Federal Update
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Transcript Federal Update
Federal Update
KASFAA Spring Conference
Bowling Green, Kentucky
April 11-13, 2007
Presented by Greg Martin
2007-08 Pell Grant Payment
Schedules
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Maximum award is $4,310
Minimum award remains $400
Maximum Pell eligible EFC is 4110
Published in DCL P-07-01
Direct Grad-PLUS Loan
Deferments
• Direct PLUS loans for grad./professional
students will be placed into in-school
deferment status based on enrollment
reporting information
– Students continuing at least ½ time
enrollment automatically receive in-school
deferments that remain in effect until
completion date reported by school
Preferred Lenders
• Preferred Lenders Lists are allowed
• No Automatic Referrals
• Must process any loan request made by a student
or parent regardless of lender
– See GEN-07-01
• May not have unreasonable delays
• Publications, scripts and staff training should
comply
• Violations could bring sanctions
• Does not apply to FFEL/Direct Loan choice
Preferred Lenders
• Preferred Lenders Lists are allowed
• No Automatic Referrals
• Must process any loan request made by a student
or parent regardless of lender
– See GEN-07-01
• May not have unreasonable delays
• Publications, scripts and staff training should
comply
• Violations could bring sanctions
• Does not apply to FFEL/Direct Loan choice
Alternative Loans
• Alternative loans must be included as
“estimated financial assistance” if
enrollment is a condition for the loan
– Does not matter where loan proceeds are
sent or whether school certified enrollment
– May replace EFC
– Think about it like an outside scholarship
Training Opportunities
• Spring Training (ACG/SMART Grant)
– West Virginia State University, Institute, WV
(Charleston area)
• May 9, 2007
– Tennessee Tech University, Cookeville, TN
• June 5, 2007
– Univ. of Southern Indiana, Evansville, IN
• April 18, 2007
– Refer to DCL ANN-07-04 for information and a link
to the registration site
Training Opportunities
• R2T4 software training
– On-line, instructor-led
– Includes changes to the R2T4 calculation
resulting from HERA
– 90 minute sessions
– Refer to DCL ANN-07-02 for registration
information
Training Opportunities
• Applicant data resolution training
– On-line, instructor led
– Resolving student application data rejects
and use Department’s web-based systems
to correct errors
– 90 minute sessions
– Refer to DCL ANN-07-03 for registration
information
Negotiated Rulemaking
• Four negotiating teams
– Loans
– ACG/National SMART
– General Provisions
– Accreditation
Negotiated Rulemaking –
Loan Issues
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Entrance counseling for Grad PLUS
Identity theft
Use of preferred lenders
Prohibited inducements
Economic hardship
Retention of disbursement records
supporting MPNs
Negotiated Rulemaking –
Loan Issues
• Certification of E-signatures on MPNs
assigned to ED
• Use of true and exact copy of death
certificates for death discharge
• Retroactive discharge for permanent ant
totally disabled borrowers
• Lender NSLDS reporting timeframes
Negotiated Rulemaking –
Perkins Loan Issues
• Assignment of defaulted loans
• Eligibility requirements for child and family
service cancellation
• Definition of “reasonable and affordable”
collection costs
Negotiated Rulemaking –
ACG/National SMART
• Rigorous secondary school programs
– Who defines rigor?
