fall 2008 federal update
DESCRIPTION
Fall 2008 Federal Update. Agenda. Budget Update Legislative Update Regulatory Update Perkins Loan Issues NSLDS Reporting FISAP Electronic Announcements. Budget - Appropriations. FY 2009 Budget Policy. Provide for “Year-round” Pell Grants Establish a “Lifetime Limit” for Pell - PowerPoint PPT PresentationTRANSCRIPT
Fall 2008 Federal UpdateFall 2008 Federal Update
AgendaAgenda
Budget UpdateBudget Update Legislative UpdateLegislative Update Regulatory UpdateRegulatory Update Perkins Loan IssuesPerkins Loan Issues
NSLDS ReportingNSLDS Reporting FISAP FISAP Electronic AnnouncementsElectronic Announcements
33
FY 2007 FY 2008 FY 2009*(AY 07-08) (AY 08-09) (AY 09-10)
Pell Grant $13,660,711,520 $16,256,000,000 $18,941,100,000 (Max Award) $4,310 $4,731 $4,800
FSEOG $ 770,932,800 $ 757,464,800 $ - FWS $ 980,354,430 $ 980,491,815 $ 980,500,000 Perkins $ 65,470,680 $ 64,327,222 $ - LEAP $ 64,986,570 $ 63,851,677 $ - ACG/SMART $ 850,000,000 $ 395,000,000 $ 960,000,000
* President's FY 2009 Budget Request
Program
Budget - AppropriationsBudget - Appropriations
The President's FY 2009 Request
Department of Education
2.4%
Non-Defense Discretionary
(Excludes Education)
14.1%
Social Security20.8%
Medicare13.3%
Medicaid/SCHIP7.2%
Other Mandatory11.5%
Interest on Debt8.3%
Defense22.4% $65
$417
$644
$40$224
$360
$260
$730
FY 2009 Budget PolicyFY 2009 Budget Policy
Provide for “Year-round” Pell GrantsProvide for “Year-round” Pell Grants Establish a “Lifetime Limit” for PellEstablish a “Lifetime Limit” for Pell Implement Consent-Based IRS/FAFSA Implement Consent-Based IRS/FAFSA
Data MatchingData Matching Provide Loans for Short-Term TrainingProvide Loans for Short-Term Training Modify Public Service Loan Forgiveness Modify Public Service Loan Forgiveness Eliminate the Income-Based Repayment Eliminate the Income-Based Repayment
Three-Year Interest SubsidyThree-Year Interest Subsidy Recall Federal Share of Perkins LoansRecall Federal Share of Perkins Loans
Higher Education Opportunity Act – Higher Education Opportunity Act – H.R. 4137 (Reauthorization)H.R. 4137 (Reauthorization)
July 29 – House and Senate Conferees July 29 – House and Senate Conferees approve H.R. 4137approve H.R. 4137
July 31July 31stst -- House passes H.R. 4137 by a -- House passes H.R. 4137 by a vote of 380 to 49vote of 380 to 49
July 31July 31stst -- Senate passes H.R. 4137 by a -- Senate passes H.R. 4137 by a vote of 83 to 8vote of 83 to 8
President Bush signed H.R. 4137 into law President Bush signed H.R. 4137 into law on 8/14/08on 8/14/08
HEA Reauthorization – H.R. 4137HEA Reauthorization – H.R. 4137OverviewOverview
AccreditationAccreditation Advisory Committee selected by House, Senate and Advisory Committee selected by House, Senate and
ED Secretary. No appointments until after 1/31/09.ED Secretary. No appointments until after 1/31/09. Prohibits ED Secretary from establishing criteria to Prohibits ED Secretary from establishing criteria to
assess student achievementassess student achievement
Consumer Information & DisclosureConsumer Information & Disclosure Greater transparency on college costsGreater transparency on college costs Disclosures for IHEs with preferred lender listsDisclosures for IHEs with preferred lender lists
HEA Reauthorization – H.R. 4137HEA Reauthorization – H.R. 4137OverviewOverview
Pell GrantsPell Grants Provides for year-round Pell GrantsProvides for year-round Pell Grants Limits eligibility to 18 semestersLimits eligibility to 18 semesters Sets EFC to $0 for students whose parent Sets EFC to $0 for students whose parent
was in Armed Forces and died in Iraq or was in Armed Forces and died in Iraq or Afghanistan after 9/11/01Afghanistan after 9/11/01
ACG/SMARTACG/SMART Technical changes on ECASLA provisionsTechnical changes on ECASLA provisions
HEA Reauthorization – H.R. 4137HEA Reauthorization – H.R. 4137OverviewOverview
Student LoansStudent Loans Requires ED to oversee private education Requires ED to oversee private education
loans made by FFEL lenders to students loans made by FFEL lenders to students attending Title IV institutionsattending Title IV institutions
Expands loan forgiveness if Congress Expands loan forgiveness if Congress appropriates fundsappropriates funds
Makes foreign nursing schools eligible to Makes foreign nursing schools eligible to participate in the FFEL programparticipate in the FFEL program
FAFSA SimplificationFAFSA Simplification
HEA Reauthorization – H.R. 4137HEA Reauthorization – H.R. 4137OverviewOverview
Maintenance of Effort (MOE) – Withholds Maintenance of Effort (MOE) – Withholds College Access Challenge Grant (old College Access Challenge Grant (old SLEAP Program) funds from States that SLEAP Program) funds from States that failed to raise spending on higher ed each failed to raise spending on higher ed each year by at least as much as they increased year by at least as much as they increased it, on average, over the last five years.it, on average, over the last five years.
