Federal Update

1
Federal Update

• GHEAC Annual Conference
• March 4-5, 2003

David Bartnicki 404-562-6290 david.bartnicki_at_ed.g
ov
2
Electronic Initiatives
3
eZ-Audit

• eZ-Audit will provide schools with a paperless
  single point of submission for financial
  statements and compliance audits through the web,
  as of April 1, 2003.
• A designee from your school will simply sign on
  to eZ-Audit (www.ezaudit.ed.gov), enter summary
  audit and financial data directly from your
  report into a web form, attach an electronic
  version of the report, and hit the submit button.
  
• Electronic Announcements 2/5 2/19 (eZ-Audit
  User Guide coming soon!)
• Questions - 1-877-263-0780 fsaezaudit_at_ed.gov

4
Common Origination and Disbursement

• COD replaces the Recipient Financial Management
  System (RFMS) and the Direct Loan Origination
  System (DLOS) starting in 2002-2003 and will
  allow full participants ability to submit
  campus-based data EVENTUALLY
• ALL SCHOOLS process data via COD in 2002-2003
• All schools must be full participants by
  2004-2005
• Pell Rounding
• Effective 12/17/2002 - if a student's Total
  Payment Ceiling (Origination Award Amount)
  includes pennies, a school can report exact
  pennies or round up to the nearest whole dollar
  (12/20/02 electronic announcement)

5
Common Origination and Disbursement

• COD Website
• cod.ed.gov
• Set up a system administrator
• Send in specific info on school letterhead
• Set up additional users
• View, update, reports, change admin. options
• Electronic Ann. 6/3/02
• Advanced pay schools Pell
• Though you can submit disbursement records up to
  30 days prior to disbursement date, COD provides
  disbursement data to GAPS no earlier than 7 days
  prior to disbursement date (may take a couple of
  days to show up in GAPS)

6
Common Origination and Disbursement

• 2003-2004 modifications
• EDExpress
• Full Participant in 2003-2004
• Software Modified to support XML Common Record
• Users still need to contact COD customer service
• Pell Grant Changes
• New Pell Verification Status Codes
• S Selected, but Not Verified
• Blank Not Selected
• School/Vendor Testing February/March 2003
• System Start Up April 2003
• Notify COD customer service if you want to be a
  full participant for 03/04 by March 1, 2003
  (Elec. Ann. 10/29/02)

7
Common Origination and Disbursement

• IFAP Website (www.ifap.ed.gov)
• Common Origination and Disbursement page
• Announcements and Frequently Asked Questions
• COD Technical Reference
• Full Participant Implementation Guide
• Phase-In Participant Information
• COD Testing Guide
• COD Customer Service Telephone Numbers
• 1-800-474-7268 for Pell Grant Assistance
• 1-800-848-0978 for Direct Loan Assistance
• Email questions to CODSupport_at_acs-inc.com

8
FSA Assessment Modules(Self-Evaluation Tool)

• Tools to prevent and/or identify compliance
  issues
• Series of questions/comments outlining major
  requirements/policies needed to properly
  administer the Title IV programs (checklist,
  exercises, Q As, description boxes who, what,
  when, where, how)
• Updated with hyperlinks to Regs and the Student
  Financial Aid Handbook
• Interactive and noninteractive modules
• All modules have printing options

9
Four Categories

• Students
• Student eligibility, Awarding aid, SAP,
  Verification
• Schools
• Institutional eligibility, Consumer information,
  Recertification, Change in ownership, Default
  Management
• Managing Funds
• Disbursing aid, Reporting/Reconciling, Fiscal
  management, R2T4, Perkins due diligence, Perkins
  awarding and disbursements, FWS, FSEOG
• Campus Needs
• Automation, Administrative capabilities (policy
  and procedure manual activity)

10
FSA Assessment ModulesEnhancements

• New module formats (easier to use)
• helpful icons, Q As, activities, color codes
• New modules Verification, Default Management,
  Perkins awarding and disbursing, FWS, FSEOG
• Will soon be an ED supported website
• Helpful hints and trouble shooting tips
• Technical assistance resources
• Effective Practice database
• Management Enhancement Worksheet
• IFAP (ifap.ed.gov tools for schools)
• Schools Portal (fsa4schools.ed.gov resources
  and training)

