An Overview of HESC Activities 2001-2002
In a year framed by unprecedented events and extraordinary challenges,
the New York State Higher Education Services Corp. met its ambitious goal
to help more people than ever pay for college.
Just days after the Sept. 11 attacks, Gov. George E. Pataki issued an
executive order that directed the State University of New York (SUNY)
and City University of New York (CUNY) to provide scholarships for the
innocent victims and the spouses and children of innocent victims of the
terrorist attacks.
The World Trade Center Memorial Scholarship was enacted into law in July
2002 and HESC acted quickly to implement the program. The agency made
almost 100 retroactive scholarship awards for the 2001-2002 academic year.
To help bolster recruitment efforts of volunteer fire departments and
ambulance squads across the state, a new scholarship program was established
by the state Legislature and Gov. George Pataki in 2002. HESC quickly
implemented the program and nearly 600 volunteers are benefiting from
scholarships for the 2002-2003 academic year.
These two new scholarships, coupled with the 14 other scholarships and
the New York College Savings Program administered by HESC, show New York
State has the most comprehensive student financial aid program in the
nation.
Approximately 20 percent of the money the state provides for higher education
is spent on financial aid programs administered by HESC. New York's overall
percentage, which is growing, provides a stark contrast to the national
average of about 8 percent funding for grants and scholarships.
To make the agency's offerings even more accessible to the public, HESC
streamlined procedures and put more information on the HESC Web page.
It's now easier for students and families to get information about the
Tuition Assistance Program (TAP) and other scholarships, student loans,
and the New York College Savings Program.
Grants and Scholarships
New York State grant and scholarship programs provided nearly $709 million
in assistance to students in 2001-2002.
The Tuition Assistance Program (TAP) remains the largest state grant
program in the nation, providing a generous $675 million to more than
350,000 students last year.
The 2002 New York State budget continued to fund the planned increases
in TAP awards for undergraduates. Students may now receive the maximum
award of $5,000 and a minimum award of $500.
HESC continues to pioneer the use of the Web to handle school and student
transactions.
Many new and exciting initiatives were developed this year, including
simple yet powerful Web-based processing options that were easy to navigate
and understand.
School officials can view student records, easily identify missing or
incorrect data within the record and make corrections on the pages. School
administrators may also certify individual student records on the Web.
TAP on the Web will be implemented during the 2002-2003 academic year.
It will provide students, who apply for federal financial aid on the Web,
the ability to link to the New York State TAP application and apply for
state and federal financial aid at the same time.
Student Loans
HESC made it easier for students to secure college loans by allowing
them to apply on-line for a loan and electronically sign their master
promissory notes (MPN).
The e-MPN project was one of Gov. Pataki's e-commerce initiatives for
the state, and has helped HESC maintain its status among the leaders in
the college financial aid community.
Schools and lenders can now conduct all of their loan transactions on
HESC's Web site.
HESC set a record in new loan guarantees for PLUS and Stafford Loans,
totaling almost $2 billion.
This represented a 7.8 percent increase over last fiscal year. The biggest
percentage came in the PLUS loan program, with an 11.9 percent increase.
The Federal Stafford Loan Program showed the largest increase, with a
gain of more than $112 million in loan volume.
HESC's state of the art e-commerce programs, competent and professional
staff, and superior service prompted several colleges and universities
to return to HESC as their loan guarantee agency.
Consolidation loans continued at a very high volume again this year,
although the program was down from $1.970 billion to $1.321 billion in
volume. However, that yearly figure is nearly 290 percent higher than
fiscal year 1999-2000.
Preventing Student Loan Defaults
The agency continued to help students stay current with their loan payments
with an ambitious loan default prevention and debt management system that
posted sizable achievements this past year.
For the first time, New York is among the top 10 federal student loan
guarantors with the lowest student loan default rates in the nation.
The default rate for colleges using HESC as a guarantee agency fell from
5.1 percent last year to a record 4.4 percent this year, according to
federal Department of Education figures. As the national default rate
climbed this year to 5.9 percent, New York's dropped again to a record
low.
The agency continued to work closely with colleges across the state to
educate students about their loan repayment responsibilities.
HESC trained hundreds of college financial aid administrators to successfully
contact and assist students with loan repayment packages and debt management
issues.
HESC's reputation in the financial aid community extends beyond New York's
borders. Canadian college officials met with HESC experts to learn more
about New York's highly successful and often-imitated default-reduction
strategies, and HESC leaders spoke frequently to various trade associations
about the agency's impressive array of default-reduction programs it offers
colleges.
Using e-mail, post cards and telephone contacts, the professionals in
HESC's Advocate Unit made more than 38,000 contacts with delinquent borrowers.
During the coming year, HESC will expand the Advocate Unit's service to
students at 16 community colleges in the state.
New York's College Savings Program
New York's College Savings Program, one of the largest and most popular
in the country, continued to receive very high marks from the national
financial media, with publications rating it among the best college savings
programs in the country.
In its September 2001 issue, "Kiplinger's Personal Finance Magazine"
cited the program's generous New York income tax deduction, low management
fee, and flexibility by calling it "one of the best deals for parents
nationwide."
For the second year in a row, New York's program made " Money Magazine's"
list of "favorite 529 plans."
In its annual college savings issue (May 2002), MONEY magazine lauded
the program's tax advantages, professional management and low fees. The
program also received positive coverage in many other articles throughout
the year.
Although buffeted by an extremely volatile financial market this year,
the public flocked to the program.
By August 2002, the program boasted nearly 250,000 accounts with more
than $1.1 billion in assets.
The College Savings Program also began offering on-line enrollments this
year. More than 16,500 accounts have been opened using e-commerce technology.
Electronic Advances
Many of HESC's noteworthy improvements this year were built on a foundation
of improved electronic communication between the agency and students,
families, and the financial aid community.
The comprehensive and navigable HESC Web page - among the busiest in
state government - had more than 12 million visitors last year.
Four of the top 75 e-commerce initiatives outlined by Gov. Pataki have
been implemented at HESC, saving the agency and its customers time and
money.
Training Financial Aid Professionals
HESC started new training programs using teleconferencing and on-line
technology, increasing the agency's professional training audiences by
50 percent. More than 4,000 financial aid professionals across the state
were trained last year.
The agency reached 170 percent more students and families with critical
financial aid and college planning information last year. College fairs,
public information campaigns, financial aid workshops and various publications
helped educate New Yorkers about the array of college aid packages and
other HESC services.
Superior customer service continued to be the hallmark of the HESC field
staff.
As part of HESC's response to the World Trade Center attacks, agency
staff worked with more than 20 schools near ground zero to provide technical
assistance and support with financial aid processing needs.
Each month, HESC informed schools of new programs, services, and regulatory
changes.
Last Modified on November 05, 2002
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