Session # 11

General Provisions Regulations Package

Michelle BeltonBrian Kerrigan

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History

• Negotiated RulemakingFederal Register Notice - Aug. 18, 2006Regional hearings

Berkeley, CA - Sep. 19, 2006 Chicago, IL - Oct. 5, 2006 Orlando, FL - Nov. 2, 2006 Washington, DC - Nov. 9, 2006

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History (continued)• Four negotiating committees were

established:General ProvisionsLoansAcademic Competitiveness & National

SMART GrantsAccreditation

• Negotiations from December - June

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General Provisions Package• Consensus reached • August 8, 2007 NPRM:

reflected the proposed regulatory language agreed to by committee

22 public comments received by end of comment period (September 7, 2007)

• Final rules: November 1, 2007• Effective date:

July 1, 2008 Early implementation

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General Provisions Package• Definitions

Professional degreeGraduate or professional studentUndergraduate studentFull-time studentThree quarter-time studentHalf-time student

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General Definitions

• Professional DegreeAbove bachelor’s degreeGenerally requires professional

licensureList of examples, including J.D., D.V.M.,

D.D.S., Pharm. D.

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General Definitions• Graduate or professional student

Two key points: Grad/Prof students cannot receive

undergraduate level aid and graduate level aid at same time

Institution can change a student’s status from “undergraduate” to “graduate or professional” once a student has completed at least 3 years at undergraduate level.

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General Definitions• Undergraduate student

Key Points: For Perkins, FFEL, and DL programs,

any student who takes courses at or below the baccalaureate level is an undergraduate

For Pell, ACG, SMART, and FSEOG a student is only an undergraduate if she is pursuing her first bachelor’s degree or below

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General Definitions• Undergraduate student (cont’d)

For Pell, a student who has a bachelor’s and is studying to earn a state-required teaching certification could be an undergraduate

First three years of a dual degree program students are undergraduates

First four years of a program lasting longer than five years that leads to a bachelor’s degree.

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General Definitions

• Full-time studentMoved calculation from Pell Grant

regulationsAlso clarified definition of full-time

student for correspondence programs

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General Definitions

• Half-time student & Three-quarter time studentExisting definitions in the Pell Grant

program regulations were moved to the General Provisions regulations

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General Provisions Package

• Other “definitions”Independent study for direct

assessment programsSubstantially equal in lengthSuccessfully completes

• Treatment of aid when recipient does not begin classes

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Direct Assessment Programs

• Independent StudyOnly applies to Direct Assessment

ProgramsCourse of study with predefined

objectives determined by student & professor

Requires regular and substantive interaction

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Treatment of Aid when recipient does not begin classes

• Key PointsConsolidated Return to Title IV

requirements in General Provisions.Must return Title IV funds used to pay a

student’s expenses within 30 days of discovering a student has failed to attend class.

Institutions restricted from disbursing funds to any student who they know will not be starting classes (i.e., a student who has been expelled)

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Treatment of Aid when recipient does not begin classes

• Key Points (continued)Institutions not required to return funds

that are disbursed directly to a student in a study abroad program or who is attending a foreign institution

Institutions must notify lenders to issue a final demand notice to these students

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General Provisions Package• Payment period

Credit hour with standard terms or terms that are substantially equal

Credit hour with terms that are not substantially equal

Credit hours w/o terms or clock hoursCohort default rate exemptionExcused absencesRe-entry w/i 180 daysRe-entry after 180 days or transfer

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Payment Period• For credit hour programs with standard

terms or terms that are substantially equal, it’s the term

• For credit hour with terms that are not substantially equal—Grants and Perkins, it’s the termFFEL and DL, it’s ½ the credit hours and

½ the weeks• For credit hours w/o terms or clock hours,

it’s ½ the (credit or clock) hours and ½ the weeks

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Payment Period• When the cohort default rate exemption

applies, it’s the loan period

• Excused absences count if—Written policy# does not exceed the lesser of

accrediting agency policy, State agency policy, or 10%

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Payment Period• Re-entry w/i 180 days, stay in the same payment period