• Mandatory school participation in ACG/National
SMART
• Requirement that Pell Grants and ACG/National
SMART be disbursed at the same institution when
awarded in the same term
• Academic year progression
Negotiated Rulemaking –
ACG/National SMART
• Grade point average
– Transfer students; coursework; timing of
calculation; eligibility for disbursement
• Interpretation of previously enrolled
– College credits earned while in high school;
treatment of AP/IB credits
• Clarify meaning of successful completion of
rigorous program of study means
• ED monitoring disbursements of student awards
by academic year
Negotiated Rulemaking –
General Provisions
• Consistent enrollment status definitions for all
Title IV programs
• Consistent definitions of undergraduate and
graduate student for all Title IV programs
• Define independent study
• Treatment of FFEL and DL funds when a student
withdraws before beginning class – make
consistent with other programs
– Eliminate the single disbursement requirement for
Perkins and FSEOG
Negotiated Rulemaking –
General Provisions
• Nonstandard term and nonterm programs
– Use of completion of half the weeks of
instructional time for timing of loan disbursements;
loan eligibility for nonstandard term programs;
Require institutions to use consistent
disbursement periods
• Cash Management
– Recovery of stale dated checks; student/parent
permission for electronic disbursements;
Affirmative confirmation of a loan
• Eliminate requirement for written notification and
student confirmation of a post-withdrawal
disbursement of a grant made directly to student
Negotiated Rulemaking –
General Provisions
• Allow standard term programs with monthly starts
to use Pell Formula #1
• Eliminate double pro ration for Pell Grant
payments for clock and credit hour programs w/o
terms
• Pro rate loans for remaining portion of a program
by standard 50% instead of exact ratio
• Allow school to credit student’s account for minor
prior year charges w/o authorization
• Allow school to certify a loan for a transfer student
for remaining portion of loan not used a first
school and then certify a new loan for the new
academic year
Negotiate Rulemaking –
Accreditation
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Due Process
Substantive change
Monitoring
Measures of student achievement
Transfer of credit/acceptance of credentials
Definition of terms – direct assessment
Negotiated Rulemaking
Information
• IFAP under Law & Regulation – select
2006-2007Negotiated Rulemaking for
Higher Education
– Select by team e.g., Accreditation Team
– Obtain list of negotiators, draft agenda,
summary of sessions
– Print proposed regulatory language
• Informative “heads-up” as to what MAY be
coming
Tentative Calendar
• Sessions: December 2006, February, March
and April 2007
• NPRM: June 2007
• 60-day comment period
• Final rules: November 1, 2007
• Effective date June 1, 2008 with possible
early implementation
Fiscal Year 2008
Budget Proposals
FY ’08 Title IV Budget Priorities
Federal Pell Grant
• Increase maximum Pell Grant to $4,600 for
2008-09 and to $5,400 by 2012-13.
• Pell Grants available year-round at eligible 2
year and 4 year degree granting institutions
• Pell Grant eligibility limited to the equivalent
of 16 semesters
• Eliminate the Pell Grant award rule related
to tuition sensitivity
FY ’08 Title IV Budget Priorities
ACG and National SMART Grants
• Increase Academic Competitiveness Grants
(ACG) awards from –
– $750 to $1,125 for first-year students
– $1,300 to $1,950 for second-year
students
FY ’08 Title IV Budget Priorities
Eligibility/EFC
• Exclude amounts held by students and
parents in 529 savings and investment
accounts from the EFC formula
• Implement a consent-based approach to
matching FAFSA data with Federal tax data
–Lots more do be worked out
–Pilot first
–??? Award Year
FY ’08 Title IV Budget Priorities
FFEL/Direct Loans
• Increase annual loan limits for upper
division undergraduates from $5,500 to
$7,500
• Increase aggregate loan limits for all
students
– No amounts specified
FY ’08 Title IV Budget Priorities
Funding for Increased Aid
• Eliminate new funding for –
– FSEOG
– Perkins Loan
– LEAP
• Recall Federal share of Perkins Loan revolving
fund and outstanding loan portfolio.
– Details being evaluated
FY ’08 Title IV Budget Priorities
Funding for Increased Aid
• lender fee from 0.5 percent to 1 percent Reduce
interest subsidies to lenders by 0.5 percent (50
basis points)
• Reduce default insurance from 97 percent
to 95 percent
• Reduce guaranty agency default collection
payments
• Move guaranty agency account
maintenance fees to a unit cost basis
• Increase consolidation.
FAFSA4caster!!!
