After years of contemplation and months of planning, Division III embarks July 1 on an ambitious effort to collect and analyze financial aid data -- all in support of a core philosophical principle.

July 1 is the first day of a three-month reporting period during which all Division III institutions will be required for the first time to provide financial aid information to the NCAA -- focusing this year on student-athletes who entered school in 2004-05.

The annual reporting program is the biggest compliance initiative ever adopted by Division III, comparable in scope to Division I's collection of academic data, and it supports one of Division III's bedrock principles: student-athletes should be treated like all other students in the awarding of financial aid.

"The last two years really has been a re-examination of the definition of Division III," said Travis Feezell, director of athletics at Whitman College and a member of the Division III Management Council. "One of the main principles is that of financial aid; no financial aid will hinge upon athletic talent.

"If we really believe in that principle, then we needed to create a tool or process to self-assess adherence to that principle."

About 85 percent of Division III institutions voted to do just that at the 2004 Convention, finally clearing the way to establish a long-contemplated but elusive method for ensuring that schools adhere to the philosophy not only in theory, but in practice.

For several years, Division III members debated various ways of checking compliance with financial aid legislation, looking for an effective yet efficient way to monitor schools' financial aid practices. At one point, mandatory audits of institutions' financial aid records were proposed, but abandoned as impractical.

Then, in 2003, a task force proposed a system requiring institutions to organize relevant data from financial aid records into a report that could be submitted electronically to the NCAA research staff. That data then would be analyzed to determine whether aid received by an institution's student-athletes falls statistically within limits -- or a "variance" -- based on aid awarded to the broader student body.

After the membership's approval of that approach, the Division III Financial Aid Committee and NCAA research staff worked through 2004 to devise and conduct pilot testing of the program -- in which more than half of Division III's approximately 420 members participated -- and to use results of that testing to establish an acceptable variance and create guidelines for management of the program.

"In December, we chose the variance level we believe to be acceptable, and recommended that to the Management and Presidents Councils," said Dan Preston, director of enrollment management at Linfield College and chair of the Financial Aid Committee.

4 percent variance

The Councils endorsed a variance of 4 percent, meaning that instances in which aid awarded by an institution to student-athletes exceeds aid to the broader student body by more than that percentage is subject to Financial Aid Committee review -- and could prompt a request to the institution to justify the variance.

That figure -- which the committee suggested would strike the best balance between identifying cases in which student-athlete aid varies too far from institutional norms while keeping the potential resulting caseload of reviews manageable -- seems simple enough. Basically, if student-athletes are found in the reporting process to be receiving 4 percent more in aid than comparable students at an institution, it will trigger a review of reasons why that is happening. If the variance isn't readily explainable by specific data submitted in the institution's electronic report, the Financial Aid Committee may ask that institution to provide additional information. In cases of persistent or extreme variance, that review ultimately could lead to enforcement proceedings against institutions for failing to comply with financial aid legislation.

The legislation that institutions must abide by also is relatively straightforward, suggests Matt Banker, NCAA assistant director of membership services and liaison to the Financial Aid Committee.

Bylaw 15.4.1 states, "The composition of the financial aid package offered to a student-athlete shall be consistent with the established policy of the institution's financial aid office for all students," then lists criteria for measuring that consistency.

Those criteria directly support the expectations of the new reporting program, Banker said, providing a basis for determining limits within which financial aid can be awarded -- as well as explicitly acknowledging that institutions may be able to demonstrate legitimate reasons for exceeding those limits.

"Institutions can justify exceeding the 4 percent variance, so long as they are in compliance with Bylaw 15.4," Banker said.

However, as with many matters involving Division III, the apparent simplicity of a compliance standard can be complicated by member institutions' wide diversity of missions and circumstances.

In reality, that makes any effort to specifically compare the granting of financial aid at an institution "tricky," according to NCAA researcher Eric Hartung, because the circumstances under which awards are determined vary from one institution to the next and within single institutions.

That's why, Hartung said, the reporting program has a relatively modest objective.

"There is no way this program can account for all the intricacies in financial aid packaging that exist at institutions," said the NCAA associate director of research for academic performance and governance.

"The key piece to the puzzle is that we are comparing institutional aid packages for athletes and nonathletes who have similar need," he explained. "That's the key phrase: 'similar financial need.' We are not comparing the average institutional aid package for athletes versus the average institutional aid package for other students."

