masfaa spring conference bay st. louis, ms june 17, 2010 federal update
TRANSCRIPT
MASFAA Spring ConferenceBay St. Louis, MS
June 17, 2010
Federal Update
Agenda• Title IV Program Budget• Student Aid Reform Bill• FSA Programs Update• Two Pells in an Award Year• Operational Considerations• Recent Regulatory and Guidance Changes
Title IV Program BudgetAid Available (in thousands)
FY 2009* FY 2010 FY 2011**(AY 09-10) (AY 10-11) (AY 11-12)
Pell Grant $ 28,213,300 $ 32,295,200 $ 34,834,300 (Max Award) $5,350 $5,550 $5,710 FSEOG $ 958,800 $ 958,800 $ 958,800 FWS $ 1,417,300 $ 1,170,800 $ 1,170,800 Perkins $ 1,106,100 $ 1,041,500 $ 2,609,200 LEAP $ 161,555 $ 161,555 ― ACG/SMART $ 864,000 $ 932,000 ― TEACH $ 72,300 $ 79,800 $ 93,200 Loans $ 96,516,200 $108,762,900 $116,393,200 TOTAL $129,309,555 $145,402,555 $156,059,500
* Includes Recovery Act funding ** President's FY 2011 Budget Request
Program
Student Aid Reform Bill (HR4872) Signed on March 30, 2010
• Pell Grant – $61 billion increase (includes $36 billion for yearly
increases)– $5,550 maximum award for 2010-11– Indexed to CPI starting 2014– Pell shortfall paid down except for $5.5 billion
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Student Aid Reform Bill (HR4872) Signed on March 30, 2010
• 100% Direct Lending as of July 1, 2010
‒Sub, Unsub, PLUS, Consolidation
‒No more FFEL first disbursements
‒Subsequent FFEL disbursements can be made
‒In-school consolidation – One year
6
What’s Not In the Bill
‒ No EFC Calculation Simplification
o Elimination of Assets
o All financial data from tax return
‒ No new Perkins Program
o Expansion of Program to more schools and more students
o Recall of existing loans to FSA
‒ Relaxation of Drug Conviction Provision
Student Aid Reform Bill (HR4872) Signed on March 30, 2010
Student Aid Reform Bill (HR4872) Signed on March 30, 2010
• Additional Funding for HBCU, Hispanic Serving Institutions, Tribal Colleges and Universities, and other MSIs receive additional funding
• American Graduation Initiative not included• Additional Funding for community colleges
(College Access College Grant) – Deadline for states to submit application is July 2, 2010
• $10 billion in deficit reduction
7
FSA Programs Update
American Opportunity Tax Credit
• Excludable (non EFA) income in needs analysis (line 49 on 1040 and line 31 on 1040A)
• Also refundable portion on line 66 on 1040 is excludable– Same as Hope and Lifetime Learning Tax Credits
9
NPRM To Be Released June 18, 2010(45 Day Comment Period)
• Foreign Schools
• Program Integrity
10
Effective 7/1/2011
Program Integrity NegReg Agenda
Definition of a high school diploma Ability to Benefit Misrepresentation by institutions Incentive compensation State authorization and institutional
eligibility Gainful employment in a recognized
occupation Definition of credit hour
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Program Integrity NegReg Agenda
Agreements between institutions of higher education Verification of information on FAFSA Satisfactory academic progress Retaking coursework Return of Title IV aid: Term-based module programs Return of Title IV aid: Taking attendance Disbursements of Title IV funds
12
Direct Loan Transition Statusas of April 29
Split Servicing
• ED realizes concern with students with split servicing
• Currently approximately 18% of FFEL loans are held by lenders.
• Process in place to review and address FFEL/DL portfolio
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New Exit Counseling www.nslds.ed.gov/nslds_FAP/secure/logon.jsp
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Students; www.nslds.ed.gov
EA March 29, 2010
Cohort Default Rates
Public Service Employees Loan Forgiveness
• Eligible borrower with DL (including PLUS and Grad PLUS)• FFEL borrowers gain eligibility with DL consolidation
– no reconsolidation of existing joint reconsolidated FFEL• Requires 120 monthly payments beginning October 1,
2007 (within 15 days of due date) – Does not have to be consecutive payments
• Full-time public service employees• 34 CFR 685.219
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Federal Perkins “Red Flag Rule”
• Electronic Announcement May 6, 2010• FTC delays Identify Theft Red Flag Rule
until June 1, 2010*• www.ftc.gov/redflagsrule
* EA June 14, 2010 – Another Red Flag enforcement delay until 12-31-10
Federal Perkins Cohort Default Rate
• June 30, 2009 rate posted eCampus-Based Report in April 2010
• National rate = 10.04% with $894 million in default
• Mississippi rate = 13.46% with 12.4 million in default
New Non-EFA Veterans Benefit
• Marine Gunnery Sergeant John D. Fry Scholarship for children of service members who die in line of duty after September 10, 2001
• EA August 13, 2009
Pell Reporting ChangesPell Reporting Changes• Effective 2010-11 award year
• Maximum number of days for Pell Advanced Funded schools to submit actual disbursements of “true” has been reduced from 30 days to 7 days.