HEA Reauthorization – H.R. 4137HEA Reauthorization – H.R. 4137OverviewOverview
Settlement of Claims Settlement of Claims Settlements for any claims exceeding $1 Settlements for any claims exceeding $1
million must be reviewed by Attorney Generalmillion must be reviewed by Attorney General New Programs and ReportsNew Programs and Reports
Over 60 new programs authorized and more Over 60 new programs authorized and more than 20 new studies must be completed than 20 new studies must be completed
HEA Reauthorization – H.R. 4137 HEA Reauthorization – H.R. 4137 Federal Perkins Loan ProgramFederal Perkins Loan Program
Amends HEA Amends HEA §428C(b)(1) to §428C(b)(1) to require require disclosures to Perkins Loan borrowers who disclosures to Perkins Loan borrowers who consolidate:consolidate: Borrower will lose all interest-free periods associated Borrower will lose all interest-free periods associated
with a Perkins Loanwith a Perkins Loan Borrower will no longer be eligible for cancellation Borrower will no longer be eligible for cancellation
benefits benefits Lender must list occupations contained in HEA Lender must list occupations contained in HEA
section 465 that qualify for cancellationsection 465 that qualify for cancellation
HEA Reauthorization – H.R. 4137 HEA Reauthorization – H.R. 4137 Federal Perkins Loan ProgramFederal Perkins Loan Program
Amends HEA Amends HEA §463(a)(4)(B) – Secretary may §463(a)(4)(B) – Secretary may allow institutions to refer Perkins Loans to allow institutions to refer Perkins Loans to the Department for collection. Any sums the Department for collection. Any sums collected must be repaid to the institution collected must be repaid to the institution (minus collection costs) as additional FCC.(minus collection costs) as additional FCC.
Amends HEA §463(a)(9) to prohibit the Amends HEA §463(a)(9) to prohibit the Secretary from mandating assignment other Secretary from mandating assignment other than as provided in §463(a)(4) and (5).than as provided in §463(a)(4) and (5).
HEA Reauthorization – H.R. 4137 HEA Reauthorization – H.R. 4137 Federal Perkins Loan ProgramFederal Perkins Loan Program
Amends HEA Amends HEA §464(a) to:§464(a) to: Increase annual loan limits to $5,500 for Increase annual loan limits to $5,500 for
undergraduate studentsundergraduate students Increase annual loan limits to $8,000 for Increase annual loan limits to $8,000 for
graduate/professional studentsgraduate/professional students Increase aggregate loan limits for undergraduate Increase aggregate loan limits for undergraduate
students to $27,500students to $27,500 Increase aggregate loan limits for Increase aggregate loan limits for
graduate/professional students to $60,000graduate/professional students to $60,000 Increase aggregate loan limits to $11,000 for “any Increase aggregate loan limits to $11,000 for “any
other student”other student”
HEA Reauthorization – H.R. 4137 HEA Reauthorization – H.R. 4137 Federal Perkins Loan ProgramFederal Perkins Loan Program
Amends HEA Amends HEA §464(c)(1)(F) to require the §464(c)(1)(F) to require the Secretary to cancel a Perkins Loan if the Secretary to cancel a Perkins Loan if the borrower is:borrower is: Permanently and totally disabled Permanently and totally disabled Unable to engage in any substantial gainful activity Unable to engage in any substantial gainful activity
because of a physical or mental impairment that is because of a physical or mental impairment that is expected to result in death, has lasted for a expected to result in death, has lasted for a continuous period of not less than 60 months, or can continuous period of not less than 60 months, or can be expected to last for a continuous period of not less be expected to last for a continuous period of not less than 60 months orthan 60 months or
If the borrower is determined by the VA to If the borrower is determined by the VA to unemployable due to a service-connected disabilityunemployable due to a service-connected disability
HEA Reauthorization – H.R. 4137 HEA Reauthorization – H.R. 4137 Federal Perkins Loan ProgramFederal Perkins Loan Program
Amends HEA Amends HEA §464(c)(1)(F) to§464(c)(1)(F) to:: Allow Secretary to develop regulations safeguarding Allow Secretary to develop regulations safeguarding
against fraud and abuse in TPD dischargesagainst fraud and abuse in TPD discharges Allow Secretary to develop regulations to resume Allow Secretary to develop regulations to resume
collection on loans discharged for TPD if the borrower collection on loans discharged for TPD if the borrower receives a new Title IV loan or earns income in receives a new Title IV loan or earns income in excess of the poverty lineexcess of the poverty line
Effective July 1, 2008Effective July 1, 2008
HEA Reauthorization – H.R. 4137 HEA Reauthorization – H.R. 4137 Federal Perkins Loan ProgramFederal Perkins Loan Program
Amends HEA Amends HEA §464(e) to remove requirement §464(e) to remove requirement that a forbearance request be in writingthat a forbearance request be in writing
Requires terms of forbearance to be Requires terms of forbearance to be documented by confirming the agreement documented by confirming the agreement with borrower by notice and recording terms with borrower by notice and recording terms in the borrower’s file.in the borrower’s file.
