the grant and self-help programs to adequately address the unique needs and circumstances of individual students. While the programs have successfully served the majority of students, financial aid administrators continually are prevented from effectively meeting an individual student's unique circumstances due to specific program

restrictions.

A frequent example of these restrictions is the current limitation on the number of years a student is eligible to participate in the grant programs. The Basic Grant program currently states that a student may not receive an award for more than four years unless 1) he/she is pursuing

a course of study leading to a first degree which is designed by the

institution to extend over five years, or 2) the student is unable to

complete a course of study within four academic years because of an institutional requirement that the student enroll in remedial courses for which

no credit is given toward the academic degree.

Likewise, the current SEOG statutes indicate that a student may not receive Supplemental Grants for a period of more than four academic years except where 1) the student pursues a course of study leading to a first degree which is designed by the institution to extend over five academic years, or 2) the institution determines that a student's particular circumstances necessitate an additional year of work in order to complete the course of study. While the current statute does provide some flexibility, studies have shown that many students require five years in order to complete their academic degree. This is particularly true of many needy students who come from severely disadvantaged environments and need remedial work to prepare them for a regular course load. In addition, students frequently experience a delay in receiving their degree because of illness or other personal problems.

Therefore, we recommend that the current restriction be removed by changing the statute to permit a student to receive Basic or Supplemental Grants during the period required to complete his or her first undergraduate course of study at the institution, except that this period may not exceed five academic years as a full-time student. This change will provide institutions with more flexibility to respond to the unique needs of individual students without placing undue restrictions on the student. Still another change we recommend to meet this particular goal

is the elimination of those sections in the grant programs which refer to the student being in good standing or showing evidence of academic

63-979 O-1980