• Re-entry after 180 days or transfer –calculate new payment periods, orremain in the same payment period,

Continuous enrollment, Substantially similar coursework, Substantially equal payment periods, Little or no changes in charges, & Credits are accepted in new program

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General Provisions Package• Minimum period for loan

Credit hour with standard terms or terms substantially equal, with no term less than 9 weeks

Clock hours or credit hours w/o standard terms and w/o terms that are substantially equal with no term less than 9 weeks

Transfer studentsCompleting one program and

immediately starting another

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Minimum Period for a Loan• For credit hour program with standard

terms or terms substantially equal, with no term less than 9 weeks, it’s the term

• For clock hours or credit hours w/o standard terms and w/o terms that are substantially equal with no less than 9 weeks, it’s the lesser of—The length of the program (or the

remaining portion of the program), orThe academic year

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Minimum Period for a Loan• For transfer student, it’s the remaining

portion of the program or academic year (The student can get the remaining balance of the annual loan)

• For completing one program and immediately starting another, it’s the remainder of the academic year (The student can get the remaining balance of the annual loan limit at the loan level of the new program)

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General Provisions Package• Academic year progression

Credit hour programs with standard terms or terms substantially equal, with no term less than 9 weeks

Credit hour program with non-standard terms that are not substantially equal or each term is not at least 9 weeks or credit hours w/o terms

Clock hour programs

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Academic Year Progression

• For credit hour programs with standard terms or terms substantially equal, with no term less than 9 weeks, the student progresses when the academic year calendar period elapses

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Academic Year Progression

• For credit hour programs with non-standard terms that are not substantially equal or each term is not at least 9 weeks or credit hours w/o terms, the student progresses at the later of—Completion of the weeks, orCompletion of the coursework

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Academic Year Progression

• For clock hour programs, the student progresses at the later ofCompletion of the weeks, orCompletion of the clock hours

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R2T4 Changes• Confirmation not needed for PWD of grant

funds• PWD of grant funds asap but no later than

45 days after the institution determines the student withdrew

• PWD of loan funds asap but no later than 180 days after the institution determines the student withdrew

• Use of the payment period that ends later (see next slide)

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R2T4• For credit hour programs with non-standard

terms that are not substantially equal in length—if the payment period is used for calculation and the student gets: 1) grants and/or a Perkins (where the payment period is the term), and 2) an FFEL or DL (where the payment period is ½ the hours and ½ the weeks),Use the payment period that ends later,

andAttribute funds to the payment period that

ends later

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R2T4 ChangesAcademic Year is 24 credit hours & 30 weeksTerms: 1 = 10 wks, 2 = 6 wks, 3 = 14 wks.

FFEL (DL) PP1 FFEL (DL) PP2 15 weeks 15 weeks

WD at day 50

10 weeks 6 weeks 14 weeks Grant PP1 Grant PP2 Grant PP3 (Perkins) (Perkins) (Perkins)

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R2T4 Changes• The WD was at day 50 (which is in both

the FFEL/DL PP1 and the Grant/Perkins PP1)

• Assume student got an FFEL and a PellFFEL/DL PP1 = 15 weeks*Grant/Perkins PP1 = 10 weeks

• Determine the payment period that ends later* and use it

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R2T4 Changes

PP 1 = 10/30 X $4,310 = $1,437PP 2 = 6/30 X $4,310 = $ 862*PP 3 = 14/30 X $4,310 = $2,011

• Attribute the portion of Pell from the Pell PP 2 to be included as Aid That Could Have Been Disbursed (as if Pell was disbursed for the FFEL PP 1)

(Attribution for 5 wks of Pell from PP 2 is: 5/6 X $862* = $718)

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R2T4 Changes

• Total Title IV Aid disbursed or could have been disbursed for R2T4 calculation:FFEL PP 1 = $1,750Pell PP 1 = $1,437

