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entitled 'Federal Student Aid: Recent Changes to Eligibility 
Requirements and Additional Efforts to Promote Awareness Could Increase 
Academic Competitiveness and SMART Grant Participation' which was 
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Report to Congressional Requesters: 

United States Government Accountability Office:
GAO: 

March 2009: 

Federal Student Aid: 

Recent Changes to Eligibility Requirements and Additional Efforts to 
Promote Awareness Could Increase Academic Competitiveness and SMART 
Grant Participation: 

GAO-09-343: 

GAO Highlights: 

Highlights of GAO-09-343, a report to congressional requesters. 

Why GAO Did This Study: 

The Academic Competitiveness (AC) and National Science and Mathematics 
Access to Retain Talent (SMART) Grants were established by the Deficit 
Reduction Act of 2005. The grants provide merit-based financial aid to 
certain low-income college students eligible for Federal Pell Grants 
and are administered by the Department of Education (Education). In the 
first year of implementation, participation was lower than expected. 
GAO was asked to determine (1) factors affecting AC and SMART Grant 
student participation; (2) challenges colleges face in administering 
the grant programs; and (3) the extent to which Education has assisted 
states and colleges with implementation. To address these objectives, 
GAO analyzed data on AC, SMART, and Pell Grants, and interviewed 
officials from Education and 12 state education agencies, 
administrators from 42 selected colleges, and several national 
associations. 

What GAO Found: 

Student participation in the AC and SMART Grant programs was affected 
by eligibility requirements and a short implementation time line, 
though participation rates varied somewhat depending on characteristics 
of states and colleges. Unlike most other federal financial aid 
programs, to be eligible for these grants, students must demonstrate 
both financial need and academic merit and meet additional requirements 
such as U.S. citizenship and full-time enrollment. According to 
financial aid administrators GAO interviewed, the requirement to 
complete a rigorous program of study in high school was one of the 
biggest barriers to AC Grant participation, while Educationís 
requirement to take at least one course each semester in the studentís 
SMART-eligible major, such as science, technology, and math, was the 
biggest barrier to SMART Grant participation. A relatively short 
implementation time line also affected some collegesí ability to 
identify eligible students. Administrators expect that recent 
legislative changes taking effect in July 2009 will expand eligibility 
and thus increase participation in both grant programs. 

Financial aid administrators reported that certain AC and SMART Grant 
eligibility requirements were difficult to verify. For AC Grants, the 
most challenging requirement to verify was that students completed a 
rigorous program of study in high school. To verify this requirement, 
administrators generally had to manually review transcripts to ensure 
the courses taken aligned with one of several rigorous programs 
recognized by Education. For SMART Grants, Educationís requirement that 
students take one course in their SMART-eligible major each semester 
was often cited as challenging for administrators to verify and 
entailed reliance on other academic departments. In addition, for both 
programs, many administrators said that it was difficult to determine 
if students were enrolled in an appropriate academic year to qualify 
for the grant programs. While recent legislation will change several 
eligibility requirements, these modifications are unlikely to address 
administratorsí most difficult task of verifying rigor. Thus, some 
administrators expect their workload to increase as more students will 
need to be reviewed for grant eligibility. 

Education has provided guidance and training to colleges to help them 
implement the AC and SMART Grant programs, but outreach to promote 
awareness of the grants to state education agencies, high schools, and 
students has been limited. Only a few state officials GAO interviewed 
reported that they were provided with information or promotional 
materials about the grant programs. Many college financial aid 
administrators reported that they found Educationís assistance useful 
and responsive to their needs, but some said that more outreach to high 
schools was necessary to increase grant program participation. Without 
additional outreach to promote the grants among high school students 
and Pell-eligible college students, Education may not be able to 
achieve its goal to double the number of AC and SMART Grants awarded by 
the 2010-2011 funding cycle. Agency officials told GAO they had no 
plans to promote the programs, since the grants will sunset at the 
conclusion of the 2010-2011 academic year. 

What GAO Recommends: 

GAO recommends that Education (1) develop a strategy to increase 
awareness of these grant programs among states and high schools, and 
(2) use existing forums to facilitate the sharing of effective 
practices among states and colleges to help mitigate some of the 
administrative challenges of verifying the grantsí requirements. 
Education agreed with these recommendations. 

To view the full product, including the scope and methodology, click on 
[hyperlink, http://www.gao.gov/products/GAO-09-343]. For more 
information, contact George Scott at (202) 512-7215 or scottg@gao.gov. 

[End of section] 

Contents: 

Letter: 

Results in Brief: 

Background: 

Eligibility Requirements and a Short Implementation Time Line Affected 
Overall Participation, Which Varied among States and Colleges: 

Administrators Reported That Certain Eligibility Requirements Were 
Challenging to Verify: 

Education Provided Assistance Primarily to Colleges, but Efforts to 
Promote the Grant Programs to States and High Schools Have Been 
Limited: 

Conclusions: 

Recommendations for Executive Action: 

Agency Comments and Our Evaluation: 

Appendix I: Objectives, Scope, and Methodology: 

Appendix II: Colleges Interviewed in Selected States: 

Appendix III: State Education Agencies Interviewed in Selected States: 

Appendix IV: Comments from the Department of Education: 

Appendix V: GAO Contact and Staff Acknowledgments: 

Tables: 

Table 1: Projected and Actual Program Participation for Academic Years 
2006-2007 and 2007-2008: 

Table 2: Current Statutory Eligibility Requirements for AC and SMART 
Grant Programs: 

Table 3: Recent Legislative Changes Amending Eligibility Requirements 
for AC and SMART Grant Programs: 

Table 4: Time Line for Initial Year of AC and SMART Grant Programs, 
Academic Year 2006-2007: 

Figures: 

Figure 1: Number of Colleges Reporting AC Grant Requirements as 
Barriers to Student Participation: 

Figure 2: Number of Colleges Reporting SMART Grant Requirements as 
Barriers to Student Participation: 

Figure 3: Number of Colleges Reporting AC Grant Requirements as 
Challenging to Verify: 

Figure 4: Number of Colleges Reporting SMART Grant Requirements as 
Challenging to Verify: 

Figure 5: AC and SMART Grant Participation Rates of Selected States: 

Abbreviations: 

AC: Academic Competitiveness: 

AP: Advanced Placement: 

Education: Department of Education: 

FAFSA: Free Application for Federal Student Aid: 

GPA: grade point average: 

IB: International Baccalaureate: 

IFAP: Information for Financial Aid Professionals: 

NT4CM: National Training for Counselors and Mentors: 

SMART: National Science and Mathematics Access to Retain Talent: 

SSI: State Scholars Initiative: 

STEM: science, technology, engineering, and mathematics: 

[End of section] 

United States Government Accountability Office:
Washington, DC 20548: 

March 25, 2009: 

The Honorable Edward M. Kennedy: 
Chairman: 
Committee on Health, Education, Labor, and Pensions: 
United States Senate: 

The Honorable Christopher J. Dodd: 
Chairman: 
Subcommittee on Children and Families: 
Committee on Health, Education, Labor, and Pensions: 
United States Senate: 

The Honorable Sherrod Brown: 
United States Senate: 

The Honorable Tom Harkin: 
United States Senate: 

The Honorable Bernard Sanders: 
United States Senate: 

In recent years, there has been growing concern about the quality of 
education in the United States and its effect on our country's 
competitiveness in the world economy. Although more than 60 percent of 
secondary school[Footnote 1] graduates enter 2-and 4-year institutions 
of higher education (colleges), recent data indicate that over 20 
percent of incoming freshmen are enrolled in at least one remedial 
course. Further, only about one-third of 25-to 29-year-olds in the 
United States earn a bachelor's degree or higher.[Footnote 2] While 
there are many influencing factors, research shows that the preparation 
students receive in high school, particularly in math, English, and 
science, is one of the best predictors of their success in college and 
the workplace. Without emphasis on these subject areas, students 
entering colleges across the United States are falling behind their 
counterparts in other countries. In 2006, Congress created two new 
grant programs for full-time students attending degree-granting 
institutions--the Academic Competitiveness (AC) and National Science 
and Mathematics Access to Retain Talent (SMART) Grants--which provide 
merit-based financial aid to certain low-income college students 
eligible for Federal Pell Grants.[Footnote 3] The AC Grant program 
provides grants to eligible first-and second-year undergraduates who 
have completed a rigorous course of study in high school. The SMART 
Grant program provides grants to eligible third-and fourth-year 
undergraduates who major in certain designated technical fields, such 
as science, technology, engineering, mathematics, or critical foreign 
languages. Both grant programs are administered by the Department of 
Education (Education). 

The AC and SMART Grant programs were established by the Deficit 
Reduction Act of 2005, which was signed into law in February 2006. 
Approximately $4.5 billion was appropriated for both programs for 
fiscal years 2006 through 2010, and absent an extension, these programs 
are set to expire at the end of academic year 2010-2011. Under this 
Act, both the AC and SMART Grant programs require students to be 
eligible for a Pell Grant, be a U.S. citizen, and attend college full- 
time.[Footnote 4] For AC Grants, in addition to demonstrating 
completion of a rigorous program of study in high school, both first- 
and second-year students must have graduated from high school after a 
certain date, and second-year students must also have a cumulative 
grade point average (GPA) of at least 3.0 or the equivalent. For SMART 
Grants, third-and fourth-year college students must major in particular 
fields of study and maintain a 3.0 GPA (or the equivalent) in the 
coursework for their major. As such, these grant programs require 
students to demonstrate both financial need and academic merit, unlike 
most other federal student aid programs which are need-based only. 

In the first year of implementation, which was academic year 2006-2007, 
the number of grants awarded was about 25 percent lower than expected 
for both AC and SMART Grants, and resulted in Education awarding $450 
million in grants, compared with the $790 million appropriated for 
fiscal year 2006. Furthermore, program participation has varied widely 
across states, with a higher percentage of Pell Grant recipients 
receiving these grants in some states than in others. To address 
questions regarding the lower-than-expected participation rate and the 
varied rate of participation among states and colleges, we focused on 
the (1) factors that affected student participation in the AC and SMART 
Grant programs, (2) challenges colleges face in administering the two 
grant programs, and (3) extent to which Education has assisted states 
and colleges with implementing the two grant programs. 