Amends HEA §464(h)(1)(A) to require 9 on-Amends HEA §464(h)(1)(A) to require 9 on-time payments to successfully rehabilitate a time payments to successfully rehabilitate a defaulted Perkins Loan defaulted Perkins Loan
HEA Reauthorization – H.R. 4137 HEA Reauthorization – H.R. 4137 Federal Perkins Loan ProgramFederal Perkins Loan Program
Amends HEA Amends HEA §465(a)(2) to extend §465(a)(2) to extend cancellation benefits to Perkins Loan cancellation benefits to Perkins Loan borrowers who are:borrowers who are: teachers in low-income educational service agencies teachers in low-income educational service agencies
(including special ed teachers)(including special ed teachers) Full-time staff in a pre-kindergarten or child care Full-time staff in a pre-kindergarten or child care
program licensed or regulated by a Stateprogram licensed or regulated by a State Full-time lawyers employed by a public defender Full-time lawyers employed by a public defender
organizationorganization Full-time fire fightersFull-time fire fighters
HEA Reauthorization – H.R. 4137 HEA Reauthorization – H.R. 4137 Federal Perkins Loan ProgramFederal Perkins Loan Program
Amends HEA Amends HEA §465(a)(2) to extend §465(a)(2) to extend cancellation benefits to Perkins Loan cancellation benefits to Perkins Loan borrowers who are:borrowers who are: Full-time faculty members at a Tribal college or Full-time faculty members at a Tribal college or
UniversityUniversity Librarians with a Master’s degree in Library Science Librarians with a Master’s degree in Library Science
employed in a low-income school or a public library employed in a low-income school or a public library serving low-income schoolsserving low-income schools
Full-time speech language pathologists with a Full-time speech language pathologists with a Master’s degree working with low-income childrenMaster’s degree working with low-income children
HEA Reauthorization – H.R. 4137 HEA Reauthorization – H.R. 4137 Federal Perkins Loan ProgramFederal Perkins Loan Program
Full cancellation benefits (100%) over give Full cancellation benefits (100%) over give years for members of the Armed forces years for members of the Armed forces serving in areas of hostilityserving in areas of hostility
Sense of Congress:Sense of Congress: ““The Federal Perkins Loan program is an The Federal Perkins Loan program is an
important part of Federal student aid and important part of Federal student aid and should remain a campus-based aid program should remain a campus-based aid program at colleges and Universities.”at colleges and Universities.”
HEA Reauthorization – H.R. 4137 HEA Reauthorization – H.R. 4137 Federal Perkins Loan ProgramFederal Perkins Loan Program
Amends HEA Amends HEA §484A to require that:§484A to require that: Perkins Loans are not subject to a defense based on Perkins Loans are not subject to a defense based on
a claim of infancya claim of infancy Obligation to title IV aid does not apply to deceased Obligation to title IV aid does not apply to deceased
students, a deceased student’s estate or the estate of students, a deceased student’s estate or the estate of such student’s family.such student’s family.
Amends HEA Amends HEA §485(b)(1)(A) to expand exist §485(b)(1)(A) to expand exist counseling requirements for FFEL, Direct counseling requirements for FFEL, Direct and Perkins Loansand Perkins Loans
Ensuring Continued Access to Ensuring Continued Access to Student Loans Act (ECASLA)Student Loans Act (ECASLA)
Public Law 110-227Public Law 110-227 Enacted May 7, 2008Enacted May 7, 2008 Addresses concerns about student loan Addresses concerns about student loan
access problems created by recent access problems created by recent disruptions in credit marketsdisruptions in credit markets
Increases annual and aggregate Stafford Increases annual and aggregate Stafford Loan LimitsLoan Limits
Makes changes to the PLUS Loan & Makes changes to the PLUS Loan & ACG/SMART Grant ProgramsACG/SMART Grant Programs
ECASLA – Lender of Last ResortECASLA – Lender of Last Resort
All FFEL loan types, except Federal All FFEL loan types, except Federal Consolidation Loans, must be made under an Consolidation Loans, must be made under an LLR ProgramLLR Program
All LLR loans must be made with statutory All LLR loans must be made with statutory maximum interest rate, origination fee, and maximum interest rate, origination fee, and default feedefault fee
Secretary may designate entire schools as LLR Secretary may designate entire schools as LLR eligible through June 30, 2009eligible through June 30, 2009
GAs and lenders are prohibited from violating GAs and lenders are prohibited from violating inducement provisions or marketing LLR loans inducement provisions or marketing LLR loans
ECASLA – Loan Purchases by EDECASLA – Loan Purchases by ED
Department of Education given authority Department of Education given authority to purchase from FFEL lenders Stafford to purchase from FFEL lenders Stafford and PLUS loans first disbursed on or after and PLUS loans first disbursed on or after October 1, 2003 and before July 1, 2009October 1, 2003 and before July 1, 2009
Authority expires on July 1, 2009Authority expires on July 1, 2009 Represents temporary measure to provide Represents temporary measure to provide
capital for student loan marketcapital for student loan market
ECASLA – PLUS Loan EligibilityECASLA – PLUS Loan Eligibility