• Announcing FAFSA4caster
– Tool to help HS Juniors and their families
prepare for college
– Available April 1
• Visit www.FederalStudentAid.ed.gov
– See Electronic Announcement on March
21
Higher Education
Reconciliation Act of
2005
(HERA)
FFEL and Direct Loans
• Loan limits in FFEL and Direct Loans: annual
base limits increased for - – First year students from $2,625 to $3,500
– Second year students from $3,500 to $4,500
• Increases annual additional unsub for - – Graduate students from $10,000 to $12,000
– Prep for grad program from $5,000 to $7,000
– Teacher certification from $5,000 to $7,000
• Aggregate limits are not changed
• Effective for loans first disbursed on or after July
1, 2007
Calculation of EFC 2006-2007
• Simplified Needs Test and Auto Zero EFC
– Increases to $20,000 the threshold under
which a family would automatically have an
EFC of zero
– Eliminates consideration of dependent
student’s tax return for both SNT and AutoZero EFC
Calculation of EFC 2006-07
• Simplified Needs Test and Auto Zero EFC
– Tax return alternative for parents or
students that received, during the base
year, benefits from a Federal means-tested
program such as supplemental security
income, food stamps, free an reduced
school lunch, TANF and WIC
Calculation of EFC 2006-07
• Active Duty Military
– Adds active duty military to the criteria that makes
a student independent
• Action: Dependency Override
• 529 Tuition Savings Plans
– Treats all 529 Pre-Paid and Tuition Savings Plans
as assets of the owner, unless the owner is the
dependent student
• Action: Update assets / do not include as EFA
• Small Businesses
– Excludes small-businesses from assets
• Action: Update Assets
Calculation of EFC 2007-2008
• Income Protection Allowance
– Dependent student increased to $3,000
– Independent students w/o dependents other than
a spouse increased to $6,050
• Applies to single student and married student with both
spouses enrolled
– Independent Students w/o dependents other than
a spouse increased to $9,700
• Applies to a married student where only one spouse is
enrolled
– Independent students with dependents other than
a spouse IPA table increased by 5% for 2007-2008
Calculation of EFC 2007-2008
• Asset assessment rates decreased
– Independent students w/o dependents other than
a spouse
• Reduces asset contribution rate from 35% to 20%
– Independent students with dependents other than
a spouse
• Reduces asset contribution from 12% to 7%
– Dependent students
• Reduces asset contribution from 35% to 20%
New Grant Programs
• Academic Competitiveness Grant (ACG)
• National Science and mathematics to Retain
Talent Grant (National SMART Grant)
Authorization and Funding
• Funding for these programs is not subject to
the annual appropriations process
– 2006-07
– 2007-08
– 2008-09
– 2009-10
– 2010-11
$790 million
$850 million
$920 million
$960 million
$1.01 billion
Rules and Regulations
• Interim Final Regulations for the 2006-07 award
year published on July 3, 2006
– Invitation to comment through August 17, 2006 for
possible changes for 2007-08
– Received 80 comments
• Final Regulations for the 2007-2008 award year
and beyond published on November 1, 2006
– Institutions may implement changes made in the
Final Regulation for the 2006-2007 award year
Rules and Regulations
• One Significant Change
– July 3 interim rule required student to have
received a Pell Grant in the same payment
period (e.g., term) to receive an ACG or
National SMART Grant
– November 1 final rule requires student to
have received a Pell Grant sometime in the
same award year to receive an ACG or
National SMART Grant
Institutional Responsibility
• Institutions are responsible for implementing the
new programs within the guidance provided
• The Secretary recognizes that institutions face
significant challenges in implementing the
programs with almost no lead time for the 2006-07
award year
• These facts will be considered during reviews of
the institution’s implementation of the programs
Programs Are Similar in Some
Ways
Student Eligibility
U.S. Citizen Only – Eligible Non-Citizens Do Not
Qualify
Pell Grant Recipient During Same Award Year
Full-time Enrollment for Payment Period
Enrolled in Degree Program
Progression by Student Academic Year
Only One Scheduled Award for Each Academic Year
ACG
National SMART
1st & 2nd academic years of a
two or four year degree
program.
3rd & 4th academic years of a
four year degree program.
Requires completion of
rigorous high school program
of study.
1st Academic Year- $ 750
2ndAcademic Year- $1300
Requires student to be in a
designated major.
GPA of at least 3.0 as of the
end of 1st academic year only.
GPA of at least 3.0 at each
disbursement.
3rd Academic Year- $4000
4th Academic Year- $4,000
Duration of Student Eligibility
• For ACG, students are restricted to:
– One grant for the student’s first academic year.
– One grant for the student’s second academic year.
• For National SMART Grant, students are restricted
to:
– One grant for each of the student’s third and fourth
academic years.
ACG Eligibility Requirements
• 1st year students
– May not have been previously enrolled while in
high school as a regular student in an ACG
eligible program.
– Have completed a rigorous secondary school
program of study after January 1, 2006.
• 2nd year students
– Have completed a rigorous secondary school
program of study after January 1, 2005.
– Have a 3.0 or higher GPA at the end of 1st year.
ACG: Options for Rigorous Program
1. State Designated Program –
State Submitted Program.
An advanced or honors program established by
a state and in existence for the 2004-2005 or
2005-2006 school year.
State Scholars Initiative (SSI) Programs.