To conduct our work, we analyzed data provided by Education on AC, 
SMART, and Pell Grants to determine state participation rates for the 
AC and SMART Grant programs. We determined these data to be 
sufficiently reliable for the purposes of this report. Using grant data 
from academic year 2006-2007, we identified states with relatively high 
and low AC and SMART Grant participation rates. We selected seven 
states based on their grant participation rates, as well as on 
geographic location, number of colleges, and number of Pell Grants 
awarded. Our selected states were Arizona, Georgia, Massachusetts, 
Michigan, North Dakota, Rhode Island, and Utah. For the AC Grant 
program, Massachusetts, North Dakota, and Rhode Island had high 
participation rates, and Arizona, Michigan, and Utah had low 
participation rates. Participation rates for the SMART Grant program 
were high in Massachusetts, North Dakota, and Utah and were low in 
Arizona, Georgia, and Rhode Island. 

Within these seven states, we selected a nonprobability sample of 42 
colleges based on whether: 

* the AC and SMART Grant participation rates were high or low; 

* the college offered 2-year or 4-year degree programs; 

* the college was public, private for-profit, or private nonprofit; 
and: 

* the college was in an urban, suburban, or rural setting. 

For each state, we spoke with financial aid administrators from the 
selected colleges and with officials from key state education agencies 
to obtain information related to the three research objectives. We 
conducted interviews in-person in four states and by phone in the 
remaining three states. Although many revised eligibility requirements 
for the two programs will take effect in July 2009--such as to include 
students attending part-time[Footnote 5] and those enrolled in 
certificate programs, among others--our work focused on implementation 
and participation efforts under the original eligibility requirements. 

In addition, we interviewed Education officials and reviewed relevant 
documentation, as well as interviewed representatives from four 
national higher education associations and two school counselor 
associations. Appendix I provides a more detailed description of our 
study's scope and methodology. We conducted this performance audit from 
April 2008 to March 2009 in accordance with generally accepted 
government auditing standards. Those standards require that we plan and 
perform the audit to obtain sufficient, appropriate evidence to provide 
a reasonable basis for our findings and conclusions based on our audit 
objectives. We believe that the evidence obtained provides a reasonable 
basis for our findings and conclusions based on our audit objectives. 

Results in Brief: 

Student participation in the AC and SMART Grant programs was affected 
by eligibility requirements and a short implementation time line, and 
participation rates varied somewhat depending on characteristics of 
states and colleges, according to the financial aid administrators and 
state officials we interviewed. To be eligible for these grant 
programs, students must demonstrate both financial need and academic 
merit. For AC Grants, many financial aid administrators we contacted 
reported that the merit-based eligibility requirements--such as taking 
rigorous curricula in high school--were generally the most difficult 
for students to meet. According to some state officials and 
administrators, low-income students may not have access to or are less 
likely than other students to take rigorous curricula. For SMART 
Grants, Education's requirement that students take at least one course 
each semester in their SMART-eligible major posed a barrier for some 
students. In some cases, students who completed all required courses in 
their SMART-eligible major prior to their senior year became ineligible 
to receive the grant that year. Student participation was also affected 
by a short implementation time line, hindering colleges' efforts to 
identify potentially eligible students and resulting in delayed awards 
to some students. In addition, participation rates varied among states 
and colleges and may have been attributable to state characteristics 
such as the extent to which states' high schools offered rigorous 
curricula. Likewise, characteristics of colleges, such as whether they 
are 2-or 4-year, could affect participation. For example, 2-year 
institutions such as community colleges are more likely to enroll 
older, part-time students who are not eligible for AC Grants. 
Similarly, the number of SMART-eligible majors a college offers can 
affect the number of students receiving these grants. Recent 
legislative changes that become effective in July 2009 will amend the 
eligibility requirements and are expected to increase student 
participation in both grant programs. 

Financial aid administrators reported that certain AC and SMART Grant 
eligibility requirements were difficult to verify. The AC Grant 
eligibility requirement most often cited was that a student completed a 
rigorous program of study in high school. To verify this requirement, 
administrators had to manually review high school transcripts to ensure 
the courses taken aligned with one of several programs of study deemed 
rigorous by Education. Because of the time-consuming nature of this 
verification process, many administrators reportedly worked extra hours 
or had to rely on other offices, such as admissions, to review 
transcripts. While the process of reviewing transcripts was generally 
reported as challenging, not all colleges experienced difficulty. A few 
colleges said that verifying rigor was fairly straightforward, since 
their admission requirements closely aligned with one of the rigorous 
programs of study. While generally easier to administer than the AC 
Grant program, Education's SMART Grant requirement that students take 
one course in their SMART-eligible major each semester was often 
reported as challenging to verify. Some administrators told us that 
verifying this requirement entailed coordination with other 
departments; others commented that it required a manual review of 
students' schedules. In addition, for both programs, many 
administrators said that it was difficult to determine if students were 
enrolled in an appropriate academic year to qualify for the grant 
programs. Because "academic year" under the AC and SMART Grant programs 
is used differently than for some other federal student aid programs, 
some administrators reportedly found it confusing to implement. Some 
administrators we interviewed expect their workload to increase when 
legislative changes take effect in July 2009, since more students will 
likely need to be reviewed for grant eligibility. 

Education has provided guidance and training to colleges to help them 
implement the AC and SMART Grant programs, but outreach to promote the 
grants to states, high schools, and students has been limited. When the 
grant programs were implemented in 2006, Education provided written 
guidance to financial aid administrators, incorporated AC and SMART 
Grant information in training sessions at regional and national 
financial aid conferences, and posted information to the agency's 
Information for Financial Aid Professionals (IFAP) Web site. Many 
administrators we interviewed told us that they found Education's 
assistance useful and responsive to their needs. However, some state 
officials, administrators, and school counselor association 
representatives we spoke with said that additional outreach from 
Education to promote awareness of the grants is necessary. Education's 
primary contact with states involved obtaining information on the 
states' rigorous curricula to determine whether they met the definition 
of a "rigorous program of study" for the AC Grant program. Education's 
outreach to high schools--including counselors--was limited as well, 
even though according to representatives from one national school 
counselor association and a report issued by Education, counselors 
could play a pivotal role in promoting awareness among high school 
students while they still have the opportunity to take the courses 
necessary to qualify for the grants. For example, representatives from 
school counselor associations told us that their members had minimal 
knowledge of the grant programs until recently and had not received any 
guidance, training, or promotional materials about the grant programs 
from Education. Agency officials told us they had no plans to promote 
the programs at the high school level in light of their pending 
expiration at the conclusion of academic year 2010-2011. 

To maximize student participation in the AC and SMART Grant programs 
while minimizing the administrative challenges faced by colleges, we 
are recommending that the Secretary of Education take appropriate and 
timely steps, in light of the programs' scheduled sunset in 2010-2011, 
to promote awareness of the grant programs among states and high 
schools and to facilitate the sharing of effective practices to 
mitigate challenges of some eligibility requirements, especially the 
completion of a rigorous high school program. In its written comments 
on a draft of the report, Education concurred with our recommendation 
to develop a strategy to increase awareness of both grant programs and 
also agreed to provide a forum for sharing effective practices. 
Education's comments are provided in appendix IV. 

Background: 

The Higher Education Reconciliation Act of 2005, part of the Deficit 
Reduction Act of 2005, created two new grant programs for Pell-eligible 
college students: the Academic Competitiveness (AC) Grant and the 
National Science and Mathematics Access to Retain Talent (SMART) Grant. 
The AC and SMART Grant programs were supported with approximately $4.5 
billion[Footnote 6] in appropriations over 5 years: 

* $790 million for fiscal year 2006, 

* $850 million for fiscal year 2007, 

* $920 million for fiscal year 2008, 

* $960 million for fiscal year 2009, and: 

* $1.01 billion for fiscal year 2010. 

Education's Projections of Program Participation: 

Education did not have readily available data to develop reliable 
projections and, therefore, used data from several longitudinal studies 
as a proxy to estimate the level of participation for both grant 
programs. As a result, during the 2006-2007 academic year, actual 
participation in both grant programs was lower than Education had 
projected. Education awarded about 306,000 of the 420,000 projected AC 
Grant awards and about 63,200 of the 80,000 projected SMART Grant 
awards. During the 2007-2008 academic year, about 396,800 AC Grants and 
65,100 SMART Grants were awarded, compared with Education's initial 
estimates of 460,000 AC Grants and 80,000 SMART Grants (see table 1). 

Table 1: Projected and Actual Program Participation for Academic Years 
2006-2007 and 2007-2008: 

Award year 2006-2007: AC Grants; 
Projected awards[A]: Number of grants awarded: 420,000; 
Projected awards[A]: Amount awarded: $340 million; 
Actual awards: Number of grants awarded: 306,043; 
Actual awards: Amount awarded: $242 million. 

Award year 2006-2007: SMART Grants; 
Projected awards[A]: Number of grants awarded: 80,000; 
Projected awards[A]: Amount awarded: $310 million; 
Actual awards: Number of grants awarded: 63,165; 
Actual awards: Amount awarded: $206 million. 

Award year 2006-2007: Total; 
Projected awards[A]: Number of grants awarded: 500,000; 
Projected awards[A]: Amount awarded: $650 million; 
Actual awards: Number of grants awarded: 369,208; 
Actual awards: Amount awarded: $448 million. 

Award year 2007-2008: AC Grants; 
Projected awards[A]: Number of grants awarded: 460,000; 
Projected awards[A]: Amount awarded: $390 million; 
Actual awards: Number of grants awarded: 396,793; 
Actual awards: Amount awarded: $307 million. 

Award year 2007-2008: SMART Grants; 
Projected awards[A]: Number of grants awarded: 80,000; 
Projected awards[A]: Amount awarded: $310 million; 
Actual awards: Number of grants awarded: 65,118; 
Actual awards: Amount awarded: $204 million. 

Award year 2007-2008: Total; 
Projected awards[A]: Number of grants awarded: 540,000; 
Projected awards[A]: Amount awarded: $700 million; 
Actual awards: Number of grants awarded: 461,914; 
Actual awards: Amount awarded: $511 million. 