• Same as currently required for other FSA programs
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Reprocessed 2010-11 ISIRs
• Electronic Announcement May 14, 2010 (and EA May 5, 2010)
• Based on Revised Pell Payment Scheduled (DCL P-10-03), new maximum EFC is 5273
• CPS reprocessing began May 18, 2010
Iraq/Afghanistan Dependent Update
• Electronic Announcement May 13, 2010• DoD/ED match commenced late April 2010• 2009-10 eligibility for zero EFC – 30 students
(25 schools to receive pass word protected file)• DoD match flag is 298 and COD “Post 9/11
Deceased Veteran Indicator” set to true• 2010-11 Iraq and Afghanistan Service Grant -
COD will implement later this year
Two Pells in One Award Year Funding Availability
• Schools will be able to view and draw down 2010-2011 Pell Grant Initial funds in G5 on Tuesday, May 25, 2010.
• COD will accommodate by May 26, 2010
Receiving up toTwo Pell Grants
During a Single Award Year
CFR: 690.67
Two Pells In An Award Year• Authorized by the Higher Education Opportunity Act
(HEOA).• If eligible, student able to receive all or a portion of a
second Scheduled Award within an Award Year.• Objective is to help needy students accelerate their
academic progress.• Effective for the 2009-2010 Award Year.
– Implementation by schools is not optional. – Students eligible for second Scheduled Award in 2009-
2010 must be paid.• Final Regulations Published October 29, 2009.
4
Two Pells: Student Eligibility • First Scheduled Award
– Student otherwise Pell Grant eligible.– Enrolled at any enrollment status.– Amounts received will count toward life-time
aggregate limit, if applicable.• Second Scheduled Award
– Student otherwise Pell Grant eligible.– Enrolled at least half-time.– Received 100% of first Scheduled Award.– Beginning with 2010-2011 Award Year, student must
demonstrate academic year acceleration.5
Acceleration• At least one credit or clock hour (or partial
hour if school uses partial hours) in the payment period must be attributable to the student’s next academic year.
• Not “grade progression”• Must be applied for any required
recalculation.• Gives meaning to statutory use of term
“accelerate”
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Acceleration
Applies beginning with the 2010-2011 Award Year‒ Cross-over period payment awarded from
upcoming year does not require counting hours because payment will be from first Scheduled Award.
‒ Hours earned in summer 2010 count toward acceleration later in 2010-11 Award Year
50
Transfer Students Options
• Assumption Method• Hour-earned Method• Receipt of Additional Information• School’s policy options:
– Student by student – Single method to all students in a program – Program by program
34 CFR 690.67(b)
Transfer Example – Assumption Method
• Receives 100% of 1st Schedule Award at School A then transfers to School B
• What should School B do under the Assumption Method? – Assume completed the credit or clock
hours in the 1st Academic Year
Transfer – Assumption Method
• Receives < 100% 1st Scheduled Award at School A, then transfers to School B
• How does School B determine eligibility?– Use Formula for credit/clock hours
Pell disbursed – School A * Credit/clock hours in AY – School BAmount of Scheduled Award at prior school
Transfer – Assumption Method
• Sample Formula for < 100 % received:
$4,900 disbursed at Prior * 24 in your AY$5,350 scheduled at prior school
= 21.9 hours Round down to 21 hours
Transfer – Hours Earned Method
• Hours Earned Method optional• Must have time period when hours
earned• Exclude AP, IB, testing out, life
experiences• Must attribute to the current award year
any credits/clock hours earned at other schools.
