A r c h i v e d  I n f o r m a t i o n

Biennial Evaluation Report - FY 93-94

Chapter 503

Federal Supplemental Educational Opportunity Grant Program

(CFDA No. 84.007)

I. Program Profile

Legislation: Higher Education Act (HEA) of 1965, Title IV, Part A, Subpart 2, as amended (20 U.S.C. 1070b to 1070b-3) (expires September 30, 1997).

Purpose: To help financially needy undergraduate students meet the costs of their education by providing supplemental grant assistance through participating postsecondary institutions.

Funding History

Fiscal Year Appropriation Fiscal Year Appropriation
1966 $ 58,000,000 1986 $394,762,000
1970 164,600,000 1987 412,500,000
1975 240,300,000 1988 408,415,000
1980 370,000,000 1989 437,972,000
1981 370,000,000 1990 458,650,000
1982 355,400,000 1991 520,155,000
1983 355,400,000 1992 577,000,000
1984 375,000,000 1993 585,300,000
1985 412,500,000 1994 583,407,000

II. Program Information and Analysis

Performance Indicators

An important indicator of the Federal Supplemental Educational Opportunity Grant (FSEOG) Program's performance in assisting needy postsecondary students is the targeting of FSEOG awards. The following chart shows one measure of targeting: the percentage of dependent and independent postsecondary students who received FSEOG grants by income category. As shown, 19 percent of full-time low-income dependent students and 17 percent of full-time low-income independent students received FSEOG grants in 1990, a greater percentage than those in the middle-or high-income categories. Among full-time independent students, a slightly larger percentage participated in the program in 1990 than in 1987 in all three income categories. Among full-time dependent students, there was a slight increase in the percentage of low-income students participating and a slight decrease in the percentage of middle-income students participating.

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Population Targeting and Services

Federal Supplemental Educational Opportunity Grants (FSEOGs) are available to undergraduate students who attend participating postsecondary institutions and meet certain other criteria (e.g., have a high school diploma or its equivalent or have passed an exam approved by the Secretary of Education). Students must also demonstrate financial need based on the cost of education and the ability of the student or student and family to pay this cost. The calculation of need is based on a Congressionally specified formula. Final award amounts are determined by the postsecondary institution based on the amount of funds available at the institution and the institution's aid packaging philosophy.

The FSEOG program, along with the Federal Perkins Loan Program and the Federal Work-Study Program are collectively referred to as "Campus-Based Programs" because the institution determines which eligible students receive aid and how much they receive.

Participation: In the 1992-93 award year, the most recent year for which information is available, 976,385 students received FSEOG awards averaging $667. This is an increase in both the number of recipients and the recipients' average award from the 1991-92 award year, when 881,344 students received awards averaging $665.

Distribution By Sector: Table 1 shows the distribution of FSEOG funds across types of institutions between 1983-84, when these data were first collected, and 1992-93. Table 1 shows a slight decrease in the public share--49.8 percent in 1983-84 versus 46.5 percent in 1992-93--while the proprietary share has increased in the same time period (8.4 to 10.4 percent).

Institutional participation in the program has decreased slightly: in 1991-92, 4,530 institutions received program funds while 4,215 participated in 1992-93. Of the 4,215 institutions receiving funds, 35 percent were public, 32 percent were private non-profit, and 33 percent were proprietary (private for-profit) institutions (III.1).

Table 1

Percentage Distribution of FSEOG Funds to Students by Type of Institution,
Award Years 1983-84 to 1992-93

Award Year Public Nonprofit Proprietary Private
1992-93 46.5 43.1 9.6
1991-92 46.3 43.0 10.7
1990-91 48.1 42.0 9.9
1989-90 48.2 40.3 11.5
1988-89 49.7 41.3 9.0
1987-88 48.4 41.4 10.2
1986-87 49.0 41.4 9.6
1985-86 48.5 41.9 9.6
1984-85 49.4 41.9 8.7
1983-84 49.8 41.8 8.4

Source: III.1.

Distribution By Dependency Status: The composition of recipients has changed since 1983-84. Table 2 shows that since 1983, independent students have made up an increasing proportion of FSEOG recipients. By award year 1991-92, 54.5 percent of all recipients were independent students, compared to 30.1 percent in 1983-84.

Table 2

Percentage Distribution of FSEOG Recipients by Dependency Status
1983-84 to 1992-93

Award Year Dependent Independent
1992-93 44.3 55.7
1991-92 45.5 54.5
1990-91 49.4 50.6
1989-90 51.7 48.3
1988-89 54.3 45.7
1987-88 60.6 39.4
1986-87 67.8 32.1
1985-86 68.1 31.8
1984-85 69.0 31.0
1983-84 69.9 30.1

Source: III.1.

The data in Table 3 show that FSEOG awards tend to be larger for dependent students than independent students. Dependent students accounted for 44.3 percent of all recipients but received 55.7 percent of FSEOG funds distributed during the 1992-93 academic year.