Achieving that goal is made simpler by the fact that financial aid administrators use standard methods from campus to campus for determining financial need.

"We know we can't account for all of the intricacies," Hartung said. "What we can account for is financial need, which is a standard calculation at each and every institution. All schools give some level of need-based aid."

Self-assessment

The establishment of an acceptable variance and a process for reviewing compliance might understandably be interpreted as emphasizing enforcement of financial aid legislation.

But in fact, Financial Aid Committee members and others who have been involved in implementing the program say it will be more valuable as a self-assessment tool than as an enforcement measure.

"The process, I believe, needs to have some teeth, and therefore needs an enforcement mechanism, or maybe a change mechanism is a better way to put it," said Feezell, who serves as the Management Council's representative on the Financial Aid Committee. "But I'd rather focus on the previous three quarters (of the reporting process) than that last enforcement piece."

Preston agreed, noting that while "it's probably a long-overdue process to confirm that what schools are being asked to do is actually occurring," self-assessment is an important component of the program.

"Maybe (institutions) are not aware of how awards are created, or whether there are discrepancies between certain populations of students," he said. "So it's an opportunity for education, and we learned (in pilot testing) that some schools aren't fully in compliance, so it's an educational experience for them."

Institutions participating in the program this year will receive a report by December 31 indicating whether the school awards financial aid within the acceptable variance, whether it exceeds the 4 percent threshold but no additional justification is required, or requesting justification of a variance exceeding the threshold (the latter group will have until February 1, 2006, to respond).

In any case, the report only addresses circumstances at that particular institution. There is no effort or intent to compare one school with another. As a result, most schools likely will learn things about the ways in which they award financial aid that they didn't know before, Hartung suggests.

"Very few schools, as we learned in the pilot, had ever looked at their data in this way," he said. "So this raises awareness of a particular group on campus (student-athletes) -- and on a lot of campuses, it's a growing group, not a declining group, because participation is growing.

"They may find they have not a positive, but a negative variance -- athletes may be unintentionally disadvantaged when it comes to institutional aid," he said, adding that while the NCAA program is not focusing on such situations, institutions may wish to address such a discrepancy.

Gearing up

As the July 1-September 30 reporting period approaches for the first division-wide go-round in the program, institutions are preparing to compile and submit data -- and if they are not doing so, experiences during pilot testing at other schools suggest they need to begin the process soon (see related story, page 22).

Reporting is an obligation of membership, and as a result of recent legislation proposed by the Division III Presidents Council, failure to report by the September 30 deadline will result in probation, and subsequent failure would result in restricted membership status, then reclassification to corresponding membership.

Though Preston's school isn't necessarily representative, because Linfield and other members of the Northwest Conference actually established a league reporting process during the 1990s, he suggests that it takes time to bring together the various people who may be involved in setting up the process for providing data to the NCAA.

"At my school, when we were preparing for the pilot, we brought together the registrar, institutional research, financial aid, our IT (information technology) people and the NCAA compliance officer ... everybody had a role to play," he said. "We formed a team to walk through and talk through what would be the problems of finding these 25 data elements (requested in the NCAA program), and making sure they're accurate."

The NCAA staff is making resources available for determining not only what data is required, but all other aspects of the program. A detailed "user's manual" for reporting institutions and other useful information already has been mailed to institutions' financial aid directors, and those materials also are accessible online (www1.ncaa.org/membership/governance/division_III/docs/financial_aid_review_taskforce/financial_aid_task_force).

The user's manual will be updated with additional information and made available at the NCAA Web site before the July 1 start date for reporting.

Meanwhile, as this large, unprecedented Division III effort gets underway, Feezell concedes there may be some anxiety about how well the program may work -- especially when all 422 institutions begin grappling with the reality of compiling, reporting and, in some cases, justifying data.

But he believes there are reasons to be confident that the program ultimately will succeed in its objective in helping ensure that student-athletes receive aid comparable to that received by other students.

"This was approved by the membership, so it's clearly something the membership wanted," Feezell said. "The other rationale for confidence is that this has been thoroughly vetted; it's gone through an early pilot process and review of the statistical model, then through another pilot process with a little bit more than half of the Division III membership looking at it, and there have been multiple conversations by the Financial Aid Committee and experts in the field.

"The confidence level should be high, because this has been a thorough two-year process."