Campus-Based Student Financial Aid Programs Under the Higher Education Act

Publication Date: August 2006

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Education

Type:

Abstract:

Three Higher Education Act (HEA) programs -- The Federal Supplemental Educational Opportunity Grant (FSEOG) program, Federal Work-Study (FWS) program, and Federal Perkins Loan program -- collectively are referred to as the campus-based programs. Funding authorization for the campus-based and other HEA programs is extended through September 30, 2006, under the Second Higher Education Extension Act of 2006 (P.L. 109-238). Reauthorization of the HEA, including the campus-based programs, is being considered by the 109th Congress.

Under the campus-based programs, federal funding is provided to institutions of higher education for the provision of need-based financial aid to students. Institutions participating in the programs are required to provide a match of approximately one-third of the federal funds they receive. The campus-based programs are unique among the need-based federal student aid programs in that the mix and amount of aid awarded to students are determined by each institution's financial aid administrator according to institution-specific award criteria (which must be consistent with federal program requirements), rather than according to nondiscretionary award criteria, such as that applicable for Pell Grants and subsidized Stafford Loans.

Each program provides students with a distinct type of aid. The FSEOG program provides grant aid only to undergraduate students. The FWS program provides undergraduate, graduate, and professional students the opportunity for paid employment in a field related to their course of study or in community service. The Perkins Loan program provides low-interest loans with favorable terms and conditions to undergraduate, graduate, and professional students.

Funding is provided to institutions separately for each program according to formulas that take into account both the allocation institutions received in years past (their base guarantee) and their proportionate share of eligible students' need that is in excess of their base guarantee (their fair share increase). From these funds, institutions' financial aid administrators award aid to eligible students having financial need.

The programs are among the oldest of the federal postsecondary aid programs; however, they now operate amidst a host of other aid programs and tax benefits, some of which are not need-based. At present, a relatively small proportion of all students receive campus-based financial aid. Over the past decade, the number of institutions participating in the programs has also declined.

The 109th Congress is considering amending and extending the campus-based programs as it debates reauthorization of the Higher Education Act. This report reviews and analyzes major changes that would be made by H.R. 609, the College Access and Opportunity Act of 2005; and by S. 1614, the Higher Education Amendments of 2005. It will be updated to reflect legislative developments.