Budget Effect Estimator Methodology

NASFAA’s methodology for calculating each of the variables used in our budget simulator is listed below. Unless otherwise noted all data are for the award year 2015-16 and have been derived from the U.S. Department of Education’s Office of Federal Student Aid Data Center (FSA Data Center): Title IV Program Volume Reports. Data used in these calculations came from reports downloaded in June 2017 and from NASFAA’s Campus-Based Aid Allocation Task Force Report.

Federal Pell Grant Variable

  • Number of 15-16 Recipients:
    • Report: Grant Volume report for AY 2015-16 Q4, 2015-2016 Award Year Grant Volume by School.
    • This variable is derived from the tab labeled Award Year Summary, the category Federal Pell Grant Program, and column labeled Sum of Recipients.

Federal Supplemental Educational Opportunity Grant (FSEOG) Variables

  • Total Disbursements:
    • Report: Campus-Based Programs Volume report for AY 2015-16, 2015-2016 Award Year Campus-Based Program Data by School.
    • This variable is derived from the category Federal Supplemental Educational Opportunity Grants and the column labeled Disbursements.
  • Number of 15-16 Recipients:
    • Report: Campus-Based Programs Volume report for AY 2015-16, 2015-2016 Award Year Campus-Based Program Data by School.
    • This variable is derived from the category Federal Supplemental Educational Opportunity Grants and the column labeled Recipients.
  • Average Per Recipient Dollars Cut: This variable is calculated by dividing the FSEOG variable Total Disbursements by the FSEOG variable Number of 15-16 Recipients.

Federal Work-Study (FWS) Variables

  • Number of 15-16 Recipients:
    • Report: Campus-Based Programs Volume report for AY 2015-16, 2015-2016 Award Year Campus-Based Program Data by School.
    • This variable is derived from the category Federal Work-Study and the column labeled Recipients.
  • Proposed FWS Percentage Cut:
    • Report: Campus-Based Programs Volume report for AY 2015-16, 2015-2016 Award Year Campus-Based Program Data by School and internal NASFAA data from our Campus-Based Aid Allocation Task Force report.
    • This variable is calculated by first reducing each institution’s "base guarantee" (based on data used in NASFAA’s Campus-Based Aid Allocation Task Force report) by 24.784 percent, our estimate of the rateable reduction prescribed in the Higher Education Act, as amended, in Sec. 442. The rateable reduction is triggered due to the proposed FWS appropriation ($500 million) not fully covering all institutional base guarantee allocations, which we estimate at approximately $664,709,726 based on data used in NASFAA’s Campus-Based Aid Allocation Task Force report. Once reduced to form an estimate of the institution’s AY 2018-19 allocation, that number was subtracted from the institution’s AY 2015-16 FWS disbursements (from the category Federal Work-Study and the column labeled Disbursements) and then divided by the institution’s AY 2015-16 FWS disbursements to generate the percentage cut.    
  • Dollars Lost
    • Report: Campus-Based Programs Volume report for AY 2015-16, 2015-2016 Award Year Campus-Based Program Data by School and internal NASFAA data from our Campus-Based Aid Allocation Task Force report.
    • This variable is calculated by subtracting our estimate of an institution’s AY 2018-19 FWS allocation (based on a 24.784 percent rateable reduction to the institution's "base guarantee") from the institution’s AY 2015-16 FWS disbursements (from the category Federal Work-Study and the column labeled Disbursements).
  • Average Per Recipient Dollars Cut: This variable is calculated by dividing the FWS variable Dollars Lost by the FWS variable Number of 15-16 Recipients.

Direct Loan Subsidy Variables

  • Number of 15-16 Recipients:
    • Report: Direct Loan Program report for AY 2015-16, Q4, 2015-2016 Award Year Direct Loan Data by School.
    • This variable is derived from the tab labeled Award Year Summary, under the category Direct Loan Subsidized, and column labeled Recipients.
  • Years for compound interest:
    • Report: Direct Loan Program report for AY 2015-16, Q4, 2015-2016 Award Year Direct Loan Data by School.
    • Institutions were assigned either a 2-year or 4-year number to use when calculating their compounded interest accrued variable. This assignment was based on the tab labeled Award Year Summary, under the category Direct Loan Subsidized, and the column labeled School Type. Most schools listed two years or four years, however there were a few exceptions which NASFAA assigned:
      • We assigned a 2-year variable for proprietary and foreign public institutions.
      • We assigned a 4-year variable for private nonprofit and public institutions with no year.
  • Compounded Interest Accrued:
    • Report: 2015-2016 Award Year Direct Loan Data by School.
    • This assignment was based on the tab labeled Award Year Summary, under the category Direct Loan Subsidized, and column labeled $ of Disbursements. This number was divided by the Direct Loan Subsidy variable Number of 15-16 Recipients. This produced an average dollar amount of disbursement per recipient for each institution. We then used the interest rate 3.76 percent, which is the Direct unsubsidized loan undergraduate interest rate for 2016-17, to calculate the amount of interest that would be accrued. The compound interest formula used was ((P*(1+i)^n) - P), where P is the principal, i is the annual interest rate, and n is the variable Years for Compound Interest.

Perkins Loan Variables

  • Total Disbursements:
    • Report: Campus-Based Programs Volume report for AY 2015-16, 2015-2016 Award Year Campus-Based Program Data by School.
    • This variable is derived from the category Perkins Loans under the column labeled Disbursements.
  • Number of 15-16 Recipients:
    • Report: Campus-Based Programs Volume report for AY 2015-16, 2015-2016 Award Year Campus-Based Program Data by School.
    • This variable is derived from the category Perkins Loans under the column labeled Recipients.
  • Average Per Recipient Dollars Cut: This variable is calculated by dividing the Perkins Loans variable Total Disbursements by the Perkins Loan variable Number of 15-16 Recipients.

Total Loss Variable

  • Total Loss: This variable is calculated by adding the FSEOG Total Disbursements Variable, FWS Dollars Lost Variable, and the Perkins Loan Total Disbursements variable.

All data sets were merged together using the institution’s Office of Postsecondary Education ID number (OPE ID).

Questions on the methodology should be directed to NASFAA’s Research Department at Research@nasfaa.org. Questions on the federal budget process, allocations, or NASFAA’s policy work should be directed to NASFAA’s Policy and Federal Relations Department at Policy@nasfaa.org.


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