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Quality Analysis (Verification)Tool

• FSA designed the QA Tool to help schools analyze
  FAFSA application information reported on the
  ISIR.
• Users will import ISIR records into the tool and
  then use queries and specialized reports to
  obtain aid applicant data for illuminating
  problematic areas, zeroing in on specific EFC
  ranges, data elements, and populations.
• School are able to use a series of reports that
  indicate how well their verification procedures
  are working
• Develop verification criteria that fit its
  particular population
• Learn which application errors occur locally and
  educate students and parents about them
• Identify and eliminate verification practices
  that take time but make little or no difference
  in final awards
• IFAP (ifap.ed.gov tools for schools)
• Schools Portal (fsa4schools.ed.gov resources
  and training)

12
New Publications
13
Federal Registers
14
Loan Issues Program Issues

• NPRM 8/6/02 (Loan Issues)
• NPRM 8/8/02 (Program Issues)
• Final Regs combined both issues
• Effective date 7/1/03 (except GEAR UP
  regulations become effective 12/2/03)
• ALL provisions can be implemented as of 11/1/02
• Need to use alternative methods to capture
  correct data until new forms are developed
• Must wait for Perkins MPN to be approved
• Required to take Attendance provision used for
  all students who withdraw on/after schools
  implementation date
• Leave of Absence provision used for all students
  that are granted a LOA on or after the schools
  implementation date

15
Loan Issues - FFEL, DL and Perkins

• Rehabilitation of Defaulted Loans
• Exclude from rehabilitation defaulted Perkins,
  FFEL and Direct Loans on which a judgment has
  been obtained
• Allows for borrower subject to a judgment ability
  to regain eligibility at loan holder discretion
  (at least 6 consecutive monthly payments)
• Clarify voluntary payments
• Promissory Note Retention
• If a promissory note was signed electronically it
  must be stored electronically in accordance with
  record retention requirements

16
Loan Issues - FFEL, DL and Perkins

• Economic Hardship deferments
• Use the borrowers actual monthly payment amount
  if the loan is scheduled to be repaid in 10 years
  or less or a monthly payment amount on a 10-year
  repayment schedule if the borrowers repayment
  schedule is longer than 10 years
• Initial and Exit Counseling
• School need not provide the counseling, but must
  ensure that it is provided
• Require only disclosure of average anticipated
  repayment amounts (initial and exit)
• Provide borrowers with information about
  availability of NSLDS (website, 800 number)

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Loan Issues FFEL and DL

• Loan Limits
• A school may not link separate, stand-alone
  programs to allow students to be eligible for
  higher annual loan limits
• A student that has completed the 1st academic
  year of a program that is more than one academic
  year, but less than two academic years in length,
  may receive a prorated loan at the 2nd year level
  for the final portion of the program
• Unemployment Deferment
• Borrower can provide written certification (can
  be electronic) that 6 attempts to secure
  employment were made and they have registered
  with a local employment agency without providing
  detailed information
• Consolidation
• If a consolidation loan repaid a PLUS loan
  obtained for a student who died, the portion of
  the consolidation loan attributable to that PLUS
  loan will be discharged.
• Discharge of the applicable portion of a joint
  consolidation loan if one of the borrowers dies,
  becomes totally and permanently disabled or
  qualifies for forgiveness under the teacher loan
  forgiveness program

18
Loan Issues Perkins

• Master Promissory Note
• Provides for use of a Perkins MPN
• Write-Offs
• Allows an institution to write off account
  balances of less than 25, and if the borrower
  has been billed for at least 2 years, balances of
  less than 50
• A borrower whose balance has been written off is
  relieved of all repayment obligations
• Transfer of Loan Fund
• Eliminate the provision allowing an institution
  to transfer its Perkins loan portfolio to another
  institution

