opportunities to improve service and outcomes 1 don’t stop believing
TRANSCRIPT
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Opportunities to Improve Service and Outcomes
Presenters: Robert Sommers: Regional Director, Midwest; Edfinancial Services Al Hermsen: Director of Financial Aid; Wayne State University
Learning Objectives: State of the union Understanding your options Elements of a good evaluation Outsourcing considerations Practical Experience
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State of the UnionWhere are we now?: Increased volume at our institutions:
o FAFSA Application Processing Statistics
Data obtained from Department of Education Data Center on IFAPhttp://federalstudentaid.ed.gov/datacenter/
Overall Applications0
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
2008 - 20092009 - 20102010 - 2011
Michigan0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
2008 - 20092009 - 20102010 - 2011
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State of the UnionWhere are we now?: Increased volume at our institutions:
o Pell Grant Disbursements
* 2010 – 2011 data as of 3rd Quarter
Data obtained from Department of Education Data Center on IFAPhttp://federalstudentaid.ed.gov/datacenter/
Overall Pell Disbursements$0
$5,000,000,000
$10,000,000,000
$15,000,000,000
$20,000,000,000
$25,000,000,000
$30,000,000,000
$35,000,000,000
2008 - 20092009 - 20102010 - 2011 *
Michigan$0
$200,000,000
$400,000,000
$600,000,000
$800,000,000
$1,000,000,000
$1,200,000,000
2008 - 20092009 - 20102010 - 2011 *
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State of the UnionWhere are we now?: Increased volume at our institutions:
o FAFSA Application Processing Statisticso Pell Grant Disbursements
Decrease in Budgetso State Funding Reducedo Operating Budgets Decreasing or Stagnant
Increased Regulatory Burden
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2010 NASFAA Administrative Burden Survey
Executive Summary Two-Thirds indicate financial aid office facing
a moderate or severe resource shortageo 80% identify shortage as permanent in natureo 88% impact their obligation to assist and counsel
students Major Cause:
o Greater regulatory compliance workload
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2010 NASFAA Administrative Burden Survey
Executive Summary Major Shortage Areas Identified
o Operating Budgetso Staffing Levels (include Counseling, Administrative, and
Support)o Insufficient Technology and Lack of
Technology Training
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2010 NASFAA Administrative Burden Survey
How much additional productivity may be extracted from an industry that has seen remarkable increases in
demand?
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Regulatory RequirementAdministrative Capability
o 34 C.F.R. §668.16(b)(2) - administrationo 34 C.F.R. §668.16(h) - counseling
Provided as a guide for responses to certain questions in the 2010 NASFAA Administrative Burden Survey
Referenced in a letter to College and University Presidents by Federal Student Aid COO, William J. Taggart (electronic announcement dated 4/6/11)
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Regulatory Requirement34 C.F.R. §668.16(b)(2)(2) Uses an adequate number of qualified persons to administer the Title
IV, HEA programs in which the institution participates. The Secretary considers the following factors to determine whether an institution uses an adequate number of qualified persons—(i) The number and types of programs in which the institution participates;(ii) The number of applications evaluated;(iii) The number of students who receive any student financial assistance at the institution and the amount of funds administered;(iv) The financial aid delivery system used by the institution;(v) The degree of office automation used by the institution in the administration of the Title IV, HEA programs;(vi) The number and distribution of financial aid staff; and(vii) The use of third-party servicers to aid in the administration of the Title IV, HEA programs;
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Understanding Your Options
3 Basic OptionsStatus Quo
Do nothing, continue business as usualAdd to internal operations
Increase staff and automate processesOutsource
Partner with third-party service provider to increase process efficiency and staff effectiveness
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Weighing the OptionsDetermine the scope of work
o Pinpoint Issue Peak Processing vs. Everyday Processing
o Automation an option? If yes, do you have access to IT resources? How quickly can system be changed and
testedo Specialized knowledge base situation?o Timing – How quickly does a solution need
to be implemented?
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Weighing the OptionsIdentify Costs – Internal Operations
oQuantitative Costs Salaries & benefits Initial training & continual training Impact of staff turnover Space, equipment and supplies needed
oQualitative Costs Staff morale Service levels impacts Institutional knowledge base
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Internal Operations Cost Example
Internal OperationsStaff
$15,200 Salaries and benefits equal to $19,00080% of time spent on processing verifications
Training1,000Staff person training time and quality control review
Initial training, anticipated update training, additional training due to staff turnover
Equipment/Supplies/Space
1400Equipment (computer, phone)Office SuppliesOffice Space build outAllocated at 80% of cost
Estimated Cost per FT Equivalent Employee $17,600
Estimated FTE 2.0
Total Estimated Cost $35,200
# of Verifications 1800
Cost per verification file $20
Opportunity CostsService level impacts with additional employees and shifting responsibilities toward walk-in/phone trafficImpact on audit findingsTurnaround time on verification and awarding processesImpact on enrollment goals and decision timelinesStaff morale with responsibility changes, reduced or eliminated overtime, and overall job satisfaction
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Weighing the OptionsIdentify Costs - Outsourcing
oQuantitative Costs Fees for services RFP creation and evaluation time Initial training & continual training
oQualitative Costs Staff morale Service levels impacts Experience and knowledge base
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Outsourcing Cost ExampleOutsourcing
Staff$2,500
Allocation of staff for creation and review of RFP
Training500Staff person training time and quality control review
Initial training, anticipated update training, additional training due to staff turnover
Total internal costs $3,000
# of Verifications 1800
Estimated internal costs per verification $2
Outsourcing fee per verification $11
Cost per verification file $13
Opportunity Costs
Service level impacts with additional employees and shifting responsibilities toward walk-in/phone traffic
Impact on audit findings
Turnaround time on verification and awarding processes
Impact on enrollment goals and decision timelines
Staff morale with responsibility changes, reduced or eliminated overtime, and overall job satisfaction
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Elements of a Good Evaluation
Clearly defined scopeRegulatory requirements outlinedMandatory elements definedCosts identified and measured
oActual and OpportunityRealistic timeline determinedMechanism for analysis and
evaluation
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Outsourcing Considerations Improve or maintain service levels
o Possibility of immediate impactKnowledge-base
o Higher education experienceReputation/References
o Current and previous client referenceso Talk with your colleagues
Capacityo Appropriate staffing levelso Systems and technology
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Outsourcing ConsiderationsFlexibility
o Adaptive to institutional requestso Multi-service opportunities
Institutional matcho Partner should match goals/mission
Write a good contracto Outlined expectationso Accountability and performance measureso Clearly stated contract length and
renewability criteria
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Outsourcing ConsiderationsRequest for Proposal (RFP)
oDon’t recreate the wheelo Set clear expectations/timelinesoDon’t ask for more than you needo Know the rules/regulations for your state
and institutionoDevelop evaluation teamo Interviews for finalists
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Outsourcing ConsiderationsManage the relationship
o Ensure communication flows continuallyoReview/monitor established standardsoMonitor billing activity and payments
Successful partnershipo Treat partners as part of your teamoManage expectations within the officeoCommunication flow