ILASFAA Annual Conference
April 16-18, 2008
How did we get here?
Why do we do what we do?
Where do we go from here?
How Federal and State
Student Aid Evolved
– To develop skills needed by the country
– To provide increased access to post secondary
education across income groups
– To provide increased choice of post secondary schools
for low and middle income students
FACT: Federal Student Aid for post secondary education
serves 8 million students each year – However, it
represents less than 1% of the annual federal budget.
How Did We Get Here?
The History of Federal Student and State
Student Financial Aid
1862 - The Morrill Act
This act created Land Grant Colleges by encouraging
states to establish public universities by providing
Federal land and financial support. Created for the
working classes, these colleges taught agriculture,
military tactics, mechanical arts and classical studies.
How Did We Get Here?
The first US Office of Education was created. It’s
role was limited to gathering and disseminating
information about the status of education
1944 – The Serviceman’s Readjustment Act
This created the GI Bill. Originally created to
cover tuition, fees, books, supplies and living
expenses, this was the first major federal offering
of student aid to individual students instead of
How Did We Get Here?
Legislation was passed by the Illinois General
Assembly and signed by Governor Stratton to
create the Illinois State Scholarship
Commission (ISSC). The purpose of the new
agency was to increase access to college for
Illinois students by offering scholarships and
How Did We Get Here?
1958 – The National Defense Education Act
This created the National Defense Student Loan (NDSL)
Program – the first student aid program for nonveterans. A direct result of the launching on October 4,
1957 of the USSR Satellite SPUTNIK, Congress passed
this act to fund student loans in the critical fields of
study in math, science and foreign languages.
ISSC awards the first honorary scholarships to
academically-talented students with no financial need.
How Did We Get Here?
1964 – The Economic Opportunity Act
This act created the College Work Study (CWS)
Program. It offered students part-time
employment opportunities while they pursued
their college degrees.
How Did We Get Here?
1965 – The Higher Education Act (HEA)
Title IV of the HEA created the Educational Opportunity
Grant Program, increasing college opportunities for lowincome students.
It also created the Guaranteed Student Loan Program (GSL).
This program allowed students to borrow from private
lenders for college expenses. It was called “guaranteed”
because the lenders wouldn’t lose money.
Illinois legislation established the Illinois Guaranteed Loan
Program (IGLP) with ISSC as the guaranty agency.
How Did We Get Here?
Illinois issues the first need-based college
grant under the new Monetary Award
Program (MAP).
Eventually, four million MAP awards will be
issued by ISSC/ISAC between 1967 and 2007
How Did We Get Here?
These amendments created the Basic Education Opportunity Grant
(BEOG) Program. This new “portable” grant could be used at any eligible
post secondary school.
They changed the name of the Educational Opportunity Grant Program to
SEOG because it now “supplemented” the BEOG Program
They changed the name of the National Defense Student Loan Program to
the National Direct Student Loan Program
These amendments also established the State Student Incentive Grant
(SSIG) Program and allowed Proprietary Schools to participate in Title IV
How Did We Get Here?
These amendments added SAP Requirements and required
participating institutions to provide consumer information
to students.
They reauthorized all existing FSA programs and tightened
the rules.
Later becoming the Illinois National Guard (ING) Grant
Program, ISSC began awarding scholarships to enlisted
persons serving in the IL National Guard or Naval Militia.
How Did We Get Here?
1978 – Middle Income Student Assistance Act
This act provided assistance to middle-income
parents by expanding Basic Grant eligibility
and lifting the income ceiling on the GSL
How Did We Get Here?
These amendments established PLUS Loans,
allowing parents to borrow $3,000 per year for
each dependent child, regardless of the parent’s
They renamed the BEOG Program to the Pell
Grant Program in honor of the prime sponsor of
the program, Senator Claiborne Pell.
How Did We Get Here?
These amendments created two need analysis formulas,
one for Pell and another for all other Title IV Programs.