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Loan Issues Perkins

• Borrower Repayment
• An institution is required to coordinate
  borrowers monthly payments with other
  institutions only if requested by borrower
• This requirement must be explained during the
  exit counseling
• Copies of Promissory Notes
• Eliminate school requirement to provide borrower
  with a copy of the signed promissory note (unless
  requested by borrower)
• Late Charges
• Schools have the option of assessing late charges
  (consistently imposed on borrowers with overdue
  payments)
• Credit Bureau Reporting
• Institution must report an account as in default
  to a national credit bureau when borrower does
  not respond satisfactorily to institutions
  billing procedures

20
Loan Issues Perkins

• Litigation
• Review accounts for litigation once every 2 years
  
• 500 threshold to determine if required to
  litigate
• Assignment of Loans
• If a borrower is eligible for a disability
  discharge, the school must assign the loan to the
  Department
• Optional for the Department to require an
  institution to reimburse the Perkins fund if an
  assigned loan is unenforceable due to an act or
  omission by the institution

21
Loan Issues FFEL

• Definition of Lender
• Loans held in trust by a trustee lender are not
  part of the trustee lenders consumer credit loan
  function
• Repayment Requirements
• Increases first payment due date for a borrower
  that enters initial repayment or reenters
  repayment from 45 to 60 days
• If a lender receives an updated enrollment status
  date that is within the same month and year as
  the date previously reported, the lender may use
  the previously reported date
• A borrower does not have to provide a written
  notice to extend a repayment schedule up to the
  minimum of 5 years

22
Loan Issues FFEL

• Forbearance
• Allows a lender to grant a discretionary
  forbearance without a written agreement (must
  send the borrower a notice confirming the
  agreement within 30 days)
• Lender must contact a borrower with a forbearance
  once every 6 months (up from 3) and provide
  specific data on outstanding debt
• Lender can grant a discretionary administrative
  forbearance for a borrower impacted by a natural
  disaster, or local or national emergency
• Sovereign Immunity
• A guaranty agency that is a State agency and does
  not assign to other guaranty agencies loans
  affected by bankruptcy is not required to file a
  proof of claim on loans it holds and may instruct
  lenders not to file proof of claims on loans it
  guaranteed
• Claims Paid on Disability Discharges
• Guaranty agency must pay within 90 days (up from
  45)

23
Loan Issues Direct Loans

• Cohort Default Rate
• Borrowers included in a proprietary,
  non-degree-granting institutions cohort who have
  been repaying their loans under the Direct Loan
  Programs income-contingent repayment plan for
  360 days with scheduled payments less than 15
  dollars per month and less than the amount of
  interest accruing on the loan, would not be
  considered to be in default when calculating the
  institutions cohort default rate
• Expiration of MPN
• MPNs processed on or after July 1, 2003 would
  expire on the earliest of
• The date the school or Department receives
  borrower written notification that no more loans
  can be made under the MPN
• One year after the date the borrower signed the
  MPN or date Department received MPN if no
  disbursements made
• 10 years after the date the borrower signed the
  MPN or date Department received MPN

24
Program Issues

• Branch Campus
• 2-year certification requirement applies to
  branch campuses of proprietary institutions of
  higher education and postsecondary vocational
  institutions (schools can be more than one type)
• Change of Ownership
• Definition of family expanded to include
  grandchildren, a spouses children and
  grandchildren and family members as a result of
  marriage
• Excluded transactions include transfers of
  ownership/control (partnership/corporation/proprie
  torship) to family members, OR upon death or
  retirement to a person that held an ownership
  interest and management role at the school for at
  least 2 years (must report change to Department)

25
Program Issues

• Definition of Academic Year
• Eliminates the 12-Hour rule for nonstandard and
  nonterm credit hour programs
• Week of instructional time is the same for all
  types of programs (one-day rule)
• Payment Periods
• Students required to complete one-half the weeks
  in the academic year or program, as well as,
  one-half the academic coursework in credit hour
  nonterm programs
• Students in clock hour or credit hour nonterm
  programs that withdraw but return to the same
  program at the same school within 180 days of the
  original withdrawal, are considered to still be
  in the original payment period and eligible for
  any aid that had been returned