Transfer Students Options
• Receipt of additional information– During the payment period
•Adjust if necessary– After payment period ends
•No adjustment requiredXYZ University
Academic Transcripts
XYZ University
Academic Transcripts
34 CFR 690.67(b) 4
Special Circumstances
• Financial Aid Director may– Waive hours attributable to 2nd AY if
•Circumstances beyond student’s control•Individual basis determination
• Documentation always required
34 CFR 690.67(c)
Special Circumstances
• Waiver includes, but not limited to– Withdrawals – due to illness– Inability to register – classes not offered
• Waiver does not include– Withdrawals to avoid a bad grade– Not registering due to a particular
instructor
34 CFR 690.67(c)
Non-applicable credit or clock hours
• Eligibility for the 2nd Scheduled Award may not use– Advance Placement (AP) programs– International Baccalaureate (IB),– Testing out,– Life experiences or – Similar competency measures
34 CFR 690.67(c)
Crossover Payment Periods -
payment period thatcontains 6/30 and 7/1
(CFR 690.64)JUNE
JULY
2009-10
2010-11
2009-10 Crossover Transition
• If considered part of 09/10 award year– New regulations do NOT apply– Do not have to pay out of the award year that
produces the highest payment– Do not have to ensure hours attributable to 2nd
academic year– Must be at least half-time
• If considered part of 10/11– New Regulations apply
2009-10 Crossover Transition 2009-2010 Award Year
– If awarding second Scheduled Award from 2009-2010 (including summer 2010 cross-over) new regulations do not apply.
– Must develop 2010 cross-over written policy prior to July 1, 2010 based on HEOA, DCL GEN-08-12, and good faith.
2010-2011 Award Year– If awarding from 2010-2011 and beyond (including
summer 2010 cross-over) new regulations do apply.
2009-10 Crossover Transition Policy established on or after July 1, 2010
‒ Rules apply for both years–o Must pay higher of student’s 2009-2010 or
2010-2011 award.o If 2009-2010 higher, acceleration rule
applies, regardless of school’s policy. If student has not progressed to next
academic year, student not eligible for 2009-2010 award, therefore pay Pell from 2010-2011, if eligible.
Crossover PeriodsCrossover Periods• When October 29, 2009 regulation becomes
effective:– MUST assign a crossover payment period to award
year in which student receives greater payment at time payment is initially calculated*
– MUST reassign if subsequent information to initial calculation shows greater payment would result
• But not later than ED Pell processing deadline – 9-28-10 – MAY reassign if information received AFTER ED Pell
processing deadline but BEFORE Pell Admin Relief deadline
* 2009/10 crossover exempt if school treats as part of * 2009/10 crossover exempt if school treats as part of 2009/10 award year2009/10 award year
Two Pells: Crossover Payment Period • May be different award year for Pell than for
other Title IV aid.• Packaging issues
– For Pell, use EFC for the award year from which the student will be paid.
– For other aid, EFC and COA can be from the other year, but must be the same for those programs.
– Amount of Pell is EFA for other aid.– If loan in package, school may chose EFC and COA from
other year but, if campus-based also, EFC and COA must be same as loan.
Examples ofPayment from Two Scheduled Awards
CFR: 690.63(h)
2009-10 Two Scheduled Pell Awards(Summer as Header and Trailer)
New Rule: Up to Two Scheduled Awards per Award YearStudent’s Scheduled Award is $5,350 for the award year(Summer 2009 and 2010 are part of the 2009-10 award year)*
Fall 2009$2,675
Summer 2010$2,675
Summer 2009$2,675
2009-10 Award Year
Spring 2010$2,675
200% 2009-10 AY
* Policy written before July 1, 2010
Term Based Example
Spring 2010$2,675
Fall 2010$2,775
Fall 2009$2,675
Spring 2011$2,775
2009-10 Award Year
2010-11 Award Year
Summer 2011$2,775
Summer 2010$2,675
150% 2009-10 AY
150% 2010-11 AY
New Law: Up to 2 Scheduled Awards per Award YearAssume student’s 2009-10 Scheduled Award is $5,350 and $5,550 for 2010-11
