NACUBO Exposure Draft: Advisory 2021-XX (A Revision of NACUBO Advisories 1997-01 and 2000-05)
This proposed NACUBO Advisory Report updates guidance applicable to both independent and public institutions. This exposure draft modernizes and defines institutional financial aid provided to students, known as the discount or scholarship allowance. The draft proposes one approach to deriving the discount that is displayed on the face or disclosed in the notes to the financial statements.
Due to several factors (improved student information systems, new IPEDS reporting requirements for discounts, GASB's revenue and expense project, rating agency comments about how public institutions calculate the discount, interest in a tuition discounting study for public institutions, and issues with the accuracy of discounts derived by public institutions), NACUBO is rescinding its support for the Alternate Method used by public institutions.
Questions for institutions:
- Are the issues resulting from the use of the Alternate Method described clearly?If not, how could the explanation be improved?
- Does your institution’s student information system align financial aid with specific charges and academic terms?If not, does your institution have an “ordering principle” in which aid is applied, either formally during the financial aid packaging process, or informally, based on policies and procedures?
- Are you currently using the Alternate Method to calculate the tuition discount?If yes, what steps will you have to take to convert to a calculation based on specific identification?
- Would you be willing to participate in a field test, to calculate the discount using both methods and compare the results?
- Is the proposed guidance sufficiently clear, so that one Advisory Report can be used by the sector?
- The new Advisory eliminates the twenty-plus examples in the previous versions and summarizes the different types of aid and how it is reported.Do you prefer the summarized information, or would examples be useful?If examples are preferred, please suggest scenarios to include.
- Please share any other comments or feedback on the new Advisory.