The Experimental Sites Initiative, a national financial aid program that allows participating schools to try new ways of disbursing aid to increase efficiency, may be ending its 14-year run on June 30.
The cancellation of the program would increase administrative costs during a time of severe budget constraints, according to the UCLA director of financial aid Ronald W. Johnson.
In the final days of the Bush administration, the decision was made to cancel the program. A letter to Chancellor Gene Block from Deputy Assistant Secretary for Policy, Planning and Innovation Vince Sampson, said that the experiments have not been successful in leading to changes in either the Higher Education Act, regulatory legislation originally passed in 1965, or the implementation of regulations. This comes despite the fact that participating institutions have not reported an ineffectiveness, Johnson said.
UCLA Assistant Director for Compliance Andrew Arrendondo said that the schools chosen to participate in the program are large schools, which typically do not have problems with students accepting financial aid and then leaving school. This made them the best places to evaluate the efficiency of financial aid programs, Arrendondo added.
Johnson added that the UCLA financial aid department’s administrative costs would increase substantially as a result of the program’s cancellation.
“We would have to revert back to a rather draconian system,” Johnson said.
During a time when the University of California budget is under intense constraints, these additional costs are going to be harmful. The letter to Chancellor Block stated that the Department of Education’s office of Federal Student Aid will help UCLA during the transition between financial aid systems. It does not specify what type of assistance will be offered to prevent the likely increase in administrative costs.
While both Johnson and Arrendondo were unable to specify exactly how many students will be affected by the cancellation of the program, “almost any student with a loan would be affected,” Arrendondo said. There would essentially be a new system to navigate when dealing with financial aid.
The Experimental Sites program, implemented in the 1995-1996 academic year, developed financial aid disbursement policies that would be more cost-effective for the schools, while constructing a system with fewer complications for students.
UCLA joined the program in the first academic year the program was enacted and currently participates in five experiments: entrance counseling on loans, exit counseling on loans, loan fees, loan prorating during the final term of attendance, and not requiring students to pay back small amounts of money that may have been over-awarded to them.
“The experimental programs are reviewed annually, and those that prove to be most effective are then adopted into law and implemented nationally,” Johnson said.
Two experiments that were made into law are the Multiple Disbursement for Single Term Loans, and the Thirty-Day Delay. The Multiple Disbursements experiment exempted schools from giving students multiple payments throughout the quarter, or semester, and instead gives students all of their aid for the term at the beginning, when the bulk of student fees are assessed, according to the Experimental Sites Web site.
This program greatly benefits the thousands of students at UCLA who rely on financial aid to cover their fees. It also decreases the work that financial aid officials have previously had to do to address the numerous late fees, thereby reducing administrative costs, Johnson said.
The Thirty-Day Delay experiment exempted schools from having to wait 30 days after the start of the term to disburse funds to students as previously required, Arrendondo said.
Instead, the funds are dispersed within the first few weeks of the term. This also remedied problems that students had paying their fees on time, Arrendondo added.
The program’s cancellation is currently up for reversal before the United States Department of Education.