Source: Department of Education. 

[A] 71 Fed. Reg. 64402, 64416-64417. 

[End of table] 

In developing the projections, Education used data from longitudinal 
studies such as the National Postsecondary Student Aid Study and 
National Assessment of Education Progress High School Transcript Study. 
This analysis allowed Education to estimate the percentage of Pell 
recipients that may be eligible for the grants and the average amount 
of their awards. Specifically, Education used a student's level of math 
courses completed as a proxy for a rigorous high school program. Using 
this data element, Education predicted a certain percentage of students 
that would likely qualify for an AC Grant. To project the number of 
students eligible for SMART Grants, Education also used data from the 
National Center for Education Statistics, including the number of 
students who were currently enrolled in SMART-eligible majors and their 
GPAs. 

AC and SMART Grant Eligibility Requirements: 

To be eligible for an AC or SMART Grant, a student must qualify for a 
Federal Pell Grant and meet additional specific criteria (see table 2). 
Eligible AC Grant students can receive up to $750 in their first year 
of college and up to $1,300 in their second year. The SMART Grant 
program awards up to $4,000 in each year to eligible third-and fourth- 
year students who are majoring in science (physical, life, or 
computer); technology; engineering; mathematics; or certain foreign 
languages considered critical to the national security of the United 
States. 

Table 2: Current Statutory Eligibility Requirements for AC and SMART 
Grant Programs: 

Statutory eligibility requirements: Eligible for a Pell Grant; 
AC Grants: [Check]; 
SMART Grants: [Check]. 

Statutory eligibility requirements: United States citizen; 
AC Grants: [Check]; 
SMART Grants: [Check]. 

Statutory eligibility requirements: Full-time student; 
AC Grants: [Check]; 
SMART Grants: [Check]. 

Statutory eligibility requirements: Enrolled or accepted for enrollment 
in the first or second academic year of an undergraduate program at a 2-
or 4-year degree-granting institution; 
AC Grants: [Check]; 
SMART Grants: [Empty]. 

Statutory eligibility requirements: First-year students must have 
completed after January 1, 2006, a rigorous secondary school program of 
study; 
AC Grants: [Check]; 
SMART Grants: [Empty]. 

Statutory eligibility requirements: Second-year students must have 
completed after January 1, 2005, a rigorous secondary school program of 
study; 
AC Grants: [Check]; 
SMART Grants: [Empty]. 

Statutory eligibility requirements: Completion of a rigorous secondary 
school program of study; 
AC Grants: [Check]; 
SMART Grants: [Empty]. 

Statutory eligibility requirements: A second-year student must have 
obtained a cumulative GPA of at least 3.0 or the equivalent at the end 
of the first academic year; 
AC Grants: [Check]; 
SMART Grants: [Empty]. 

Statutory eligibility requirements: Enrolled or accepted for enrollment 
in the third or fourth academic year of an undergraduate program at a 4-
year degree-granting institution; 
AC Grants: [Empty]; 
SMART Grants: [Check]. 

Statutory eligibility requirements: Pursuing a major in; 
* science (physical, life, and computer science); 
* technology; 
* engineering; 
* mathematics; 
* a critical foreign language[A]; 
AC Grants: [Empty]; 
SMART Grants: [Check]. 

Statutory eligibility requirements: Third-or fourth-year student has 
obtained a cumulative GPA average of at least 3.0 or the equivalent in 
the coursework required for the student's major; 
AC Grants: [Empty]; 
SMART Grants: [Check]. 

Statutory eligibility requirements: Take at least one course in the 
student's SMART-eligible major each payment period[B]; 
AC Grants: [Empty]; 
SMART Grants: [Check]. 

Source: GAO analysis of legislation and Education's guidance. 

[A] The Secretary of Education develops a list of critical foreign 
languages in consultation with the Director of National Intelligence 
that includes Arabic, Chinese, Iranian/Persian, Russian, and other 
languages considered critical to the national security of the United 
States. 

[B] This requirement is not statutory; it is based on guidance provided 
by Education. Throughout the report, the term "semester" will be used 
as a substitution for "payment period." 

[End of table] 

Rigorous Program of Study for AC Grants: 

A key requirement of the AC Grant program is that students complete a 
rigorous high school program of study recognized by the Secretary of 
Education. Although the statute requires a rigorous program of study, 
Education has the flexibility to define this requirement.[Footnote 7] 
In implementing the grant programs, the Secretary designated the 
following four ways for students to satisfy this requirement: 

1. Participating in the State Scholars Initiative (SSI). To achieve 
recognition, students in participating states must complete all state- 
mandated high school graduation requirements, as well as the following 
coursework: 4 years of English; 3 years of mathematics (including 
algebra I, algebra II, and geometry); 3 years of laboratory science 
(biology, chemistry, and physics); 3.5 years of social studies (chosen 
from U.S. and world history, world geography, economics, and 
government); and 2 years of a language other than English. 

2. Completing a curriculum similar to the SSI. The requirements of this 
option are slightly less demanding than those of the SSI, with more 
flexibility in meeting the mathematics, science, and social science 
requirements, and a reduced language requirement. 

3. Completing an existing advanced, honors, or other approved program. 
In most cases, the approved programs are unique to a state. 

4. Completing at least two Advanced Placement (AP) or International 
Baccalaureate (IB) courses. Students must receive a test score of 3.0 
or higher (out of 5.0) on the AP exam or 4.0 or higher (out of 7.0) on 
the IB exam. 

Of these options, the first three require checking the students' high 
school transcripts, and the fourth requires obtaining students' scores 
on AP and IB exams. 

Grant Application Process: 

Students who are potentially eligible for an AC Grant award begin the 
grant application process by submitting the Free Application for 
Federal Student Aid (FAFSA) to Education. Paper filers receive a 
comment on their Student Aid Report directing them to answer additional 
questions regarding their eligibility--specifically, whether they 
completed a rigorous high school program of study--either online or by 
calling the Federal Student Aid Information Center. Students using 
FAFSA online, representing over 95 percent of total application volume, 
[Footnote 8] are given the opportunity to respond to these questions at 
the time they file. If it appears the applicant might qualify for an AC 
Grant, Education notifies the colleges listed on their FAFSA. The 
colleges must then obtain and review documentation to support the 
student's statements. For SMART Grants, financial aid offices primarily 
rely on queries of student databases to identify Pell recipients that 
may be eligible for a SMART Grant. Other eligibility requirements, such 
as verifying a student's major and GPA, are determined using existing 
student databases. 

Eligibility Requirements and a Short Implementation Time Line Affected 
Overall Participation, Which Varied among States and Colleges: 

Certain eligibility requirements affected overall student participation 
in the AC and SMART Grant programs. Unlike most other federal student 
aid programs, these grants require students to be both Pell-eligible 
and to meet specified merit criteria. However, according to financial 
aid administrators, the merit-based criteria posed the greatest barrier 
to students. Additionally, a short implementation time line affected 
some colleges' efforts to identify eligible students, resulting in 
delayed grant awards to some students. Although these factors affected 
participation rates overall, rates varied among states and colleges 
depending on their characteristics. However, recent legislative changes 
that will broaden eligibility are expected to increase student 
participation. 

Several Eligibility Requirements Affected Student Participation: 

Student participation in the AC and SMART Grant programs was affected 
by several eligibility requirements, including academic merit, U.S. 
citizenship, and full-time enrollment. Unlike the requirements for most 
other federal financial aid programs, to be eligible for AC and SMART 
Grants, students must demonstrate both financial need and academic 
merit. According to a recent report issued by Education, the merit- 
based eligibility requirements represent a shift in federal aid policy 
from the purely need-based standards used in most other Title IV 
programs.[Footnote 9] 

For AC Grants, the majority of state officials and financial aid 
administrators we interviewed considered the merit-based eligibility 
requirements to be the most difficult for students to meet. 
Specifically, as shown in figure 1, maintaining a 3.0 GPA was the most 
prevalent barrier, cited by administrators at 29 of the 42 colleges we 
interviewed. As a result, many students became ineligible for a second- 
year AC Grant. For example, at one college we visited, about 90 percent 
of first-year AC Grant recipients lost eligibility for the second year 
of funding because they failed to maintain a 3.0 GPA. The second most 
common barrier, cited by administrators at 27 of the 42 colleges we 
interviewed, was completion of a rigorous high school curriculum. One 
reason for this, according to some administrators, is that Pell- 
eligible students do not always have access to or may be less likely 
than other students to enroll in rigorous programs in high school. 

Beyond the academic merit components of the AC Grant eligibility 
requirements, several others were difficult for students to meet and 
affected participation. Administrators at about half of the colleges we 
interviewed said the requirement to have graduated from high school 
after January 1, 2006, for first-year recipients and January 1, 2005, 
for second-year recipients impacted participation by disqualifying 
students (such as older students) who are not recent high school 
graduates. Administrators at about half of the colleges we interviewed 
also noted that requiring U.S. citizenship disqualified some students, 
particularly at colleges with large noncitizen, permanent resident 
populations who were eligible for other federal student aid programs. 
Likewise, the requirement to be enrolled full-time disqualified some 
students. One administrator noted that Pell Grant recipients may be 
more likely than others to work while attending college, necessitating 
enrollment on a part-time rather than a full-time basis. A recent 
report issued by Education also noted that low-income students 
sometimes have to work while also attending college, which could result 
in part-time enrollment.[Footnote 10] 

Figure 1: Number of Colleges Reporting AC Grant Requirements as 
Barriers to Student Participation: 

[Refer to PDF for image: horizontal bar graph] 

Eligibility requirement: If a second-year student, has obtained a 
cumulative GPA of at least 3.0 or the equivalent at the end of the 
first academic year; 
Number reporting requirement impacted participation: 29. 

Eligibility requirement: Complete a rigorous high school program of 
study, as recognized by the Secretary; 
Number reporting requirement impacted participation: 27. 

Eligibility requirement: United States citizen; 
Number reporting requirement impacted participation: 21. 

Eligibility requirement: Second-year students must have completed high 
school after January 1, 2005; 
Number reporting requirement impacted participation: 21. 