Extenuating circumstances in determining PLUS Extenuating circumstances in determining PLUS loan eligibility for parent and grad/prof student loan eligibility for parent and grad/prof student applicants during period between 1/1/007 and applicants during period between 1/1/007 and 12/31/09:12/31/09: Borrower has been or is delinquent for 180 days or Borrower has been or is delinquent for 180 days or
less on mortgage payments or medical billsless on mortgage payments or medical bills Borrower has not or is not more than 89 days Borrower has not or is not more than 89 days
delinquent on repayment of any other debtdelinquent on repayment of any other debt
ECASLA – Parent PLUS BorrowersECASLA – Parent PLUS Borrowers
PLUS Loans disbursed on or after July 1, 2008:PLUS Loans disbursed on or after July 1, 2008: Option to enter repayment either 60 days after Option to enter repayment either 60 days after
disbursement or 6 months after dependent student disbursement or 6 months after dependent student falls below half-timefalls below half-time
Accrued interest is capitalized for borrowers who do Accrued interest is capitalized for borrowers who do not delay repaymentnot delay repayment
Borrowers may repay accrued interest before entering Borrowers may repay accrued interest before entering repayment if they opt to delay repaymentrepayment if they opt to delay repayment
ECASLA – Loan LimitsECASLA – Loan Limits
Increases unsubsidized Stafford annual Increases unsubsidized Stafford annual limit by $2,000 for undergraduate limit by $2,000 for undergraduate dependent studentsdependent students
Increases additional unsubsidized Increases additional unsubsidized Stafford annual limits by $2,000 for Stafford annual limits by $2,000 for dependent students whose parents are dependent students whose parents are unable to borrow a PLUS loanunable to borrow a PLUS loan
ECASLA – Loan LimitsECASLA – Loan Limits
Increases the additional unsubsidized Increases the additional unsubsidized Stafford annual limits by $2,000 for Stafford annual limits by $2,000 for independent undergraduate studentsindependent undergraduate students
Increases additional unsubsidized Increases additional unsubsidized Stafford Loan limit by $2,000 for Stafford Loan limit by $2,000 for preparatory coursework for enrollment in preparatory coursework for enrollment in undergraduate programsundergraduate programs
ECASLA – Loan LimitsECASLA – Loan Limits
Increases aggregate unsubsidized loan Increases aggregate unsubsidized loan amounts for undergraduate dependent amounts for undergraduate dependent students from $23,000 to $31,000students from $23,000 to $31,000
Increases aggregate unsubsidized loan Increases aggregate unsubsidized loan amounts for undergraduate independent amounts for undergraduate independent students from $46,000 to $57,500 students from $46,000 to $57,500
ECASLA – ACT/SMART GrantsECASLA – ACT/SMART Grants
Eliminates restriction to U.S. citizensEliminates restriction to U.S. citizens Allows awards to students enrolled less than full-Allows awards to students enrolled less than full-
time but at least half-time, with proportionally time but at least half-time, with proportionally reduced maximum awardsreduced maximum awards
Requires awarding of grants and making of Requires awarding of grants and making of payments to be on the same basis as the Pell payments to be on the same basis as the Pell Grant ProgramGrant Program
Provides that awards are based on the student’s Provides that awards are based on the student’s grade level instead of academic yeargrade level instead of academic year
3131
2007-2008 Negotiated Rulemaking2007-2008 Negotiated Rulemaking
CCRAA ImplementationCCRAA Implementation Rules effective for 2009-2010 & Rules effective for 2009-2010 &
subsequent award years, except subsequent award years, except TEACHTEACH
Two committees establishedTwo committees established TEACH GrantTEACH Grant Loan IssuesLoan Issues
2007-2008 Negotiated Rulemaking2007-2008 Negotiated Rulemaking
TEACH Grant NegotiationsTEACH Grant Negotiations 3 Sessions of Negotiations3 Sessions of Negotiations
January 8-10, 2008January 8-10, 2008 January 22-24, 2008January 22-24, 2008 February 6-8, 2008February 6-8, 2008
NPRM published March 21, 2008NPRM published March 21, 2008 Final Regulations published June 23, 2008Final Regulations published June 23, 2008 Negotiated Rulemaking website:Negotiated Rulemaking website:
http://www.ed.gov/policy/highered/reg/hearulemaking/http://www.ed.gov/policy/highered/reg/hearulemaking/2008/index2008.html2008/index2008.html
2007-2008 Negotiated Rulemaking2007-2008 Negotiated Rulemaking
Loan NegotiationsLoan Negotiations 4 Sessions4 Sessions
January 14-16January 14-16 February 4-6February 4-6 March 4-6March 4-6 April 15-16April 15-16
NPRM published July 1, 2008NPRM published July 1, 2008 Final expected by November 1, 2008Final expected by November 1, 2008
TEACH GRANT PROGRAM TEACH GRANT PROGRAM SUMMARYSUMMARY
The TEACH Grant Program is a non-need based The TEACH Grant Program is a non-need based program that provides up to $4,000 per year to students program that provides up to $4,000 per year to students enrolled in an eligible program and who agree to teach enrolled in an eligible program and who agree to teach as a highly-qualified teacher in a high-need field, at a as a highly-qualified teacher in a high-need field, at a low-income elementary or secondary school for at least low-income elementary or secondary school for at least four years within eight years of completing the program four years within eight years of completing the program for which the TEACH Grant was awarded. for which the TEACH Grant was awarded.