26
Program Issues

• Payment Periods cont.
• Students in clock hour or credit hour nonterm
  programs that withdraw but return to the same
  program after 180 days, or transfer, within any
  time frame, into another program either at the
  same school or at another school would start new
  payment periods based upon the remainder of the
  program that the students have to complete (if
  the remainder is one-half of an academic year or
  less, the remaining period would constitute one
  payment period)
• Incentive Payments - 12 safe harbor activities
• 1.) 2 salary adjustments within a 12-month period
  to covered school employees (cannot be based
  solely on the number of students recruited,
  admitted, enrolled, awarded financial aid)
• one cost of living increase within a 12-month
  period to all full-time employees not considered
  an adjustment

27
Program Issues

• Incentive Payments (12 safe harbor activities)
  cont.
• 2.) Payments based upon the enrollment of
  students in programs that are NOT Title IV
  eligible
• 3.) Payments for securing business contracts to
  provide education/training to various companies
• The company must pay 50 or more of tuition and
  fees
• Cannot be based on the number of company
  employees enrolled or the amount of revenue
  generated
• Institutional representative cannot have any
  contact with the company employees
• 4.) Profit-sharing and bonus payments to
  substantially all full-time institutional
  employees (or within an organizational level)
• Similar payments or based upon same salary
  percentages

28
Program Issues

• Incentive Payments (12 safe harbor activities)
  cont.
• 5.) Payments based upon students completing a
  program, or completing one academic year of
  credit (at your institution) for a longer program
• 6.) Payments for clerical pre-enrollment
  activities
• Soliciting students for interviews is considered
  recruitment
• 7.) Payments to supervisors who do not directly
  manage employees that are involved in
  recruitment, admissions, enrollment, or financial
  aid
• 8.) 100 token non-cash gift to alumnus or
  students annually
• 9.) Profits based upon an employees ownership
  interest
• 10.) Payments to a service provider for
  Internet-based recruitment and admission services
  

29
Program Issues

• Incentive Payments (12 safe harbor activities)
  cont.
• 11.) Payments to third parties for services other
  than recruiting, admissions, enrollment or
  financial aid services
• 12.) Payments to third parties for recruiting,
  admissions, enrollment or financial aid services
  as long as compensation is based upon the same
  limitations that apply to the institution
• Institutions Required to take Attendance
• Institution is considered required to take
  attendance if an outside entity specifically
  requires attendance taking
• If only required to take attendance for a portion
  of students, attendance records would only be
  required for those students
• If required to take attendance for a limited
  period of time, attendance records would only be
  required for the limited period of time

30
Program Issues

• Institutions Required to take Attendance cont.
• If an institution administratively withdraws a
  student from all classes, the student officially
  withdrew as of the date of the administrative
  withdrawal
• If through a census on a certain date, all of a
  students instructors indicate that the student
  is no longer enrolled, the student is considered
  to have officially withdrawn as of the census
  date
• Leaves of Absence (LOA)
• Allows multiple LOAs, as long as the total number
  of days for all leaves do not exceed 180 days
  within a 12-month period
• Requires (via school LOA policy) student to state
  leave reason

31
Program Issues

• Leaves of Absence (LOA)
• Clarifies that if a student returns from a LOA
  and repeats prior coursework -
• student cannot incur any additional charges
• Preparatory/repeated coursework not eligible for
  Title IV
• For R2T4 purposes, still considered to be on a
  LOA until the student starts attendance where the
  LOA began, except in a clock hour or nonterm
  credit hour program, the student need not
  complete the exact same coursework he or she
  began prior to the leave
• Overpayments
• Students not liable for Perkins or Title IV grant
  overpayments that are less than 25
• Student is not liable for an overpayment if the
  school is liable
• Provide students with an opportunity to object to
  any overpayment determination

32
Program Issues

• Ability to Benefit Tests
• Eliminates the 12 month expiration rule for ATB
  tests
• School must obtain the results of an approved ATB
  test from the test publisher or assessment center
  