Eligibility requirement: First-year students must have completed high 
school after January 1, 2006; 
Number reporting requirement impacted participation: 19. 

Eligibility requirement: Full-time student, 
Number reporting requirement impacted participation: 16. 

Eligibility requirement: Eligible for a Pell Grant; 
Number reporting requirement impacted participation: 15. 

Eligibility requirement: Enrolled or accepted for enrollment in the 
first or second academic year of an undergraduate program at a 2- or 4-
year degree-granting college; 
Number reporting requirement impacted participation: 12. 

Source: GAO interviews with financial aid administrators at 42 
colleges. 

[End of figure] 

Among SMART Grant requirements, Education's requirement of enrollment 
in at least one course each semester in the student's SMART-eligible 
major was the most frequently mentioned barrier for students to meet 
and was cited by administrators at 11 of the 25 4-year colleges we 
interviewed (see figure 2). In some cases, students who completed all 
required courses in their SMART-eligible major prior to their senior 
year became ineligible because they were taking electives unrelated to 
their major. Although maintaining a 3.0 GPA and being a U.S. citizen 
did not seem to be as problematic for SMART recipients, these 
requirements tied as the second most frequently mentioned barrier 
affecting participation, with administrators at 9 of 25 colleges citing 
them. 

Figure 2: Number of Colleges Reporting SMART Grant Requirements as 
Barriers to Student Participation: 

[Refer to PDF for image: horizontal bar graph] 

Eligibility requirement: Take one course in the student's SMART-
eligible major each semester; 
Number reporting requirement impacted participation: 11. 

Eligibility requirement: United States citizen; 
Number reporting requirement impacted participation: 9. 

Eligibility requirement: If third- or fourth-year student, has obtained 
a cumulative GPA of at least 3.0 or the equivalent in the coursework 
required for the student's major; 
Number reporting requirement impacted participation: 9. 

Eligibility requirement: Pursuing a major in: mathematics; science; 
technology; engineering or a critical foreign language; 
Number reporting requirement impacted participation: 8. 

Eligibility requirement: Eligible for a Pell Grant; 
Number reporting requirement impacted participation: 4. 

Eligibility requirement: Enrolled or accepted for enrollment in the 
third or fourth academic year of a program at a 4-year degree-granting 
college; 
Number reporting requirement impacted participation: 4. 

Eligibility requirement: Full-time student; 
Number reporting requirement impacted participation: 3. 

Source: GAO interviews with financial aid administrators at 25 4-year 
colleges. 

[End of figure] 

Legislation enacted in May 2008 will expand AC and SMART Grant 
eligibility to include eligible students who are noncitizens and 
students attending college part-time (see table 3). In addition, 
certain students in certificate programs[Footnote 11] lasting a year or 
more at a degree-granting college will be eligible for AC Grants. Also, 
states, instead of Education, will be responsible for determining what 
constitutes a rigorous high school program of study. Some of the 
administrators we spoke with speculated that the number of AC and SMART 
Grant recipients would increase as a result of the revised eligibility 
requirements. Several administrators from 2-year colleges, such as 
community colleges, commented that their students, in particular, would 
benefit from the revised eligibility requirements. A few financial aid 
administrators at colleges with a substantial number of noncitizen, 
permanent residents in their student body, such as one college in 
Arizona that we visited, expected that eliminating the U.S. citizenship 
requirement would directly contribute to an increase in the number of 
grants they award. 

Table 3: Recent Legislative Changes Amending Eligibility Requirements 
for AC and SMART Grant Programs: 

Requirements for AC and SMART Grants: 

Statutory eligibility requirements: Eligible for a Pell Grant; 
Legislative changes to take effect July 1, 2009: No change. 

Statutory eligibility requirements: United States citizen; 
Legislative changes to take effect July 1, 2009: The requirement that 
the student must be a U.S. citizen will be removed. 

Statutory eligibility requirements: Full-time student; 
Legislative changes to take effect July 1, 2009: Eligibility will be 
expanded to include students enrolled or accepted for enrollment on at 
least a half-time basis. 

Additional Requirements for AC Grants: 

Statutory eligibility requirements: Enrolled or accepted for enrollment 
in the first or second academic year of an undergraduate program at a 2-
or 4-year degree-granting institution; 
Legislative changes to take effect July 1, 2009: (1) "Academic year" 
will be changed to "year." (2) Eligibility will be expanded to include 
first-year students enrolled in certificate programs of at least 1 
year, and second-year students enrolled in certificate programs of at 
least 2 years, at degree-granting institutions. 

Statutory eligibility requirements: First-year students must have 
completed, after January 1, 2006, a rigorous secondary school program 
of study; 
Legislative changes to take effect July 1, 2009: While the general 
requirement of a rigorous program will remain, some of the details will 
be changed (see below). 

Statutory eligibility requirements: Second-year students must have 
completed, after January 1, 2005, a rigorous secondary school program 
of study; 
Legislative changes to take effect July 1, 2009: No change. 

Statutory eligibility requirements: Completion of a rigorous secondary 
school program of study; 
Legislative changes to take effect July 1, 2009: Under current law, for 
students who complete the rigorous program before July 1, 2009, such 
programs must be recognized by the Secretary. After the amendment, for 
this same group of students, the programs must simply be recognized by 
a designated state official and reported to the Secretary. 

Statutory eligibility requirements: A second-year student must have 
obtained a cumulative GPA of at least 3.0 or the equivalent at the end 
of the first academic year; 
Legislative changes to take effect July 1, 2009: No change. 

Additional Requirements for SMART Grants: 

Statutory eligibility requirements: Enrolled or accepted for enrollment 
in the third or fourth academic year of an undergraduate program at a 4-
year degree-granting institution; 
Legislative changes to take effect July 1, 2009: (1) "Academic year" 
will be changed to "year."; (2) Will add an additional year of SMART 
eligibility for students in the fifth year of a certified 5-year 
program. 

Statutory eligibility requirements: Pursuing a major in; 
* science (physical, life, and computer science); 
* technology; 
* engineering; 
* mathematics; 
* a critical foreign language; 
Legislative changes to take effect July 1, 2009: (1) Current law 
requires that students be "pursuing a major" that is SMART-eligible; 
the new amendment will require that students be "certified by the 
institution to be pursuing" such a major. (2) Language referring to 
"critical foreign language" will be simplified. (3) A separate possible 
set of eligibility requirements will be added for certain third-and 
fourth-year students who are not permitted (in their curriculum) to 
declare a major, which can be met instead of the current requirement. 

Statutory eligibility requirements: Third-or fourth-year student has 
obtained a cumulative GPA of at least 3.0 or the equivalent in the 
coursework required for the student's major; 
Legislative changes to take effect July 1, 2009: No change. 

Statutory eligibility requirements: Take at least one course in the 
student's SMART-eligible major each payment period[A]; 
Legislative changes to take effect July 1, 2009: No change. 

Source: GAO analysis of legislation and Education's guidance. 

[A] This requirement is not statutory; it is based on guidance provided 
by Education. 

[End of table] 

A Short Implementation Time Line Impeded Some Colleges' Ability to 
Identify Eligible Students and Delayed Grant Awards: 

Another factor that limited participation in both grant programs was a 
relatively short implementation time line that precluded many colleges 
from identifying potentially eligible students and resulted in delayed 
awards to some students. Although Education was able to issue Interim 
Final Regulations just 5 months after the enactment of the authorizing 
legislation (as shown in table 4), much quicker than for previous 
federal student aid programs, college administrators we interviewed 
still found the condensed time line challenging. 

Table 4: Time Line for Initial Year of AC and SMART Grant Programs, 
Academic Year 2006-2007: 

Date: February 8, 2006; 
Key event: Legislation authorizing grant programs enacted. 

Date: April 5, 2006; 
Key event: Education introduced the programs to colleges and explained 
process for administering grants. 

Date: May 2, 2006; 
Key event: Education introduced the programs to states, announced 
guidelines on how students become eligible for the grants, and 
explained details related to the rigorous high school program of study 
(AC) and specific major requirements (SMART). 

Date: June 1, 2006; 
Key event: Deadline for states to establish and submit to the Secretary 
of Education alternative rigorous high school programs of study. 

Date: July 3, 2006; 
Key event: Interim final regulations issued, effective for academic 
year 2006-2007. 

Date: July-August 17, 2006; 
Key event: Comment period on interim final regulations. 

Date: November 1, 2006; 
Key event: Interim final regulations adopted as final. 

Source: U.S. Department of Education, Academic Competitiveness and 
National SMART Grant Programs: First-Year Lessons Learned. 

[End of table] 

Colleges that offered an eligible program and participated in the Pell 
Grant program were required to award these grants for the 2006-2007 
academic year, which began in September 2006. Within this time frame, 
colleges had to develop new processes and procedures for identifying 
students and verifying their eligibility, but some colleges may not 
have been able to identify all eligible students based on the FAFSA. 
According to Education, colleges are required to review AC Grant 
eligibility for students who self-identify on the FAFSA that they are 
potentially AC Grant-eligible based on citizenship status, high school 
graduation date, family income, and responses to questions about high 
school courses taken. However, legislation for the grant programs was 
enacted in February 2006, after students had already begun filing their 
FAFSA applications for the 2006-2007 academic year. Furthermore, 
Education did not add questions addressing rigorous high school courses 
to the FAFSA until July 2006. Although Education attempted to notify 
students who had already completed the FAFSA that they might be 
eligible for the AC Grant, some potentially eligible students who did 
not go back and self-certify may have been missed by colleges. 

To quickly implement the AC and SMART Grant programs, Education issued 
interim final regulations in July 2006. However, a few administrators 
noted that some colleges waited until the regulations were adopted as 
final in November 2006 to make grant awards, which may have resulted in 
delayed awards to some students. For example, one administrator said 
that because Education's guidance changed frequently and was somewhat 
unclear, the college was hesitant to administer the program until 
regulations were finalized. 