If the Grant recipient fails to complete the required If the Grant recipient fails to complete the required teaching service, the TEACH Grant is converted to a teaching service, the TEACH Grant is converted to a Federal Direct Unsubsidized Loan with interest accruing Federal Direct Unsubsidized Loan with interest accruing from the date the grant was disbursed.from the date the grant was disbursed.
TEACH Grant Program TEACH Grant Program Final RegulationsFinal Regulations
Grants of up to:Grants of up to: $4,000 per year for 1$4,000 per year for 1stst undergraduate or post- undergraduate or post-
baccalaureate degree (up to an aggregate amount of baccalaureate degree (up to an aggregate amount of $16,000)$16,000)
$4,000 per year for graduate degree (up to aggregate $4,000 per year for graduate degree (up to aggregate amount of $8,000)amount of $8,000)
TEACH Grants are prorated for less than full-time TEACH Grants are prorated for less than full-time studentsstudents
Amount of TEACH Grants, in combination with other Amount of TEACH Grants, in combination with other assistance, may not exceed the cost of attendance.assistance, may not exceed the cost of attendance.
TEACH Grant ProgramTEACH Grant ProgramFinal RegulationsFinal Regulations
Applicants can be:Applicants can be: Undergraduate studentsUndergraduate students Graduate students pursuing a Master’sGraduate students pursuing a Master’s Students enrolled in a post-baccalaureate Students enrolled in a post-baccalaureate
teacher credential program orteacher credential program or Current or former teachers or retireesCurrent or former teachers or retirees
TEACH Grant ProgramTEACH Grant ProgramFinal RegulationsFinal Regulations
TEACH Grant Eligibility – All applicants must:TEACH Grant Eligibility – All applicants must: Meet requirements of 34 CFR 668, Subpart C – Meet requirements of 34 CFR 668, Subpart C –
General Provisions Student Eligibility General Provisions Student Eligibility Submit a completed FAFSASubmit a completed FAFSA Sign an Agreement to ServeSign an Agreement to Serve Enroll in a TEACH Grant-eligible institution in a Enroll in a TEACH Grant-eligible institution in a
TEACH Grant-eligible programTEACH Grant-eligible program Be completing, or intend to complete, coursework Be completing, or intend to complete, coursework
necessary to begin a career in teachingnecessary to begin a career in teaching Not have already earned a first BA or post-bacNot have already earned a first BA or post-bac
TEACH Grant ProgramTEACH Grant ProgramFinal RegulationsFinal Regulations
TEACH Grant Undergraduate, Post-Bac and TEACH Grant Undergraduate, Post-Bac and Graduate Student EligibilityGraduate Student Eligibility Cumulative GPA of at least 3.25Cumulative GPA of at least 3.25
• From high school for first year student or first semester of From high school for first year student or first semester of collegecollege
• From college for other students From college for other students Or above the 75Or above the 75thth percentile on one of the batteries of percentile on one of the batteries of
an admissions test, such as:an admissions test, such as:• SATSAT• ACTACT• GREGRE
TEACH Grant ProgramTEACH Grant ProgramFinal RegulationsFinal Regulations
TEACH Grant Eligibility for Current/ Former TEACH Grant Eligibility for Current/ Former Teachers and Retirees:Teachers and Retirees: Current teachers/retirees must have expertise in a Current teachers/retirees must have expertise in a
high-need field and be pursuing a master’s degreehigh-need field and be pursuing a master’s degree Former teachers must be pursuing a certification Former teachers must be pursuing a certification
through a high-quality alternative certification routethrough a high-quality alternative certification route Alternative certification must be offered by an Alternative certification must be offered by an
eligible institution of higher education and must be eligible institution of higher education and must be part of a Master’s degree programpart of a Master’s degree program
TEACH GRANT ProgramTEACH GRANT ProgramFinal RegulationsFinal Regulations
TEACH Grant-eligible Institutions:TEACH Grant-eligible Institutions: Must be financially responsible in accordance Must be financially responsible in accordance
with 34 CFR 668, subpart L, or an alternative with 34 CFR 668, subpart L, or an alternative standardstandard
May establish eligibility in any of 4 detailed in May establish eligibility in any of 4 detailed in Dear Colleague Letter GEN-08-07Dear Colleague Letter GEN-08-07
TEACH Grant-eligible institutions have wide TEACH Grant-eligible institutions have wide latitude to designate the TEACH Grant eligible latitude to designate the TEACH Grant eligible programs offered by the institutionprograms offered by the institution
TEACH Grant ProgramTEACH Grant ProgramFinal RegulationsFinal Regulations
TEACH Grant recipient must sign an TEACH Grant recipient must sign an “Agreement to Serve” that requires the “Agreement to Serve” that requires the recipient to:recipient to: Teach for four years within 8 years of Teach for four years within 8 years of
completing or ceasing enrollment in a completing or ceasing enrollment in a TEACH Grant-eligible program as a full-TEACH Grant-eligible program as a full-time highly-qualified teacher in—time highly-qualified teacher in—• A low-income elementary or secondary schoolA low-income elementary or secondary school• A high-need fieldA high-need field
TEACH Grant ProgramTEACH Grant ProgramFinal RegulationsFinal Regulations
High-need field –High-need field – MathematicsMathematics ScienceScience Foreign languageForeign language Bilingual educationBilingual education English language acquisitionEnglish language acquisition Special educationSpecial education Reading SpecialistReading Specialist Other high-need field documented by local, State or Other high-need field documented by local, State or
Federal governmentFederal government
TEACH Grant ProgramTEACH Grant ProgramFinal RegulationsFinal Regulations
If the Grant recipient fails to complete the If the Grant recipient fails to complete the required teaching service, the TEACH Grant is required teaching service, the TEACH Grant is converted to a Federal Direct Unsubsidized converted to a Federal Direct Unsubsidized Loan with interest accruing from the date the Loan with interest accruing from the date the grant was disbursed.grant was disbursed.