• Late Disbursements
• Increase late disbursements from 90 to 120 days
  (applies to post-withdrawal disbursements as
  well)
• The Department can approve late disbursements
  beyond 120 days if the student is not at fault
• School must make or offer a post-withdrawal
  disbursement
• School must make or offer a late disbursement to
  a student that completed a payment period or
  period of enrollment

33
Program Issues

• Late Disbursements cont.
• Eliminates the SAR/ISIR requirement for a late
  disbursement of a PLUS loan (student must still
  meet all eligibility rules)
• Students eligibility for a late Pell Grant
  disbursement would be based on the Department
  processing a SAR/ISIR with an official EFC while
  the student was still eligible (still have to
  receive SAR/ISIR before actual disbursement)
• Notices and Authorizations
• Eliminates the requirement that an institution
  confirm the receipt of a notice sent
  electronically (crediting loan funds)

34
Program Issues

• Timely Return of Funds
• Must return funds within 30 days after the date
  of the institution determined the student
  withdrew
• Funds are returned when
• deposited in Federal funds account (i.e.
  Perkins),
• EFT transfer initiated,
• electronic transaction with FFEL lender
  initiated, OR
• a check is issued (must be endorsed within 45
  days)
• School can ask the Department to reconsider a
  finding of returning funds late due to
  exceptional circumstances or auditor/reviewer
  error (must show would not have exceeded the 5
  threshold had it not been for the exceptional
  circumstances or error)

35
Program Issues

• Timely Return of Funds cont.
• Letter of Credit (LOC) is due 30 days after the
  Department, IG, or guaranty agency issues a
  preliminary report with an error of more than 10
  (if error rate is 10 or less, LOC would be due
  30 days after the final report, if required)
• School not required to submit a LOC of less than
  5,000 (must have cash reserves of at least
  5,000)
• Department considers an institution that makes 2
  late returns to still be in compliance with the
  reserve standard
• FWS at For-Profit Schools
• Expand definition of student services to include
  job placement, assisting instructors in
  curriculum related activities (i.e. teaching
  assistant) and security (still require
  non-community service jobs to provide student
  services that are directly related to the FWS
  students training or education)

36
Program Issues

• FWS at for-Profit schools cont.
• A service would be considered a student service
  if the service provides a benefit either directly
  or indirectly to current students
• Facility maintenance, cleaning, purchasing, and
  public relations jobs are NOT considered student
  services
• Work in admissions or recruitment still
  prohibited
• GEAR UP Program
• Eliminate requirement that an institution award
  student financial assistance in an established
  order for students who are eligible for a GEAR UP
  scholarship
• A GEAR UP scholarship, along with Title IV aid or
  other assistance, may not exceed the students
  Cost of Attendance

37
Dear Colleague Letters
38

• GEN-02-10 (Nov. 02)
• Unless a school is specifically informed
  otherwise, all schools participating in the FFEL
  or Direct Loan programs that are located in the
  United States may allow their student and parent
  borrowers to use the multi-year feature of the
  MPN. (Foreign schools need to get Dept. approval)
• Effective for FFEL loans certified by a school
  on or after 3/1/2003
• Effective for 2003-2004 Direct Loans processed
  after the 2.0 Release of the Common Origination
  and Disbursement System
• Institutions, lenders and borrowers are not
  required to use the multi-year feature of the MPN
  
• Will be extended to the use of the Perkins MPN

39

• GEN-02-11 (Nov. 02)
• The Department considers that a home-schooled
  student is beyond the age of compulsory school
  attendance if the State in which the institution
  is located does not consider the student truant
  once he or she has completed a home-school
  program.
• Under the student eligibility provisions of
  section 484(d)(3) of the HEA, a student who does
  not have a high school diploma or GED is eligible
  to receive Title IV, HEA program assistance if
  the student "completes a secondary school
  education in a home school setting that is
  treated as a home school or private school under
  State law."
• An institution may accept a home-schooled
  student's self-certification that he or she
  completed secondary school in a home school
  setting, just as it may accept a high school
  graduates self-certification of his or her
  receipt of a high school diploma.