Differences in States' High School Curricula and Some College 
Characteristics Could Explain Varying Participation Rates: 

While participation was lower than expected, some of the state 
officials and financial aid administrators we interviewed believe that 
the varied rate of participation among states and colleges could be 
partly due to their different characteristics. The state 
characteristics mentioned by some of the state officials and 
administrators we interviewed included the following: 

* Rigorous curriculum. Access to rigorous curriculum differs among 
states and even within some states. For example, a state official in 
Arizona, which had a relatively low AC Grant participation rate, 
mentioned that some students in rural parts of the state may not have 
opportunities to take rigorous curricula. 

* Promotion of rigor. Many of the state officials we interviewed 
reported that the efforts states are taking to promote rigor in high 
schools could impact AC Grant participation rates. Ten of 12 state 
officials described specific state efforts to increase rigor, ranging 
from the development of core curriculum and graduation requirements to 
increasing access to AP courses. 

* Graduation requirements. A few state officials reported that high 
school graduation requirements could impact AC participation rates. For 
example, one state official in Michigan, which had a relatively low AC 
Grant participation rate, explained that the state only recently 
implemented a core curriculum high school graduation requirement in an 
attempt to increase the rigor of high school curricula. In contrast, 
Massachusetts, which had a relatively high AC participation rate, 
already requires students to pass a rigorous standardized test to 
graduate from high school. State officials noted that this makes it 
more likely a student from Massachusetts would meet the AC Grant rigor 
requirement, compared to students from other states. 

* Collaboration between state agencies. The amount of collaboration 
between state education agencies that oversee secondary and 
postsecondary education could impact AC Grant participation rates. For 
example, a state official in Massachusetts noted that the state 
Department of Elementary and Secondary Education and Board of Higher 
Education work collaboratively, which could have positively impacted 
participation rates. 

* Efforts to increase awareness. The degree to which states are making 
efforts to increase awareness of the AC and SMART Grant programs could 
impact participation rates. For example, some states with ongoing 
efforts to inform high schools and students of the AC Grant program and 
related eligibility requirements, like Rhode Island, which has a 
relatively high AC participation rate, had higher participation rates. 
Further, officials in some states also mentioned ongoing efforts to 
promote SMART Grants and inform high school students about science, 
technology, engineering, and mathematics (STEM) fields to increase the 
likelihood that these fields are chosen in college. For example, in 
Utah, which has a relatively high SMART Grant participation rate, one 
state official noted that several STEM centers have been created to 
help promote these fields to high school students. 

* Student characteristics. The characteristics of students who attend 
colleges within a state could impact AC and SMART Grant participation 
rates. For example, in Utah, which had a relatively low AC Grant 
participation rate, some state officials and administrators explained 
that male students often go on 2-year religious missions at the age of 
19 and enroll in college upon their return. Many of these students will 
not meet the AC Grant high school graduation date requirement, which 
could result in lower AC Grant participation rates at Utah colleges 
compared to colleges in other states. As another example, one 
administrator noted that participation rates for Arizona, which were 
relatively low for both AC and SMART Grant awards, could have been 
affected by the many students attending college part-time because they 
cannot afford to attend college full-time. 

The college characteristics mentioned by some of the state officials 
and administrators we interviewed included the following: 

* Type (2-or 4-year). Several administrators explained that students at 
community colleges are often older and attend part-time, so they would 
not meet the AC Grant high school graduation date or full-time 
enrollment requirements--a finding that is echoed in a recently issued 
Education report.[Footnote 12] 

* Admission policies. As one administrator noted, students at colleges 
with admission requirements that match the AC Grant rigor requirement 
might be more likely to receive a grant. For example, one state 
official in Rhode Island noted that the State Scholars program and AC 
Grant rigor requirements align with the admission requirements of some 
Rhode Island colleges. In contrast, another administrator noted that 
colleges with open admission policies are likely to attract students 
who are less likely to have completed a rigorous course of study in 
high school. 

* Identification of eligible students. Although, according to 
Education, colleges are required to review only students who self-
certify on the FAFSA as being potentially AC Grant-eligible, some 
administrators noted that colleges are likely to miss other eligible 
Pell recipients if administrators do not review all Pell recipients for 
eligibility. For example, one administrator explained that her college 
was able to identify many more AC-eligible students by running a query 
on the student database to review all students for eligibility, as 
opposed to only reviewing eligibility for students who self-identify on 
the FAFSA as potentially AC Grant-eligible. 

* Availability of SMART majors and courses. The availability of SMART- 
eligible majors at colleges and the availability of major courses each 
semester could impact SMART Grant participation rates. For example, an 
administrator at a college in Utah attributed the relatively high SMART 
Grant participation rate at that college to the fact that all of the 
major programs of study offered by the college were SMART-eligible. 

Administrators Reported That Certain Eligibility Requirements Were 
Challenging to Verify: 

Most financial aid administrators we spoke to said that certain 
eligibility requirements for both grant programs were challenging to 
verify and required a combination of manual and automated processes. 
While eligibility verification processes varied, they generally 
involved running database queries and using eligibility checklists. At 
some colleges, verifying student eligibility required additional 
effort, such as having to obtain additional student information and 
involving other departments in the verification process. Several 
administrators noted that the grant programs increased their workload, 
but additional staff were generally not hired to help administer them. 
However, some administrators reported working extra hours or 
redistributing some of their responsibilities to other staff members. 

For AC Grants, the eligibility requirement most difficult for the 
administrators to verify--cited by administrators at 35 of the 42 
colleges we interviewed (see figure 3)--was if a student completed a 
rigorous program of study in high school. Because students could have 
met this requirement by completing a number of recognized rigorous high 
school programs of study, administrators had to be familiar with and 
potentially check all of the rigorous programs associated with the 
state in which the student attended high school.[Footnote 13] Verifying 
that a student completed a rigorous program of study usually required 
that administrators review the student's high school transcript to 
ensure the required courses were taken. Administrators at 31 colleges 
we interviewed mentioned that this was either a manual or time- 
consuming process. Two administrators added that transcripts were 
difficult to interpret since they are not uniformly formatted and 
course titles are sometimes abbreviated. As a result, they had to 
contact high schools to clarify courses listed on the transcripts. Some 
administrators told us that they found opportunities to exchange 
information with other colleges helpful in administering the grant 
programs. Two administrators commented that additional in-person 
workshops hosted by Education would provide colleges with a good venue 
to share best practices. For example, Texas and Florida annotate 
students' high school transcripts if they have completed a rigorous 
program of study.[Footnote 14] In Georgia, all colleges are given a 
list of students who complete the Hope Scholars program, which meets 
the AC Grant rigor requirement. Also, state officials in Rhode Island 
told us about their plans to designate high school diplomas with a seal 
indicating that students completed a program with a certain level of 
rigor. A few administrators we spoke with suggested that Education 
could ease the difficulty faced by colleges by encouraging states to 
indicate on high school transcripts if a student completed a rigorous 
program of study, or by having each state provide colleges with a list 
of students who completed a rigorous program. While the process of 
reviewing transcripts was generally reported as challenging, not all 
colleges experienced difficulty. A few colleges said that verifying 
rigor was fairly straightforward, since their admission requirements 
closely aligned with one of the accepted rigorous programs of study for 
the AC Grant. 

Figure 3: Number of Colleges Reporting AC Grant Requirements as 
Challenging to Verify: 

[Refer to PDF for image: horizontal bar graph] 

Eligibility requirement: Complete a rigorous high school program of 
study, as recognized by the Secretary; 
Number reporting requirement was challenging to verify: 35. 

Eligibility requirement: Enrolled or accepted for enrollment in the 
first or second academic year of a program at a 2- or 4-year degree-
granting college; 
Number reporting requirement was challenging to verify: 25. 

Eligibility requirement: First-year students must have completed high 
school after January 1, 2006; 
Number reporting requirement was challenging to verify: 6. 

Eligibility requirement: If a second-year student, has obtained a 
cumulative GPA of at least 3.0 or the equivalent at the end of the 
first academic year; 
Number reporting requirement was challenging to verify: 6. 

Eligibility requirement: Second-year students must have completed high 
school after January 1, 2005; 
Number reporting requirement was challenging to verify: 5. 

Eligibility requirement: United States citizen; 
Number reporting requirement was challenging to verify: 3. 

Eligibility requirement: Full-time student; 
Number reporting requirement was challenging to verify: 1. 

Eligibility requirement: Eligible for a Pell Grant; 
Number reporting requirement was challenging to verify: 0. 

Source: GAO interviews with financial aid administrators at 42 
colleges. 

[End of figure] 

In addition to manually reviewing transcripts, some of the other 
challenges colleges encountered in verifying the rigor requirement 
included obtaining final high school transcripts, adopting new 
administrative responsibilities, and coordinating with other 
departments. Administrators at several colleges, particularly community 
colleges, said that they had to obtain high school transcripts for 
students who were potentially eligible for the AC Grant because the 
college does not regularly require that students submit them. Further, 
many colleges we interviewed reported that financial aid personnel were 
responsible for reviewing transcripts--an uncommon task for their 
department. However, at many colleges, financial aid administrators 
relied on other departments, often the admissions office, to review 
transcripts. In such situations, new collaborative working 
relationships had to be established and high levels of coordination 
maintained. 

While administrators we interviewed reported that the SMART Grant 
program was generally easier to administer than the AC Grant program, 
many still found certain SMART requirements challenging to verify. 
Administrators at 13 of the 25 colleges we interviewed about SMART 
Grants found it difficult to verify that grant recipients were taking 
one course in their SMART-eligible major course of study each semester 
(see fig. 4). The regulations simply state that students must enroll in 
the courses necessary to complete the degree program and to fulfill the 
requirements for their SMART-eligible major. However, guidance from 
Education stipulated that students could receive a SMART Grant only if 
they were enrolled in at least one course that met the requirements of 
their SMART-eligible major. Some administrators we interviewed told us 
that verifying enrollment in specific courses entailed a manual review 
of student's schedules and, in some instances, required coordination 
with other departments, such as the registrar's office. Administrators 
at one college we interviewed suggested that this requirement be 
revised so satisfactory academic progress toward a degree in a SMART-
eligible major would be acceptable, a standard similar to a Pell Grant 
program's requirement. 

Figure 4: Number of Colleges Reporting SMART Grant Requirements as 
Challenging to Verify: 

[Refer to PDF for image: horizontal bar graph] 

Eligibility requirement: Enrolled or accepted for enrollment in the 
third or fourth academic year of a program at a 4-year degree-granting 
college; 
Number reporting requirement was challenging to verify: 15. 