Grant recipient will have 30 days from the date Grant recipient will have 30 days from the date of conversion in which to pay accrued interest. of conversion in which to pay accrued interest. Otherwise interest will be capitalized as of the Otherwise interest will be capitalized as of the date of conversation.date of conversation.
TEACH Grant ProgramTEACH Grant ProgramFinal RegulationsFinal Regulations
A TEACH GRANT recipient whose grant has A TEACH GRANT recipient whose grant has converted to a Federal Direct Unsubsidized converted to a Federal Direct Unsubsidized Loan—Loan— Enters repayment immediatelyEnters repayment immediately Is eligible for most benefits of the Direct Loan Is eligible for most benefits of the Direct Loan
Program, including an in-school deferment andProgram, including an in-school deferment and Is not eligible for any grace periodIs not eligible for any grace period
A TEACH Grant that is converted to a loan A TEACH Grant that is converted to a loan cannot reconvert to a TEACH Grantcannot reconvert to a TEACH Grant
FINAL RULESFINAL RULESPerkins, FFEL & Direct LoansPerkins, FFEL & Direct Loans
Simplification of Deferment ProcessSimplification of Deferment Process Secretary may grant a deferment based on Secretary may grant a deferment based on
information from a FFEL holderinformation from a FFEL holder FFEL holder may grant a deferment based on FFEL holder may grant a deferment based on
information from the Secretary or another information from the Secretary or another FFEL holderFFEL holder
Perkins Loan school may grant a deferment Perkins Loan school may grant a deferment based on information from the Secretary, a based on information from the Secretary, a FFEL holder or another Perkins Loan schoolFFEL holder or another Perkins Loan school
FINAL RULESFINAL RULESPerkins, FFEL & Direct LoansPerkins, FFEL & Direct Loans
Simplification of Deferment Process (cont.)Simplification of Deferment Process (cont.) Borrower must request deferment verbally or in Borrower must request deferment verbally or in
writingwriting Holder must grant deferment for same reason and Holder must grant deferment for same reason and
same time periodsame time period Holder must have no conflicting information on Holder must have no conflicting information on
borrower’s eligibilityborrower’s eligibility
FINAL RULESFINAL RULESPerkins, FFEL & Direct LoansPerkins, FFEL & Direct Loans
Simplified Deferment Process (cont.)Simplified Deferment Process (cont.) Holder must grant a military deferment based Holder must grant a military deferment based
on request from borrower or borrower’s on request from borrower or borrower’s representative with supporting documentationrepresentative with supporting documentation
Holder must provide notice to borrower or Holder must provide notice to borrower or representative, if applicable, that deferment representative, if applicable, that deferment has been grantedhas been granted
FINAL RULESFINAL RULESPerkins, FFEL & Direct LoansPerkins, FFEL & Direct Loans
Loan holders may use an accurate and Loan holders may use an accurate and complete photocopy of a Death Certificate complete photocopy of a Death Certificate to document death discharge to document death discharge
““Exceptional circumstances” discharge by Exceptional circumstances” discharge by chief executive officer based on other chief executive officer based on other reliable information unchangedreliable information unchanged
FINAL RULESFINAL RULESPerkins, FFEL & Direct LoansPerkins, FFEL & Direct Loans
Total and Permanent Disability (TPD) Total and Permanent Disability (TPD) DischargeDischarge Title IV Loan Program regulations restructured to Title IV Loan Program regulations restructured to
follow process and clarify eligibility requirementsfollow process and clarify eligibility requirements TPD discharge application must be submitted within TPD discharge application must be submitted within
90 days of date physician certifies the form90 days of date physician certifies the form Borrower’s TPD date defined as physician’s Borrower’s TPD date defined as physician’s
certification date on the applicationcertification date on the application
FINAL RULESFINAL RULESPerkins, FFEL & Direct LoansPerkins, FFEL & Direct Loans
TPD Discharge (cont.)TPD Discharge (cont.) Conditional discharge period is prospective starting on Conditional discharge period is prospective starting on
the date the physician certifies the borrower’s TPDthe date the physician certifies the borrower’s TPD Title IV loans or earned income received before date of Title IV loans or earned income received before date of
TPD do not disqualify borrower for dischargeTPD do not disqualify borrower for discharge Title IV loans or loan disbursements received after date Title IV loans or loan disbursements received after date
of TPD disqualify borrower for dischargeof TPD disqualify borrower for discharge
FINAL RULESFINAL RULESPerkins, FFEL & Direct LoansPerkins, FFEL & Direct Loans
TPD Discharge (cont.)TPD Discharge (cont.) Minimal earned income allowed during Minimal earned income allowed during