They tightened academic and eligibility standard.
They created a new loan program called the “Supplemental
Loan for Students” (SLS) for Independent Students.
They renamed the National Direct Student Loan Program to
the Federal Perkins Loan Program after Congressman Carl
D. Perkins.
How Did We Get Here?
The Guaranteed Student Loan Program was
renamed the Stafford Loan Program in honor of
Senator Robert T. Stafford, a major sponsor of
student assistance legislation.
The Illinois State Scholarship Commission (ISSC)
was renamed the Illinois Student Assistance
Commission (ISAC).
How Did We Get Here?
The Omnibus Budget Reconciliation Act
This act introduced “Ability to Benefit” testing.
It also held schools accountable for high loan
default rates. Schools were ineligible for the
Stafford Loan Program if rates were 35% or
How Did We Get Here?
These amendments combined the two Federal need
analysis formulas into one.
They required the student aid application process to be
free to students
They renamed the private lender loan programs FFELP
and created the Federal Direct Loan Program.
They reauthorized student aid programs for 5 years.
How Did We Get Here?
The first awards were made to students under
the Illinois Incentive for Access (IIA) Program
Illinois families were afforded a taxadvantaged method of saving for college
through the Illinois Prepaid Tuition Program
called College Illinois!
How Did We Get Here?
Taxpayer Relief Act
This act established tax credits and relief
measures to offset the cost of post secondary
education. These included the Hope Scholarship;
Lifetime Learning; Student Loan Interest
deduction, education IRAs, etc.
It also authorized various initiatives and
incentives for saving for college.
How Did We Get Here?
The HEA was amended to establish the Return to Title IV
The SSIG Program was renamed LEAP and GEAR UP was
These amendments increased services and options for
federal student loan borrowers.
For the first time, Title IV eligibility was tied to compliance
with federal and state drug laws.
How Did We Get Here?
The Higher Education Reconciliation
Act of 2005 (HERA)
This act created ACG and SMART Grants.
It made active duty military personnel
The Grad PLUS Program was created.
It changed the treatment of prepaid tuition plans.
The qualifications for the Zero EFC and Simplified
needs test was changed.
How Did We Get Here?
The College Illinois! Capstone Loan Program pilot was
launched to make low-interest loans with “salarysensitive” interest rates to Illinois college seniors.
The College Cost Reduction and Access Act of 2007
Reauthorization is Pending
What Principles Guide Us?
• Our institutions each have a Code of Conduct
• The Participation Agreement between an institution
and the Department of Education addresses conduct
• ILASFAA has a Statement of Ethical Principles in the
Association’s Policies and Procedures Manual
• MASFAA has a Statement of Ethics and Professionalism
listed in their Policies and Procedure Manual
• NASFAA has a Statement of Ethical Principles and Code
of Conduct for Institutional Financial Aid Professionals
Why Do We Do What We Do?
A Desire to help others
Enjoy interacting with people
Good communicators
Good listeners
Responsive to the needs of others
Enjoy problem solving
Organizational abilities
Strong writing skills
Detail oriented
Comfortable working with numbers
Ability to navigate through bureaucracy
Like to be continually educated
Where Do We Go From Here?
• “Lifers” will move up through the ranks to Asst.
Director, Director, Chief Administrator, VP, etc.
• Account Executives with lenders
• Positions with guarantee agencies or servicers
• Loan departments with banks
• Human Resources
• Career guidance
• Counseling
• Any high-volume environment that involves
contact with people
The More You Give, the More You Get
• Volunteer in your Community
• Volunteer Opportunities in the State, Regional
and National Associations
– Professional and personal growth
– Forum to collaborate on new and proposed legislation
and regulations – a unified voice
– Networking opportunities
“Success usually comes to those who are too busy to be
looking for it.” - Henry David Thoreau
Janet Ozuna
Director of Finance
Midstate College
411 W. Northmoor Road
Peoria, IL 61614
(309) 692-4092