Eligibility requirement: Take one course in the student's SMART-
eligible major each semester; 
Number reporting requirement was challenging to verify: 13. 

Eligibility requirement: If third- or fourth-year student, has obtained 
a cumulative GPA of at least 3.0 or the equivalent in the coursework 
required for the student's major; 
Number reporting requirement was challenging to verify: 4. 

Eligibility requirement: United States citizen; 
Number reporting requirement was challenging to verify: 3. 

Eligibility requirement: Pursuing a major in: mathematics; science; 
technology; engineering; or a critical foreign language; 
Number reporting requirement was challenging to verify: 2. 

Eligibility requirement: Full-time student; 
Number reporting requirement was challenging to verify: 0. 

Eligibility requirement: Eligible for a Pell Grant; 
Number reporting requirement was challenging to verify: 0. 

Source: GAO interviews with financial aid administrators at 25 
colleges. 

[End of figure] 

In addition, for both the AC and SMART Grant programs, verifying the 
requirement that students be enrolled in a certain academic year at a 
degree-granting college was challenging, according to administrators, 
because it was difficult to determine which academic year a student was 
considered under the grant programs' regulations. According to 
Education's regulations, progression from one academic year to the next 
generally depends on both the number of credit hours and weeks of 
instructional time a student received. Because "academic year" under 
the AC and SMART Grant programs is used differently than for some other 
federal student aid programs, some administrators reportedly found it 
confusing to implement. In addition, several administrators reported 
that determining academic year was a manual process and was 
particularly difficult for students who had earned college credit prior 
to enrolling, such as through AP testing or by previously attending 
college. 

Recent legislative changes to the AC and SMART Grant programs will 
modify several eligibility requirements. Some of the changes may 
benefit college administrators, such as changing (in many instances) 
the use of the phrase "academic year" to the word "year." According to 
Education officials, this change will allow colleges to use their own 
standards for determining a student's grade level progression. However, 
the eligibility changes are unlikely to address colleges' most 
difficult task of verifying rigor, since students can continue to meet 
this AC Grant requirement by completing one of several rigorous 
programs, most of which require a review of students' high school 
transcripts. Further, some of the administrators we spoke with 
anticipate that the number of grant awards--and consequently their 
workload--will increase. Until Education issues regulations and 
guidance that will help administrators implement the changes, it is 
premature to suggest exactly how colleges will be affected. Education 
officials told us they have drafted the new regulations, which will 
take effect on July 1, 2009. 

Education Provided Assistance Primarily to Colleges, but Efforts to 
Promote the Grant Programs to States and High Schools Have Been 
Limited: 

Figure 11: Overall, colleges found Education's guidance and training 
helpful, but some financial aid administrators would like additional 
assistance. Additionally, state officials, administrators, and school 
counselor association representatives reported that Education's efforts 
to promote awareness of the grants were limited. While Education's goal 
is to double participation in the grant programs by the 2010-2011 
academic year, from the number of grants awarded for the 2006-2007 
academic year, the agency currently has no plans to promote further 
awareness of the grants at the high school level. 

Colleges Found Education's Guidance and Training Helpful, and Would 
Like Ongoing Assistance: 

Overall, financial aid administrators we interviewed found Education's 
guidance and training useful and responsive to their needs, and some 
administrators indicated they would like continued assistance. 
Education's guidance included a series of instructional letters that 
were posted to the agency's IFAP Web site, which according to 
Education, financial aid administrators are required to use and monitor 
for updates. Between 2006 and 2008, Education issued at least 15 
letters with specific implementation guidance for these grant programs. 
For example, one letter issued in May 2006 detailed the ways high 
school students can meet the rigor requirement for an AC Grant, and 
another provided a list of SMART-eligible majors. A letter posted in 
October 2006 provided guidance to determine a student's academic year 
for both grant programs. 

Since June 2006, Education has offered a number of training 
opportunities related to the AC and SMART Grant programs, primarily for 
financial aid administrators.[Footnote 15] Training provided by 
Education on the AC and SMART Grant programs included live instructor- 
led sessions on the Internet (Webinars), as well as workshops and 
conference presentations. Information presented at these sessions 
ranged from general to specific information about verifying eligibility 
for both programs, including defining a student's academic year; 
reviewing eligibility for transfer students; verifying that students 
meet the AC Grant rigor requirement; and determining that a student is 
enrolled in a SMART-eligible major. In addition, Education has provided 
ongoing Web training for financial aid administrators, accessible 
anytime through Education's IFAP Web site. Education officials also 
noted that 23 regional training officers[Footnote 16] are available to 
help administrators implement federal student aid programs, including 
the AC and SMART Grant programs, and some of the administrators we 
interviewed mentioned that their regional Education contacts were 
particularly helpful answering questions about these grants. 

A few financial aid administrators noted that Education's assistance 
has dropped off over time, and several administrators expressed a 
desire for ongoing guidance and training for both programs. A few 
administrators also said they would have benefited from more targeted 
training opportunities. For example, one administrator from a 2-year 
college said it would be useful to receive targeted training for the 
unique challenges facing 2-year colleges. Such challenges include the 
number of part-time students and open enrollment policies. 
Additionally, some of the administrators noted that although the IFAP 
Web site contains much information about AC and SMART Grants, a better 
search engine and organizational structure would make it less difficult 
to find specific pieces of information. Two administrators suggested 
that Education provide explicit notification to administrators when 
revised regulations are posted to the IFAP Web site. Education 
officials stated that they recently updated the IFAP Web site, which 
should make it easier to search for specific information, including 
information relevant to the AC and SMART Grant programs. 

Education's Efforts to Promote the Grants to States and High Schools 
Were Limited: 

The AC Grant program was designed to encourage high school students to 
take rigorous curricula in high school, thus making it more likely that 
they will be successful in college. To meet the AC Grant rigor 
requirement, students need to be aware of the course requirements for 
completing a rigorous high school program of study. However, some state 
officials reported that additional outreach from Education to increase 
awareness of the grant programs at the state level is necessary. Some 
financial aid administrators and representatives from one school 
counselor association also reported that they would like Education to 
conduct additional outreach to promote awareness of the grants to high 
schools and students. We found that Education's initial contact with 
state educational agencies about these grant programs was limited to 
informing states about the grants and requesting information on each 
state's rigorous curriculum to determine whether it met Education's 
definition of a rigorous high school program of study. This 
notification consisted of one letter from the Secretary of Education 
introducing the programs to states and detailing the grant eligibility 
requirements and a conference call with state officials designed to 
describe the grant programs.[Footnote 17] 

Officials at 7 of the 12 state agencies we interviewed reported that 
they were asked to provide information on their state's rigorous 
curriculum to Education to determine whether it met the definition of a 
rigorous program of study for the AC Grant program. However, only a few 
state agencies reported that they were provided with information about 
the grant programs or given promotional materials to share with high 
schools and students. Nevertheless, officials from three of the states 
we interviewed reported that their states were taking steps to promote 
the grant programs to schools or described deliberate efforts by the 
state to promote the AC or SMART Grant programs. Beyond general 
information listed on state education department Web sites and shared 
with districts about the rigor requirement, only a few officials were 
able to describe specific ways in which states reached out to high 
schools. Some examples of state efforts to inform high schools about 
the grant programs include: 

* communicating with school districts about the AC Grant through a 
monthly e-mail message and sharing information on the AC Grant 
eligibility requirements with all school counselors in middle and high 
schools across the state; 

* sharing information on state initiatives, including any related to 
the AC Grants, across districts and hosting sessions on the AC Grant in 
collaboration with a school counselor association; 

* discussing AC and SMART Grants during training for high school 
counselors; and: 

* having school liaisons distribute information on the grant programs 
to schools and send notification letters about the programs to school 
principals and superintendents. 

Similar to Education's outreach to states to promote the grant 
programs, the agency's efforts to promote the grant programs at the 
high school level were also limited. The training Education provided 
consisted of one national training session, some state sessions, and 
information about the AC and SMART Grant programs posted to Education's 
Web site for high school guidance counselors. In March 2007, for 
example, Education hosted a Webinar, for which about 1,000 high school 
and TRIO[Footnote 18] counselors registered and which was advertised to 
members of several school counselor associations, to provide general 
information about the grant programs and a counselor's role in 
promoting them. In addition, basic program and eligibility information 
about these grant programs was incorporated into the National Training 
for Counselors and Mentors (NT4CM) half-day training session 
cosponsored by Education's Federal Student Aid and several counselor 
advocacy groups and was offered in 17 states during the 2007-2008 
academic year.[Footnote 19] Education also includes information on the 
grant programs in its regular student financial aid publications. 
Despite Education's efforts, representatives from one school counselor 
association we spoke with said the majority of its members know little 
about college financial aid, do not generally use Education's Web site 
resources for counselors, and consider the AC Grant program to be 
complex. Likewise, a senior official from another counselor group noted 
that its members had minimal knowledge of the grant programs until 
recently and have not received any information about the grant programs 
or associated training from Education. As noted by representatives from 
one national school counselor association and in a report recently 
issued by Education, high school counselors could play a pivotal role 
in promoting awareness of the grant programs among high school students 
while they still have the opportunity to take the courses necessary to 
qualify for the grants. 

Although some of the administrators and state officials we interviewed 
cited the importance of additional promotion to schools and students to 
increase program awareness at the high school level in order to 
increase grant participation rates at the college level, Education 
currently has no plans to conduct additional outreach at the high 
school level. Education officials stated that they were reluctant to 
promote the grants because the programs are scheduled to sunset after 
the 2010-2011 academic year and added that there was little value in 
encouraging current high school students to fulfill grant requirements 
in case the programs expired by the time the students reached college. 