conditional discharge periodconditional discharge period Loan holder must notify borrower that no Loan holder must notify borrower that no
payments are due during discharge processpayments are due during discharge process Only payments made after the TPD date Only payments made after the TPD date
(physician’s certification date) are returned upon (physician’s certification date) are returned upon receipt of final dischargereceipt of final discharge
FINAL RULESFINAL RULESFFEL & Perkins Loan ProgramFFEL & Perkins Loan Program
NSLDS Reporting RequirementsNSLDS Reporting Requirements Requires schools, lenders and GAs to report Requires schools, lenders and GAs to report
enrollment and loan status information or any enrollment and loan status information or any other Title IV loan-related information required other Title IV loan-related information required by the Secretary by a deadline established by by the Secretary by a deadline established by the Secretarythe Secretary
FINAL RULESFINAL RULESFFEL & Perkins Loan ProgramsFFEL & Perkins Loan Programs
Certification of Electronic Signatures on Certification of Electronic Signatures on MPNs Assigned to EDMPNs Assigned to ED Schools & loan holders must maintain a Schools & loan holders must maintain a
certification of creation and maintenance of E-certification of creation and maintenance of E-MPN process, including borrower authentication MPN process, including borrower authentication and signature processand signature process
E-signed MPNs must be retained for at least 3 E-signed MPNs must be retained for at least 3 years after all loans are satisfiedyears after all loans are satisfied
FINAL RULESFINAL RULESFFEL & Perkins Loan ProgramsFFEL & Perkins Loan Programs
Certification of Electronic Signatures on MPNs Certification of Electronic Signatures on MPNs Assigned to ED (cont.)Assigned to ED (cont.) Upon Secretary’s request:Upon Secretary’s request:
• Loan holder must provide the certification and Loan holder must provide the certification and cooperate in all activities to enforce an assigned loan, cooperate in all activities to enforce an assigned loan, including provision of testimony in a legal proceedingincluding provision of testimony in a legal proceeding
FINAL RULESFINAL RULESFFEL & Perkins Loan ProgramFFEL & Perkins Loan Program
Certification of Electronic Signatures on Certification of Electronic Signatures on MPNs Assigned to ED (cont.)MPNs Assigned to ED (cont.)
Required certification must include:Required certification must include: Description of borrower’s steps to execute & Description of borrower’s steps to execute &
sign MPNsign MPN Copy of each screen as viewed by the borrower Copy of each screen as viewed by the borrower
when signing MPN electronicallywhen signing MPN electronically
FINAL RULESFINAL RULESFFEL & Perkins Loan ProgramsFFEL & Perkins Loan Programs
Certification of Electronic Signatures on Certification of Electronic Signatures on MPNs Assigned to ED (cont.)MPNs Assigned to ED (cont.)
Required certification must include:Required certification must include: Description of process ensuring data integrity Description of process ensuring data integrity Documentation supporting loan holder’s Documentation supporting loan holder’s
authentication and electronic signature processauthentication and electronic signature process All other evidence required by EDAll other evidence required by ED
FINAL RULESFINAL RULESFFEL & Perkins Loan ProgramsFFEL & Perkins Loan Programs
Certification of Electronic Signatures on Certification of Electronic Signatures on MPNs Assigned to ED (cont.)MPNs Assigned to ED (cont.) Loan holder must provide any records Loan holder must provide any records
requested to resolve a dispute within 10 requested to resolve a dispute within 10 business daysbusiness days
Loan holder must provide complete access to Loan holder must provide complete access to e-records until all loans made on the MPN are e-records until all loans made on the MPN are satisfiedsatisfied
FINAL RULESFINAL RULESFFEL & Perkins Loan ProgramsFFEL & Perkins Loan Programs
Record Retention Requirements on MPNs Record Retention Requirements on MPNs Assigned to EDAssigned to ED Perkins schools must retain records showing date & Perkins schools must retain records showing date &
amount of each disbursement of loan made on MPN amount of each disbursement of loan made on MPN until the loan is satisfied.until the loan is satisfied.
Upon the Secretary request, schools must submit Upon the Secretary request, schools must submit disbursement records on assigned loans to ED.disbursement records on assigned loans to ED.
GAs must submit lender disbursement records to ED GAs must submit lender disbursement records to ED on assigned loanson assigned loans
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FINAL RULESFINAL RULESPerkins Loan ProgramPerkins Loan Program
Mandatory AssignmentMandatory Assignment Schools hold more than $400 million in Perkins Schools hold more than $400 million in Perkins
Loans that have been in default for 5 or more Loans that have been in default for 5 or more yearsyears
Little collection activity seen on these loans.Little collection activity seen on these loans.