New Law: Up to Two Scheduled Awards per Award Year 1500 clock hour program; AY = 900 hours/26 weeks Student’s Scheduled Award is $5,350 for the award year
450 hours/13 weeks$2,675
300 hours/8 weeks$1,645
450 hours/13 weeks$2,675
300 hours/8 weeks$1,645
2009-10 Award Year
2009-10 Award Year
160% 2009-10 AY
Clock Hour Example
Spring 201050% Paid9 HoursEarned
Fall 200950% Paid9 HoursEarned
First Scheduled Award
Summer 2010Enrolled in
6 HoursNOT ELIGIBLE
Second Scheduled Award
Six Hours to Prior Academic YearNo Hours for New Academic Year
Cannot pay second Scheduled AwardMay pay from 2010-11 Award Year
Assumes Academic Year defined as 24 hours
Semester Academic Year Progression
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Spring 201050% Paid6 HoursEarned
Fall 200950% Paid7 HoursEarned
First Scheduled Award
Summer 2010Enrolled in12 HoursELIGIBLE
Second Scheduled Award
Eleven Hours to Prior Academic YearOne Hour for New Academic Year
Pay 50% of Second Scheduled Award
Assumes Academic Year defined as 24 hours
Semester Academic Year Progression
55
Winter 201125% Paid9 HoursEarned
Fall 201025% Paid10 HoursEarned
First Scheduled Award
Spring 201134% Paid
12 Hours Earned
Assumes Academic Year Defined as 36 Hours
Quarter Academic Year Progression
Summer 2011Enrolled in 6 Hours
ELIGIBLE
Five Hours to Prior Academic YearOne Hour for New Academic Year
Pay 16% remaining of First Scheduled Award and 1% of
Second Scheduled Award
59
Spring 201150% Paid12 Hours
Completed
Fall 201050% Paid12 Hours
Completed
First Scheduled AwardFull-Time
Summer 2011Enrolled in
6 HoursELIGIBLE
Second Scheduled Award
Assumes Academic Year Defined as 24 hours
No Hours to Prior Academic YearSix Hours for New Academic Year
Semester Hours Completed
Spring 201150% Paid9 Hours
Completed
Fall 201050% Paid12 Hours
Completed
Summer 2011Enrolled in
6 HoursELIGIBLE
Second Scheduled Award
Assumes Academic Year Defined as 24 hours
Three Hours to Prior Academic YearThree Hours for New Academic Year
Semester Hours Completed
First Scheduled AwardFull-Time
Spring 201150% Paid6 Hours
Completed
Fall 201050% Paid7 Hours
Completed
Summer 2011Enrolled in12 HoursELIGIBLE
Second Scheduled Award
Assumes Academic Year Defined as 24 hours
Eleven Hours to Prior Academic YearOne Hour for New Academic Year
Semester Hours Completed
First Scheduled AwardFull-Time
Spring 201150% Paid9 Hours
Completed
Fall 201050% Paid9 Hours
Completed
Summer 2011Enrolled in
6 HoursNOT ELIGIBLE
Second Scheduled Award
Assumes Academic Year Defined as 24 hours
Six Hours to Prior Academic YearNo Hours for New Academic Year
Semester Hours Completed
First Scheduled AwardFull-Time
Summer 201050% Paid9 Hours
Completed
Fall 201050% Paid9 Hours
Completed
First Scheduled Award
Summer 2011Enrolled in
6 HoursELIGIBLE
Paid ½ time
2nd Scheduled Award
Assumes Academic Year Defined as 24 hours
Semester Hours Completed
Spring 2011Enrolled in
9 hoursELIGIBLE
Paid ¾ time
6 hours prior AY3 hours 2nd AY
0 hours prior AY6 hours 2nd AY
Assumes completed at least 6 spring hrs
Assume Summers part of 10/11 award year
First Scheduled AwardFull-Time
Summer 201050% Paid9 Hours
Completed
Fall 201050% Paid6 Hours
Completed
First Scheduled Award
Summer 2011Enrolled in
6 HoursELIGIBLE
Paid ½ time
2nd Scheduled Award
Assumes Academic Year Defined as 24 hours
Semester Hours Completed
Spring 2011Enrolled in
9 hoursNOT ELIGIBLE
0% paid
9 hours prior AY0 hours 2nd AY
0 hours prior AY6 hours 2nd AY
Assumes completed all spring hrs
Assume Summers part of 10/11 award year
First Scheduled AwardFull-Time
Summer 201050% Paid9 Hours
Completed
Fall 201050% Paid6 Hours
Completed
First Scheduled Award
Summer 2011Enrolled in
6 HoursNOT ELIGIBLE
0% paid
2nd Scheduled Award
Assumes Academic Year Defined as 24 hours
Semester Hours Completed
Spring 2011Enrolled in
9 hoursNOT ELIGIBLE
0% paid
9 hours prior AY0 hours 2nd AY
6 hours prior AY0 hours 2nd AY
Assumes completed only 3 spring hrs
Assume Summers part of 10/11 award year
First Scheduled AwardFull-Time
Two Scheduled Awards Same Payment Period