Conclusions: 

The AC and SMART Grant programs were designed to encourage students to 
take rigorous courses in high school, thus making it more likely that 
they will succeed in college, and to pursue certain designated college 
majors. To that end, Education plays a key role in ensuring the grants 
are awarded to as many eligible students as possible. While both 
programs are currently scheduled to sunset after the 2010-2011 academic 
year, Education's goal is to double the number of AC and SMART Grant 
recipients by the 2010-2011 academic year, from the number awarded 
during the 2006-2007 academic year. While the revised eligibility 
requirements are likely to increase student participation, they may not 
be sufficient by themselves. Without additional outreach to promote 
awareness of the two programs to potentially eligible students, such as 
current high school juniors and seniors and Pell-eligible college 
students, the agency may not achieve its goal. 

To ensure that students know about the grants and are familiar with 
their specific eligibility requirements well before enrolling in 
college, it may be most effective to promote the grants at the high 
school level. By doing so, informed students who plan ahead and take 
rigorous coursework in high school may be eligible for an AC Grant. 
Similarly, making Pell-eligible college students aware of SMART Grant 
funding may influence their decision to major in science, technology, 
engineering, math, a critical foreign language, or other SMART-eligible 
majors. Further, recent legislative changes revising the eligibility 
requirements could help more students receive grants if they are aware 
of the specific requirements. 

College financial aid administrators we interviewed reported that the 
two grant programs are complex and difficult for them to administer. 
However, some colleges have implemented effective strategies in doing 
so. In addition, some state education agencies have taken steps to 
assist colleges in verifying the AC requirement that students complete 
a rigorous program of study. Increased opportunities to share these 
practices among the higher education community could help mitigate the 
difficulty that many colleges currently experience in verifying the 
requirements, and thereby, lessen the strain on their resources. 

Recommendations for Executive Action: 

To increase student participation in the AC and SMART Grant programs 
while minimizing the administrative challenges faced by colleges, we 
recommend that the Secretary of Education take appropriate and timely 
steps, in light of the programs' scheduled sunset in the 2010-2011 
academic year, to further assist states and colleges in implementing 
the grant programs by taking the following two actions: 

1. Develop a strategy to increase awareness of the AC and SMART Grant 
programs among states and high schools. This strategy could include 
developing promotional materials about the grant programs and 
disseminating information about actions states are taking to promote 
awareness of the grant programs. 

2. Use existing forums, such as annual financial aid conferences, to 
provide states and colleges with formal opportunities to share and 
learn about effective practices that can help mitigate some of the 
challenges of verifying the AC and SMART Grant requirements, especially 
the completion of a rigorous high school program. 

Agency Comments and Our Evaluation: 

We provided a draft of this report to officials at Education for their 
review and comment. Education's comments are reproduced in appendix IV. 
In its comments, Education concurred with our recommendation to develop 
a strategy to increase awareness of both the AC and SMART Grant 
programs by developing plans for outreach opportunities to high school 
students and for training and informational materials for counselors 
and state grant officers. Education also agreed to use existing forums, 
such as annual financial aid conferences, to allow colleges to share 
effective practices. 

We are sending copies of this report to the Secretary of Education and 
relevant congressional committees. In addition, this report will be 
available at no charge on GAO's Web site at [hyperlink, 
http://www.gao.gov]. 

If you or your staff have any questions concerning this report, please 
contact me at (202) 512-7215 or scottg@gao.gov. Contact points for our 
Offices of Congressional Relations and Public Affairs may be found on 
the last page of this report. Major contributions to this report are 
listed in appendix V. 

Signed by: 

George A. Scott: 
Director, Education, Workforce, and Income Security Issues: 

[End of section] 

Appendix I: Objectives, Scope, and Methodology: 

Our objectives were to (1) identify factors that affected student 
participation in the Academic Competitiveness (AC) and National Science 
and Mathematics Access to Retain Talent (SMART) Grant programs, (2) 
describe challenges colleges face in administering these grant 
programs, and (3) assess the extent of the Department of Education's 
(Education) efforts to assist states and colleges with implementation 
of the grant programs. 

To answer these questions, we reviewed relevant federal laws, including 
the Deficit Reduction Act of 2005, the Higher Education Opportunity 
Act, and the Ensuring Continued Access to Student Loans Act of 2008, as 
well as related regulations set forth by Education. Although many 
revised eligibility requirements for the two programs will take effect 
in July 2009, such as to include students attending part-time and those 
enrolled in certificate programs, among others, our work focused on 
implementation and participation efforts under the original eligibility 
requirements. 

We also analyzed data provided by Education on AC, SMART, and Pell 
Grant recipients and disbursements for the 2006-2007 and 2007-2008 
academic years. We determined these data to be sufficiently reliable 
for the purposes of this report by testing it for accuracy and 
completeness, reviewing documentation about the data and systems used 
to produce them, and interviewing agency officials knowledgeable about 
the data. We used these data to calculate state participation rates for 
the AC and SMART Grant programs.[Footnote 20] Based on grant data from 
academic year 2006-2007, we identified states with relatively high and 
low AC and SMART Grant participation rates.[Footnote 21] High and low 
AC and SMART participation rates were determined by states with the 10 
highest and 10 lowest participation rates. We selected seven states 
based on these grant participation rates, as well as on geographic 
location, number of colleges, and number of Pell Grants awarded. Our 
selected states were Arizona, Georgia, Massachusetts, Michigan, North 
Dakota, Rhode Island, and Utah (see fig. 5). North Dakota, 
Massachusetts, and Rhode Island had relatively high AC Grant 
participation rates, and Arizona, Michigan, and Utah had relatively low 
AC Grant participation rates. Participation rates for the SMART Grant 
program were relatively high in North Dakota, Massachusetts, and Utah 
and were relatively low in Georgia, Arizona, and Rhode Island. 

Figure 5: AC and SMART Grant Participation Rates of Selected States: 

[Refer to PDF for image: map of the United States] 

Arizona: 
Pell Grants awarded: 226,198; 
AC Grants awarded: 1,418; 
AC Grant participation rate: 0.6%; 
SMART Grants awarded: 2,342; 
SMART Grant participation rate: 1.4%. 

Georgia: 
Pell Grants awarded: 171,932; 
AC Grants awarded: 9,637; 
AC Grant participation rate: 5.6%; 
SMART Grants awarded: 1,529; 
SMART Grant participation rate: 1.6%. 

Massachusetts: 
Pell Grants awarded: 73,449; 
AC Grants awarded: 8,461; 
AC Grant participation rate: 11.5%; 
SMART Grants awarded: 1,330; 
SMART Grant participation rate: 3%. 

Michigan: 
Pell Grants awarded: 170,956; 
AC Grants awarded: 6,355; 
AC Grant participation rate: 3.7%; 
SMART Grants awarded: 2,012; 
SMART Grant participation rate: 2.1%. 

North Dakota: 
Pell Grants awarded:12,669; 
AC Grants awarded: 1,347; 
AC Grant participation rate: 10.6%; 
SMART Grants awarded: 312; 
SMART Grant participation rate: 3.1%. 

Rhode Island: 
Pell Grants awarded: 19,854; 
AC Grants awarded: 1,911; 
AC Grant participation rate: 9.6%; 
SMART Grants awarded: 172; 
SMART Grant participation rate: 1.3%. 

Utah: 
Pell Grants awarded: 54,386; 
AC Grants awarded: 742; 
AC Grant participation rate: 1.4%; 
SMART Grants awarded: 3,355; 
SMART Grant participation rate: 7.4%. 

Source: GAO analysis of 2006-2007 academic year AC, SMART, and Pell 
Grant data provided by Education. 

[End of figure] 

Within these seven states, we selected a nonprobability sample of 42 
colleges based on whether: 

* the AC and SMART Grant participation rates were high or low; 

* the college offered 2-year or 4-year degree programs; 

* the college was public, private for-profit, or private nonprofit; 
and: 

* the college was in an urban, suburban, or rural setting. 

For each state, we spoke with financial aid administrators from the 
selected colleges and with officials from key state education agencies 
to obtain information pertaining to all the three research objectives. 
(See apps. II and III for a full list of the colleges and state 
education agencies.) We conducted interviews in-person in Arizona, 
Massachusetts, Rhode Island, and Utah and by phone in Georgia, 
Michigan, and North Dakota. 

To gain a broader perspective on the grant programs, we interviewed 
representatives from four national higher education associations and 
two national associations of school counselors. These associations 
include the American Association of Collegiate Registrars and 
Admissions Staff; American Council on Education; American Association 
of Community Colleges; National Association of Student Financial Aid 
Administrators; American School Counselor Association; and National 
Association for College Admission Counseling. 

To help assess how Education assisted states and colleges with 
implementing the grant programs, we interviewed Education officials and 
reviewed relevant documentation, including correspondence sent to 
states; training presentations made to college administrators; and 
Inspector General and other relevant reports, including Education's 
report, Academic Competitiveness and SMART Grant Programs: First-Year 
Lessons Learned. 

We conducted this performance audit from April 2008 to March 2009 in 
accordance with generally accepted government auditing standards. Those 
standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings and conclusions based on our audit objectives. We believe that 
the evidence obtained provides a reasonable basis for our findings and 
conclusions based on our audit objectives. 

[End of section] 

Appendix II: Colleges Interviewed in Selected States: 

Selected state: Arizona: Colleges interviewed: 
American Indian College of the Assemblies of God.
Arizona State University.
Bryman Institute.
Glendale Community College.
Northern Arizona University.
Pima Community College.
Tohono O'odham Community College.
University of Arizona.
University of Phoenix. 

Selected state: Georgia: Colleges interviewed: 
American Intercontinental University.
Emory University.
Georgia Perimeter College.
Gwinnett College.
Mercer University.
Savannah State University.
University of Georgia.
Young Harris College. 

Selected state: Massachusetts: Colleges interviewed: 
Marian Court College.
Mount Wachusett Community College.
New England Institute of Art.
Northeastern University.
Salter College.
University of Massachusetts Amherst. 

Selected state: Michigan: Colleges interviewed: 
Baker College.
Kalamazoo Valley Community College.
Michigan State University. 

Selected state: North Dakota: Colleges interviewed: 
Jamestown College.
Minot State University.
North Dakota State College of Science.
North Dakota State University.
Rasmussen College.
United Tribes Technical College.
University of North Dakota. 

Selected state: Rhode Island: Colleges interviewed: 
Community College of Rhode Island.
Johnson & Wales University.
Rhode Island College.
University of Rhode Island. 