ED streamlined the voluntary assignment to ED streamlined the voluntary assignment to encourage schools to assign their aged, encourage schools to assign their aged, defaulted loansdefaulted loans
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FINAL RULESFINAL RULES Perkins Loans Program Perkins Loans Program
Secretary may require assignment of a Perkins Secretary may require assignment of a Perkins Loan if—Loan if— Outstanding principal balance is $100 or more,Outstanding principal balance is $100 or more,
In default for 7 or more years, and In default for 7 or more years, and
No payment has been received in past 12 monthsNo payment has been received in past 12 months
ED will notify schools when to assign loans.ED will notify schools when to assign loans.
FINAL RULESFINAL RULESPerkins Loan ProgramPerkins Loan Program
Definition of “Reasonable” Collection CostsDefinition of “Reasonable” Collection Costs First Collection Effort: 30% of principal, First Collection Effort: 30% of principal,
interest and late charges collectedinterest and late charges collected Second Collection Effort: 40% of principal, Second Collection Effort: 40% of principal,
interest and late charges collectedinterest and late charges collected Litigation: 40% plus court costsLitigation: 40% plus court costs
FINAL RULESFINAL RULESPerkins Loan ProgramPerkins Loan Program
Child & Family Service CancellationChild & Family Service Cancellation To qualify for cancellation a borrower must To qualify for cancellation a borrower must
be:be: Employed full-time by a child and family service Employed full-time by a child and family service
agencyagency Provide services directly and exclusively to high-Provide services directly and exclusively to high-
risk children from low-income communitiesrisk children from low-income communities
Perkins Loan IssuesPerkins Loan Issues
Electronic Announcements:Electronic Announcements: Use of Third-Party Contractors to Perform Use of Third-Party Contractors to Perform
Perkins Loan Billing and Collection Activities – Perkins Loan Billing and Collection Activities – Posted April 24, 2008Posted April 24, 2008
Discontinuation of “Late” Late Disbursements Discontinuation of “Late” Late Disbursements – Posted July 1, 2008– Posted July 1, 2008
Changes in Assignment Procedures for Changes in Assignment Procedures for Conditional Disability Discharge – Posted July Conditional Disability Discharge – Posted July 9, 20089, 2008
Perkins Loan IssuesPerkins Loan Issues
FISAP-related Dear Colleague Letters:FISAP-related Dear Colleague Letters: 2007-2008 Campus-Based Reallocation Form 2007-2008 Campus-Based Reallocation Form
and process – DCL CB-08-10and process – DCL CB-08-10 FISAP Form/Instructions – DCL CB-08-09FISAP Form/Instructions – DCL CB-08-09 Edit Corrections and Perkins Cash on Hand Edit Corrections and Perkins Cash on Hand
Update Due December 15, 2008 – DCL CB-Update Due December 15, 2008 – DCL CB-07-1707-17
Perkins Loan IssuesPerkins Loan Issues
NSLDS Technical Updates:NSLDS Technical Updates: Temporary Relaxation of Edits for Student’s Temporary Relaxation of Edits for Student’s
Academic Level – PK –2008-04Academic Level – PK –2008-04 Reporting of a New Deferment Type Code for Reporting of a New Deferment Type Code for
Military Reservists – PK –2008-03Military Reservists – PK –2008-03 Reporting Perkins Loans to NSLDS by Reporting Perkins Loans to NSLDS by
Separate Award Year – PK-2008-02Separate Award Year – PK-2008-02
Red Flag RulesRed Flag Rules
The rules are meant to help stop identity theft The rules are meant to help stop identity theft and to prevent people from committing fraud and to prevent people from committing fraud by using stolen identities.by using stolen identities. This is different from efforts to prevent data This is different from efforts to prevent data
breaches by having adequate data security in place, breaches by having adequate data security in place, which were the subject of the 2004 set of FTC which were the subject of the 2004 set of FTC rules on the Gramm Leach Bliley lawrules on the Gramm Leach Bliley law..
Red Flag RulesRed Flag Rules
Perkins Loan Schools are going to be Perkins Loan Schools are going to be considered “creditors” under the new rules and considered “creditors” under the new rules and will be covered. will be covered. schools who don’t make Perkins Loans are also schools who don’t make Perkins Loans are also
going to be considered creditors because they have going to be considered creditors because they have institutional loan programs, they accept payments institutional loan programs, they accept payments of tuition or fees over time, or they issue a debit of tuition or fees over time, or they issue a debit card to their students.card to their students.
Red Flag RulesRed Flag Rules
The rules will require that the schools have in place The rules will require that the schools have in place methods to discover when a stolen identity is being methods to discover when a stolen identity is being used and to prevent the person whose identity was used and to prevent the person whose identity was stolen from being harmed, once the theft comes to the stolen from being harmed, once the theft comes to the attention of the school. attention of the school.
schools should have in place appropriate procedures schools should have in place appropriate procedures that they will follow if an ID Theft “red flag” comes that they will follow if an ID Theft “red flag” comes up, such as preventing additional charges from being up, such as preventing additional charges from being placed on an account when they are notified that it placed on an account when they are notified that it may be subject to fraud. may be subject to fraud.
Red Flag RulesRed Flag Rules
http://www.nacubo.org/x10808.xmlhttp://www.nacubo.org/x10808.xml NACUBO’s memo on the Red Flag Rules.NACUBO’s memo on the Red Flag Rules.
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Questions?Questions?
Lori HartungLori HartungTodd, Bremer & Lawson, Inc.Todd, Bremer & Lawson, Inc.
[email protected]@TBandL.com