• Payment Period Award may included Payment from 1st Scheduled Award and 2nd Scheduled Award if– Student is eligible for 2nd scheduled (690.67) and– Payment due student > 1st scheduled award amount
• Calculated Payment = 1st Scheduled Award Balance+ Amount from 2nd Scheduled Award = Students Payment for Payment Period
Two Pells: Same Payment PeriodSummer
2009Enrollment
Status9 hours
Three-Quarter
Award Amount
$2,006
% of Scheduled
Award Used37.5%
Remaining Eligibility 162.5%
Fall 2009
12 hoursFull-time
$2,675
50%
112.5%
Spring 2010
12 hoursFull-time
$2,675 ($ 669 – from 1st
$2006 – from 2nd)
50%
62.5%
Operational Considerations
COD and Year-Round Pell • New field added to COD record
– Additional Eligibility Indicator (AEI)• School sets AEI to “true” on
origination record when awarding any part of second scheduled award
• AEI student will not trigger POP MRR but will trigger concurrent enrollment MRR
COD and AEI
Your Student Name Big Valley State University111111111101/20/10
Value = Yes or No
Updating COD and AEI
Click hear to access the AEI Update field
Step 1 :
Click: -Person -Pell -Award Detail -Update Award
John Q Jones Any University222222222 PellDOB 1/21/1988 10/11
Updating COD and AEI
Click on the box to set flag
Step 2 :
Must check the AEI box
to set the flagAnd receive your funds!$$$$$$$$
View the AEI Flag
Your Student Name Big Valley State University111111111101/20/10
Value = Yes or No
Additional Eligibility Indicator Checkbox
EDE Express
NSLDS and AEI on ISIR
• Added to ISIR record
• The valid content for these fields are:– Y = Student received additional Pell award
funds in excess of a single year’s award– N = Student received a single Pell award
New
2010-11
Final Reminders
• Schools can not ignore– Crossover payment periods– Intersessions
• Must pay eligible students• Must implement, regardless of software limitations
– Process manually, if necessary
Maximum Duration of Eligibility
• First-time Pell recipients– Beginning with 2008-09 and after – Pell eligibility limited to 18 semesters – Department equivalent is 9 scheduled
awards– 900% of life-time Pell eligibility– Students enrolled less than full-time will be
assessed at the fractional enrollment status– LEU Lifetime Eligibility Used flag
Maximum Duration of Eligibility
Fall 2009TQT
Fall 2010HT
Summer 2014FT
Fall 2014FT
Spring 2015FT
Fall 2008FT
Spring 2009FT
Spring 2010TQT
Summer 2010TQT
Student’s Pell disbursements based Percentage Used on enrollment status per payment period 787.5% (cumulative)
= 100%
Summer 2011HT
Fall 2011HT
Fall 2015FT
Summer 2015FT
200%
Spring 2016FT
Summer 2016FT
Fall 2016FT
112.5%
75%
150%
Spring 2017FT
Summer 2017FT
150%
=
=
=
=
=
2008-09*
2009-10
2014-15
2010-11
2015-16
2016-17
* First time received Pell
Recent Regulatoryand Guidance Changes
Recent Regulatory and Guidance Changes• Not-for-profit servicers sought – June 1, 2010• Untaxed unemployment compensation
(PJ EA May 21, 2010)• EA June 3, 2010 – Servicer Delinquency
Prevention Activities• DCL GEN-10-07 – Battered Immigrants-Qualified
Aliens eligible for Title IV• DCL GEN-10-08 – Institutional requirements for
combating unauthorized of use of copyrighted material
Recent Regulatory and Guidance Changes
• DCL GEN-10-09 – New textbook regulatory guidance
• DCL GEN-10-10 – Q&A on 100% DL (will be posted shortly)
• Federal Register (Vol. 75, No. 109, June 8, 2010) – ISIR/SAR processing deadlines
• TILA questions – 202-452-3667 (Federal Reserve Board Help Desk) or [email protected]
Fixed Rates for Loans Disbursed on or after 7-1-2006
Loan Type Grade Level First Disbursed Between 7-1-2009 and 6-30-2010
First Disbursed Between 7-1-2010 and 6-30- 2011
Subsidized Loans Undergraduate
Graduate
5.60%
6.80%
4.50%
6.80%
Unsubsidized Loans Undergraduate
Graduate
6.80%
6.80%
6.80%
6.80%
PLUS Loans Parent and Grad Student
7.90% for DL and 8.50% for FFEL
7.90% for DL and 8.50% for FFEL
Variable Rates for Loans Disbursed Between 7-1-1998 and 6-30-2011
Contact Information
Contact me at:
Michael C. [email protected]
Contact my supervisor at:
Thomas [email protected]