ACG: Options for Rigorous Program
2. A set of courses as outlined in the final regulations.
3. Completion of at least two Advanced Placement
(AP) courses with passing test score of 3 or two
International Baccalaureate (IB) courses with
passing test score of 4.
ACG: Options for Rigorous Program
Set of Courses
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4 years of English.
3 years of math –
– Two of which must be algebra I and above.
3 years of science –
– Two of which must be biology, chemistry, or
physics.
3 years of social studies.
1 year of a language other than English.
ACG: Documenting Rigorous Program
• Institutions are responsible for determining the
eligibility of students who self-identified on at least
the standard(s) selected by the student.
• Institutions are encouraged to identify all eligible
students based on records they have (e.g., high
school transcripts, test scores).
• Institutions are also responsible for determining
eligibility if student informs the institution directly.
ACG: Documenting Rigorous Program
• Documentation from cognizant authority.
– For home schooled students, the parent or
guardian is the cognizant authority.
• For transfer students, an institution may rely on
another school’s determination that student
completed a rigorous program.
– NSLDS will store the data.
ACG: Grade Point Average
• For second academic year, student must have a
cumulative Grade Point Average (GPA) of at least 3.0
from the first academic year.
– GPA determined one time, after completion of
first academic year.
• For a student who transfers after completing first
academic year, the new institution must calculate
GPA using the grades from all coursework accepted
from prior schools.
National SMART Grant
Major Fields of Study
Computer Science
Engineering
Technology
Life Sciences
Mathematics
Physical Sciences
Designated Critical
Foreign Languages
Identified by CIP* code in DCLs GEN-06-06 and
GEN-06-15
*Classification of Instructional Program
National SMART Grant
Major Fields of Study
• Requires that a recipient –
– Declare an eligible major; or
– Show intent to declare eligible major if school policy
does not yet allow a major to be declared.
• Institution must have a process for monitoring that
student is making progress toward completion of the
program with that eligible major.
National SMART Grant
Grade Point Average
• For each payment period, a student must have a
cumulative grade point average (GPA) of at least 3.0
that:
– Includes all coursework required for degree in
approved major.
– Is calculated through last completed payment
period.
– Is reviewed prior to each disbursement.
Both Programs
Need-Based Grants
• Total of ACG/National SMART Grant, EFC, Pell,
and all estimated financial aid cannot exceed cost of
attendance.
– ACG and National SMART Grant may not replace
EFC in need equation.
– To avoid an overaward, an institution may reduce
other aid, including FSEOG, or it may reduce the
ACG or National SMART Grant.
Both Programs
Determining Enrollment Status
• Schools must have the same policy for determining
enrollment status for Pell Grants and for ACGs and
National SMART Grants.
• Schools must use same recalculation policy, such as
recalculation date (census date), that is used for Pell
Grants.
Both Programs
Academic Year
Student’s progress and duration of eligibility in an
eligible program is measured in Title IV academic
years. A Title IV academic year is defined in the HEA
to be –
A minimum of either:
• Twenty-four semester credit hours, or
• Thirty-six quarter credit hours, or
• 900 clock hours.
--AND—
• A minimum of 30 weeks of instructional time (26
weeks for clock hour programs).
Second and Fourth Academic Year
For the 2006-2007 and 2007-2008 Award
Years –
• For a student enrolled in an associate’s degree
program, the second academic year ends when the
student has completed the program.
• For a student enrolled in a bachelor’s degree
program, the fourth academic year ends when the
student has completed the program.
See DCL GEN-06-18
Academic Year - Weeks of Instruction
For the 2006-2007 and 2007-2008
award years, an institution with a 30
week academic year and standard
terms ( Formula 1) may –
Determine the actual
Assume that there
number of weeks of
were 30 weeks of
instructional time that - OR - instructional time for
were included for the
each increment of
student to complete the
credit hours that
number of credit hours in
comprises the
the institution’s Title IV
institution’s Title IV
academic year definition.
academic year
definition.
Academic Year – Weeks of Instruction
May exercise option –
• On a student by student basis.
• For same student for different terms.
• For transfer credits differently than for home earned
credits.
NOTE: An institution must determine the actual
number of weeks of instructional time for a student
who requests that such a determination be made or
questions whether he or she has completed an academic
year.
See DCL GEN-06-18
Comments regarding these materials or
my performance should be directed to:
Jo Ann Borel
202-377-3930
[email protected]