Selected state: Utah: Colleges interviewed: 
Brigham Young University.
Latter Day Saints Business College.
Neumont University.
Salt Lake Community College.
Utah State University. 

Source: GAO selection based on information provided by Education. 

[End of table] 

[End of section] 

Appendix III: State Education Agencies Interviewed in Selected States: 

Selected state: Arizona: State education agencies interviewed: 
Arizona Board of Regents.
Arizona Department of Education. 

Selected state: Georgia: State education agencies interviewed: 
Georgia Department of Education. 

Selected state: Massachusetts: State education agencies interviewed: 
Massachusetts Department of Higher Education.
Massachusetts Department of Elementary and Secondary Education. 

Selected state: Michigan: State education agencies interviewed: 
Michigan Department of Education. 

Selected states: North Dakota: State education agencies interviewed: 
North Dakota Department of Public Instruction.
North Dakota University System. 

Selected states: Rhode Island: State education agencies interviewed: 
Rhode Island Department of Elementary and Secondary Education.
Rhode Island Office of Higher Education. 

Selected states: Utah: State education agencies interviewed: 
Utah State Office of Education/Utah Higher Education Assistance 
Authority.
Utah System of Higher Education. 

Source: GAO identification of education agencies in selected states 
based on information provided by Education and state education 
agencies. 

[End of table] 

[End of section] 

Appendix IV: Comments from the Department of Education: 

Department of Education: 
830 First St. N.E. 
Washington, DC 20202: 

[hyperlink, http://www.FederalStudentAid.ed.gov] 
1-800-4-FED-AID: 

"Federal Student Aid: Start Here. Go Further" 

March 6, 2009: 

Mr. George Scott: 
Director, Education, Workforce, and Income Security Issues: 
Government Accountability Office: 
441 G Street, NW: 
Washington, DC 20548: 

Dear Mr. Scott: 

In accordance with 31 U.S.C. 720, I am writing to respond to 
recommendations made in the Government Accountability Office (GAO) 
report, "Federal Student Aid: Recent Changes to Eligibility 
Requirements and Additional Efforts to Promote Awareness Could Increase 
Academic Competitiveness and SMART Grant Participation" (GAO-09-343). 
This report focused on factors affecting Academic Competitiveness and 
SMART Grant participation, challenges faced by colleges in 
administering the programs, and assistance provided by the Department 
of Education to states and colleges. 

Federal Student Aid (FSA) appreciates the opportunity to respond to the 
GAO report and appreciates the need to promote awareness and to ensure 
colleges and states understand the requirements around these grants. 
Since the inception of the Academic Competitiveness and SMART Grant 
programs in 2006, the Department has sought to disseminate information 
about the programs and promote their use in meeting the educational 
expenses of low-income students. Information about these programs has 
been provided on the Department's Web sites since 2006 and has been 
included in Funding Education Beyond High School: The Guide to Federal 
Student Aid since 2007. Including information on these programs in this 
widely disseminated publication a year earlier would clearly have been 
helpful but could not be accomplished because the programs were created 
long after the Guide was published. 

In addition, the Department includes detailed information on the 
Academic Competitiveness and SMART Grant programs in the Handbook for 
Counselors and Mentors on Federal Student Aid: A Guide for Those 
Advising Students About Financial Aid for Postsecondary Education. The 
Handbook is widely used by high school guidance counselors along with 
others as they explain the financial aid programs to students and 
families. 

The Department also sponsors the National Training for Counselors and 
Mentors (NT4CM) initiative, along with the National Association of 
Student Financial Aid Administrators, the National Council of Higher 
Education Loan Programs, the National Association for College Admission 
Counseling, and the American School Counselor Association. During the 
2009-10 award year, NT4CM is expanding its reach by increasing the 
number of training sessions and participating states to advance its 
mission to provide free training, information, resources, and tools 
regarding federal, state, and local financial aid programs for 
counselors and mentors working with students and their families. 

Recommendation 1: Develop a strategy to increase awareness of the AC 
and SMART Grant programs among states and high schools. This strategy 
could include developing promotional materials about the grant programs 
and disseminating information about actions states are taking to 
promote awareness of the grant programs. 

Response: FSA concurs with this recommendation and will increase 
awareness of both the Academic Competitiveness Grant and SMART Grant 
programs by developing plans for outreach opportunities to high school 
students and for training and informational materials for counselors 
and state grant officers. 

As noted in the draft report, these programs expire after the 2010-11 
award year. This makes promotion of these programs, whether to states, 
local educational agencies, or students, problematic as we can only say 
definitively that these programs exist today and will for the next two 
years. 

Recommendation 2: Use existing forums, such as annual financial aid 
conferences, to provide states and colleges with formal opportunities 
to share and learn about effective practices that can help mitigate 
some of the challenges of verifying the AC and SMART Grant 
requirements, especially the completion of a rigorous high school 
program. 

Response: FSA will use its annual Title IV conference to allow colleges 
to share effective practices. 

Again, I appreciate the opportunity to respond to the GAO report. If 
you or your staff has any questions regarding our response, please 
contact William Leith at (202) 377-3676. 

Sincerely, 

Signed by: 

James F. Manning: 
Acting Chief Operating Officer: 

[End of section] 

Appendix V: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

George Scott, (202) 512-7215 or scottg@gao.gov: 

Staff Acknowledgments: 

Meeta Engle and Debra Prescott (Assistant Directors) and Susan Chin 
(Analyst in Charge) managed this assignment. Jennifer McDonald, Kathryn 
O'Dea, and Helen Wong made significant contributions to this report. In 
addition, Kate Van Gelder provided writing assistance, Alex Galuten and 
Doreen Feldman provided legal assistance, and Luann Moy assisted with 
the methodology. 

[End of section] 

Footnotes: 

[1] In this report, "secondary school" is used synonymously with "high 
school" unless otherwise noted. 

[2] U.S. Department of Education, National Center for Education 
Statistics, Institute of Education Sciences, The Condition of Education 
2008, NCES 2008-031 and Community Colleges: Special Supplement to the 
Condition of Education 2008, NCES 2008-033 (Washington, D.C., 2008). 

[3] The Federal Pell Grant Program provides need-based grants to low- 
income undergraduate and certain postbaccalaureate students to promote 
access to postsecondary education. Thus, students need to demonstrate 
financial need to qualify for the grants. 

[4] With the passage of the Ensuring Continued Access to Student Loans 
Act of 2008 (Pub. L. No. 110-227), as amended by the Higher Education 
Opportunity Act (Pub. L. No. 110-315), eligibility requirements for the 
programs will be amended to include, among other things, half-time and 
noncitizen students, and certain students in certificate programs 
lasting a year or more at a degree-granting institution. 

[5] Throughout the report, part-time means at least half-time. 

[6] Congress subsequently rescinded $525 million of unobligated fiscal 
year 2008 funds. In the 2009 omnibus, Congress further declared that 
$887 million of fiscal year 2009 funds are not available until October 
1, 2009. 

[7] With the passage of recent legislation, states will, as of July 1, 
2009, have increased control over designating rigorous high school 
programs of study. 

[8] U.S. Department of Education, Federal Student Aid 2008 Annual 
Report. 

[9] U.S. Department of Education, Office of Planning, Evaluation, and 
Policy Development, Policy and Program Studies Service, Academic 
Competitiveness and National SMART Grant Programs: First-Year Lessons 
Learned (Washington, D.C., 2009). 

[10] U.S. Department of Education, Academic Competitiveness and 
National SMART Grant Programs: First-Year Lessons Learned. 

[11] A certificate program is a program of at least a year for which 
the college awards a certificate, as opposed to a bachelor's degree. 

[12] S. Provasnik and M. Planty, Community Colleges: Special Supplement 
to The Condition of Education 2008, NCES 2008-033, National Center for 
Education Statistics, Institute of Education Sciences (Washington, 
D.C., 2008). 

[13] For the 2006-2007 and 2007-2008 academic years, Education 
nationally recognized three high school programs as rigorous: the SSI, 
a set of courses similar to the SSI, and AP or IB courses and test 
scores. In addition to these three programs, Education approved as 
rigorous at least one other program in 40 states and approved more than 
one program in 22 states for the 2006-2007 academic year. 

[14] U.S. Department of Education, Academic Competitiveness and 
National SMART Grant Programs: First-Year Lessons Learned. 

[15] According to Education officials, training opportunities included 
AC and SMART Grant-specific sessions or modules at about 150 workshops 
for financial aid professionals with some 9,000 attendees; 53 
nationwide workshops with more than 1,700 attendees; and Webinars with 
4,505 online attendees. 

[16] According to Education, regional training officers are responsible 
for assisting college financial aid administrators with administering 
AC and SMART Grants, among other federal student aid programs. 

[17] The Secretary of Education sent a letter about the AC and SMART 
Grant programs to Chief State School Officers and State Higher 
Education Agencies on May 2, 2006. 

[18] The Federal TRIO Programs are educational opportunity outreach 
programs designed to prepare students from disadvantaged backgrounds 
for programs of postsecondary education. TRIO includes six outreach and 
support programs targeted to serve and assist low-income, first- 
generation college students and students with disabilities to progress 
through the academic pipeline from middle school to postbaccalaureate 
programs. TRIO also includes a training program for directors and staff 
of TRIO projects and a dissemination partnership program to encourage 
the replication or adaptation of successful practices of TRIO projects 
at institutions and agencies that do not have TRIO grants. 

[19] NT4CM, a new initiative launched in fall 2007, is designed to 
reach high school students, through their school counselors, with the 
information they need about postsecondary financial aid. To accomplish 
this, NT4CM encourages state financial aid associations to partner with 
their state's designated guarantee agency and other college access 
professionals to coordinate NT4CM workshops in their state. 

[20] The AC Grant participation rate was calculated by dividing the 
number of AC Grants awarded by the number of Pell Grants awarded. The 
SMART Grant participation rate was calculated by dividing the number of 
SMART Grants awarded by the number of Pell Grants awarded at 4-year 
institutions. 

[21] We used grant data from the 2006-2007 academic year to determine 
state participation rates, since data from the 2007-2008 academic year 
were not finalized at the time of our selection. 

[End of section] 

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