History of the 568 Presidents Group
A Brief History
Beginning in the mid-1950s, a number of private colleges and universities agreed to award financial aid on the basis of demonstrated financial need. This principle of need-based aid also became the basis for awarding most federal undergraduate aid, and this approach enabled colleges to spread their limited financial aid dollars among the greatest number of worthy applicants. For some five decades, need-based aid has helped to assure the high degree of access to education enjoyed by low- and middle-income students across the country.
Section 568 of the Improving America's Schools Act (IASA) of 1994 sets forth the conditions under which financial aid officers from different colleges and universities may establish common approaches for awarding non-federal, or institutional, student aid. The provision does not permit discussion or comparison of institutional aid awards for individual students.
Discussions among institutions concerning these common rules had been thrown into question by an antitrust action initiated by the Justice Department in 1989. When the case was settled in 1993, the parties agreed on the specific ways in which colleges and universities could work together to maintain their commitment to students and families and to need-based financial aid principles. Congress subsequently enacted Section 568 after the settlement to set forth in statute the terms under which institutions may cooperate in awarding need-based aid.
Section 568 applies only to institutional aid and only to colleges and universities that admit all students on a need-blind basis -- that is, without considering the financial circumstances of the student or the student's family.
The Role of Institutional Methodology
In the late 1950s, a number of colleges and universities worked with the College Board to develop a set of general principles and methods to be used in determining a family's eligibility for institutional aid. Referred to as the Institutional Methodology (IM), this formula for determining a family's ability to support the expenses associated with college was updated most recently in 1999. The principles and methods included within in the newly revised IM address a number of issues not covered in the federal rules for need analysis. Section 568 has allowed financial aid officers to pool their expertise in the review of these complex issues and has resulted in recommendations for further revisions of the methodology used by participating institutions. For example, these recommendations provide guidelines for: the expected contribution, if any, from the non-custodial parent in the case of divorce or separation; the treatment of certain business or real estate expenses, such as depreciation, that may reduce income available to pay for college; the valuation of rental properties owned by an applicant's family; and the recognition of unusually high medical and dental expenses. Because of these discussions, colleges and universities eligible to participate have at their disposal more sophisticated guidelines that result in a more accurate and reliable assessment of the family's financial circumstances. Financial aid awards are therefore be more equitable and institutional funds will be awarded in a way that supports the maximum number of students. In addition, financial aid officers are both better informed about the needs analysis methods used by each school and better able to explain differences in aid packages to families.
The Formation of the 568 Presidents Group
In late 1998, an ad hoc group of college and university presidents met to discuss their shared belief in the primacy of need-based financial aid and their common concern about restoring public confidence in a financial aid system that aspires to be both understandable and fair. At that time, they committed to the development of a common methodology based on recommendations that had already been developed by participating institutions for further consideration
On April 18, 2000, the 568 Presidents appointed a group of eight campus-based senior financial aid professionals to serve on a Common Standards Subcommittee and to report back to them on ways to improve the financial aid system so as to better serve the needs of families in their efforts to pay for college.