40

• GEN-03- 02 (Jan. 03)
• (G-03-344
  L-03-238)
• Federal Family Education Loan (FFEL) Program
  loan holders must respond to Consolidation Loan
  verification requests within 10 business days.
• Loan holders must, within 10 business days
  after receiving a request for loan
  certification, provide the requesting lender
  with the requested certification information or
  a reason why it is unable to provide the
  information.
• 34 CFR 682.209(j) 34 CFR 685.220(f)(1)(i)

41

• GEN-03-03 (Feb. 03)
• (G-03-345
  L-03-239)
• FFEL PLUS MPN
• Designed for a parent borrower to use as a
  multi-year note for one dependent student
• When must a new MPN be signed?
• Different lenders (unless result of a merger or
  acquisition, or if the earlier loans are sold and
  the acquiring lender assumes the right to offer
  subsequent loans under the PLUS MPN)
• A different parent chooses to borrow a PLUS Loan
  for the same dependent student
• A separate PLUS MPN must be completed for each
  dependent student
• At the borrower, school or lenders request

42

• GEN-03-03 Cont.
• Each loan received under a PLUS MPN is a
  separate and distinct loan. The terms (i.e.,
  interest rates, fees) applicable to each loan are
  dependent on the terms in effect at the time each
  loan is made.
• Before making each PLUS Loan, the parent must
  indicate to either the school, the guarantor, or
  the lender the PLUS Loan amount that he or she
  wants to borrow which can be obtained on
• The school certification form
• Separate PLUS loan amount request form
• Parent response section on the institutions
  financial aid award letter
• Documented telephone or electronic requests

43
GEN-03-03 Cont.

• Expiration Conditions
• date the lender receives written notification
  from the parent borrower asking that a previously
  signed PLUS MPN no longer be used
• Twelve months after the date the original PLUS
  MPN was signed if no disbursements were ever made
  under that MPN
• Ten years from the date the parent signed the
  PLUS MPN, or the date the lender receives the
  PLUS MPN
• PLUS Credit Report
• By signing the PLUS MPN, the parent applicant
  acknowledges that the lender will review the
  parents credit history
• If the parent borrower requests additional funds
  for an existing loan period (resulting in a loan
  amount adjustment, not a new loan), the lender is
  not required to obtain a new credit report.

44
GEN-03-03 Cont.

• Endorser
• Any loan for which an endorser is required, must
  be made under a new PLUS MPN, with a new Endorser
  Addendum, because the PLUS MPN becomes a
  single-loan promissory note when an endorser is
  used
• Endorser is liable only for the specific loan or
  loans he or she agreed to endorse
• PLUS MPN may be used for loan periods beginning
  on or after July 1, 2003
• Must be used for all Federal PLUS Loans for loan
  periods beginning on or after July 1, 2004, or
  for any loan certified on or after July 1, 2004,
  regardless of the loan period
• MPN and other forms attached to DCL

45
Direct Loan Bulletin-03-07

• Direct Loan PLUS MPN
• Most requirements similar to FFEL PLUS MPN
• Effective with any Direct PLUS Loan made for the
  2003-2004 year (ID number includes 04)
• If a school is not authorized to use or chooses
  not to use the multi-year feature of the Direct
  PLUS MPN, it may make multiple Direct PLUS Loans
  under a single Direct PLUS MPN within the same
  academic year (enrollment period for FFEL)
• Must have an active confirmation process for
  Direct PLUS Loans made under the multi-year
  feature of the Direct PLUS MPN
• For operational business rules related to Direct
  Loan MPN, please refer to the 2003-2004 COD
  Technical Reference Vol. II, Section 1 (Full
  Part.) or Vol. IV, Section 1 (Phase-In Part.)
• MPN and other forms attached to DLB