Portion from Pell PP 2 = $ 718Total $3,905

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Calculation of a Pell Grant• Use of Formula 1

Credit hour programs12 hours for full-time per termAt least 30 weeks

In 2 semesters or trimesters (fall through spring) or 3 quarters (fall, winter, spring) with no overlapping terms

Any 2 semesters or trimesters or 3 quarters that have periodic starts (e.g., monthly), where students are not in overlapping terms

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Calculation of a Pell Grant• Credit hour w/o terms and clock hour

programs (Formula 4)Scheduled Pell x the lesser of—

Hours in the payment periodHours in the academic year

ORWeeks in the payment periodWeeks in the academic year

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Calculation of a Pell Grant• Correspondence programs w/o terms

(Formula 5)Half-time amt x the lesser of—

Hours in the payment periodHours in the academic year

ORWeeks in the payment periodWeeks in the academic year

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Calculation of an ACG/SMART• Use of Formula 1

Credit hour programs12 hours for full-time per termAt least 30 weeks

In 2 semesters or trimesters (fall through spring) or 3 quarters (fall, winter, spring) with no overlapping terms

Any 2 semesters or trimesters or 3 quarters that have periodic starts (e.g., monthly), where students are not in overlapping terms

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Calculation of an ACG/SMART

• Credit hour w/o terms and clock hour programs (Formula 4)Scheduled award x the lesser of—

Hours in the payment periodHours in the academic year

ORWeeks in the payment periodWeeks in the academic year

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General Provisions Package• Cash Management

Issuing a checkElectronic disbursementsMinor prior-year chargesLate disbursementsReturning unclaimed fundsLoan cancellation notice and

confirmation of a loanExcess cash

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Cash Management

• Issuing a checkIssued on date mailed or date student

notifiedStudent has 21 days to pick up checkAfter 21 days, school must mail check,

initiate EFT or return the funds

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Cash Management

• Electronic DisbursementsSchool may have a policy requiring

students to have bank accountIf student does not have or want an

account, school must disburse funds in another way

If school opens an account or actively assists student, certain conditions apply

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Cash Management● Electronic Disbursements

Must obtain student’s written consent to open the account

Inform student of terms and conditionsMay not make any claims against the

funds in the accountNo cost to student for opening account

or receiving debit or stored-value card

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Cash Management

● Electronic DisbursementsEnsure that student has convenient

access to branch office or ATM, no fees for cash withdrawals

School may not limit use of the card to certain vendors

May not market or portray card as a credit card

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Cash Management• Minor prior-year charges

Amount increases to not more than $200

Do not need to get student’s permission for tuition and fees or room and board

Cannot use current year funds to cover prior-year charges of more than $200

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Cash Management

• Late disbursementsLate disbursement period extended

from 120 to 180 daysNo late disbursements after 180 days

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Cash Management• Returning unclaimed funds

Uncashed check must be returned no later than 240 days after check issued

If check or EFT is returned, can make additional attempts to re-disburse

Attempts must be made no later than 45 days after EFT or check is returned

Title IV funds never escheat to the state

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Cash Management• Loan notice and confirmation

If school obtains affirmative confirmation, current loan notice procedures apply

Without confirmation: Must notify student not earlier than

30 but no later than 7 days after crediting account

Must give student 30 days to cancel loan or loan disbursement

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Cash Management• Loan notice and confirmation

Affirmative confirmation is a process where a school obtains written confirmation of the types and amounts of title IV loans the student wants for an award year

Must be obtained before loan funds are disbursed

Includes signed award letters, web-based process for accepting awards

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Cash Management• Excess Cash

Includes any title IV funds received from ED that are deposited or transferred into a federal account as a result of an award cancellation, adjustment, or recovery

Only the 1% tolerance option is retainedFinding may trigger cash monitoring or

reimbursement

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Contact Information

We appreciate your feedback and comments. We can be reached at:

• Michelle.Belton@ed.gov (202) 502-7821• Brian.Kerrigan@ed.gov (202) 219-7058• Fax Number (202) 502-7874