Distribution by Income: Table 4 shows the distribution of awards by family income for dependent undergraduate students. Students from families with income less than $30,000 (approximate median family income) made up 77.2 percent of all dependent undergraduate recipients and received 75.9 percent of FSEOG funds awarded to dependent students during the 1992-93 award year. Across income groups, however, average awards increased with the level of family income, probably because students from higher-income families are more likely to attend higher-cost institutions. Given the formulas used to determine need, low-income students may not be eligible for higher awards even though they have lower expected family contributions, because they may attend lower-cost schools and receive higher Pell Grant awards. Both factors may act to reduce their need relative to that of higher-income students.

Table 3

Distribution of FSEOG Awards of Dependency Status for All Students
1992-93 Award Year Undergraduate

Dependent Independent All Students
Percent Distribution of Recipients 44.3 55.7 100.0
Percent Distribution of Aid 54.5 45.5 100.0
Average Award $ 834 534 665

Source: III.1.

Table 4

Distribution of FSEOG Awards by Family Income for Dependent Students
1992-1993 Award Year Undergraduate

Dependent Undergraduate Students
Under
$6,000
$6,000-
$11,999
$12,000-
$17,999
$18,000-
$23,999
$24,000-
$29,999
$30,000+
Percent Distribution of Recipients 12.5 16.6 17.7 16.9 13.5 22.8 100.0
Percent Distribution of Aid 11.3 15.5 17.7 17.4 14.0 24.1 100.0
Average Award $ 749 778 833 861 870 881 834

Source: III.1.

Program Administration

Student eligibility for an FSEOG award is determined by a statutory formula. The student's need is used in determining the size of the award.

Through 1991-92, FSEOG awards were funded entirely by the Federal Government. Beginning in the 1991-92 award year, FSEOG awards are a combination of Federal and institutional contributions. For award year 1993-94 and subsequent years, the minimum institutional contribution is 25 percent. The institutional share may be waived under certain circumstances.

The disbursement of FSEOG awards is a two-step process. First, the Department of Education allocates funds to eligible postsecondary institutions according to a formula that incorporates a guaranteed minimum based on the institution's FSEOG expenditures in the 1985-86 award year, and increases based on a measure of institutional need. Second, institutions award these funds to eligible students, with first priority given to students with exceptional need who also receive Pell Grants.

After award of FSEOG funds to all eligible Pell Grant recipients (in order of lowest family contribution), FSEOG funds are awarded to non-Pell Grant recipients with the lowest family contribution.

The maximum award for an academic year is $4,000 and the minimum award for a full academic year is $100.

Outcomes

Analyses of data from the most recent National Postsecondary Student Aid Study (III.2.) by the Department's Planning and Evaluation Service, presented in Table 5, show that:

Table 5

Percentage of Students Participating in the FSEOG Program
1989-90 Award Year

All Type of Institution Status
2-Yr Public 4-Yr Public Private Prop. Full-Time Part-Time
All 4.6 2.0 5.0 8.9 9.0 7.5 1.3
Dependent 4.8 1.2 4.3 10.0 8.5 6.2 0.8
Income
Under $10,000 14.0 4.8 15.4 25.0 12.1 17.5 3.6
$10,000-29,000 8.2 1.6 8.5 18.9 11.9 11.0 1.0
$30,000 & Over 1.5 0.3 1.1 4.0 3.0 2.1 0.1
Independent 4.6 2.3 6.4 7.0 9.4 10.2 1.5
Income
Under $10,000 8.6 4.9 10.2 13.6 11.8 12.4 3.6
$10,000 & Over 2.5 1.4 3.6 3.7 6.2 7.4 0.9

Source: III.2.

NOTE:
A percentage of participation is for each grouping of students that is described by the intersecting row and column descriptors (e.g., 15.4 percent of Dependents with income under $10,000 attending 4-year Public Institutions received FSEOG awards).

Management Improvement Strategies

As part of the Department's quality-control program, mandatory verification continued in FY 1993 to include, along with other Federal student aid programs, the FSEOG program. Nationally, approximately 30 percent of all financial aid applications are selected for verification. Each year, the Department requires that institutions verify those financial aid applications that have been selected for verification. Students (and parents, if dependent) are required to submit documentation for key items in the student aid application form (such as tax forms and asset estimates) for review by institutions. Verification and institutional documentation requirements reduce student misreporting in the program.

III. Sources of Information

  1. Fiscal Operations Report 1992-93, unpublished tables from Campus-Based Programs Branch, Analysis Section, Office of Student Financial Assistance, U.S. Department of Education.

  2. National Postsecondary Student Aid Study, (Washington, DC: U.S. Department of Eduction, National Center for Education Statistics, 1987.

IV. Planned Studies

The National Postsecondary Student Aid Study for school year 1991-92 will be available in FY 1994. The study is repeated at three-year intervals.

V. Contacts for Further Information

Program Policy:
Harold McCullough, (202) 708-4690

Program Analysis:
Blanca Rosa Rodriquez. (202)708-8963

Program Studies:
Steven Zwillinger, (202) 401-0182

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