46

• CB-02-12 (July 02)
• Electronic versions of the Federal Perkins Loan
  Program (Perkins eNotes).
• Perkins eNotes should be used in conjunction with
  the Standards for Electronic Signatures in
  Electronic Loan Transactions - Dear Partner
  Letter GEN-01-06
• Contains attachments for open-end and closed-end
  Notes in PDF and HTML formats
• Questions - Neil Sattler at [phone]
• P-03-1 (Feb. 03)
• 2003-2004 Pell Payment and Disbursement
  Schedules
• Maximum - 4050 Minimum - 400
• Maximum EFC to receive Pell - 3850

47
Electronic Announcements
48
Electronic Announcements

• Electronic Cohort Default Rate (eCDR)
• Electronic Announcement 2/3/03
• 2001 Draft Cohort Rates available 2/18/03
• Cohort default rate challenge timeframes begin on
  the sixth business day after 2/18/03
• eCDR package - a cover letter, a reader-friendly
  loan record detail report, and an extract-type
  loan record detail report
• All domestic schools not already signed up for
  eCDR must sign-up at www.sfawebenroll.ed.gov by
  June 1, 2003
• Questions - FSA.schools.default.management_at_ed.gov
  or via phone at 202-377-4259
• Electronic Announcement 2/24/03
• eCDR Download and File Reviewing Instructions

49
Electronic Announcements

• Resources/References
• Electronic Announcement 2/19/03
• a new document called "Sources of Assistance for
  Schools" (sfadownload.ed.gov)
• phone numbers, e-mail addresses, Web site
  addresses, etc. will be updated monthly as needed
• Resources for Blind and Visually Impaired
  Students
• Electronic Announcement 2/6/03
• Aid Audio Guide, Braille publications, screen
  readers
• Closed School Guide
• Electronic Announcement 1/28/03
• Provides information on how to assist students,
  Teach Outs, Transfers, Approving
  Locations/Programs, Aid Eligibility
• State Authorizing contacts

50
"In Case You Didn't Know..."
51
HEA Reauthorization

• HEA expires 9/30/03 (automatic 1-year extension)
• House Committee has held some hearings
• Senate Committee may not start working on
  reauthorization until 2004
• Department of Education, associations,
  organizations, etc. provide proposals, comments,
  issues to Congress for consideration
• Big issues annual loan limits, origination fees,
  consolidation loans and student loan interest
  rates
• Technical amendments are separate from
  reauthorization

52
Did You Know?

• GEN-01-13 Military Mobilization and R2T4
• Institutional Charges and Refunds
• We strongly encourage schools to provide a full
  refund of required tuition, fees, and other
  institutional charges, or to provide a credit for
  future charges (still use charges initially
  assessed student in R2T4)
• If you decide NOT to assess any charges, R2T4
  still applies (unless the student never actually
  began attendance no-show- GEN-00-24)
• Return of Title IV Funds Treatment
• If a Title IV eligible student withdraws because
  of being called to active duty, or has been
  otherwise impacted by the military mobilization,
  the school must perform the Return of Title IV
  Funds
• If those calculations result in the school being
  required to return funds to one or more of the
  Title IV programs, it must do so
• An institution is not required to collect an
  overpayment of grant funds for such a student,
  and therefore, is not required to contact the
  student, notify NSLDS, or refer the overpayment
  to the Department

53
Did You Know?

• Sample R2T4 policy summary 02/03, FSA HDBK,
  Vol. 2, pages 158-159
• Low income edit (ISIR) removed for 03/04
• Students are NOT automatically selected for
  verification based SOLEY on low income
• Debit Cards - Schools are prohibited from
  charging students a fee for delivering Title IV
  FSA funds. If a school delivers FSA funds to
  students by crediting funds to a school issued
  debit or smart card, the school may not charge
  students a fee for making withdrawals of FSA
  program funds from that card (02/03 FSA HDBK,
  Vol. 2, page 86)
• PPA/ECAR schools will now be able to print and
  view their Program Participation Agreements and
  Eligibility and Certification Approval Reports
  online at www.eligcert.ed.gov (EAPP)

54
Did You Know?

• Tax preparer signature - you may accept a paper
  return on which the tax preparer has stamped,
  typed, or printed her name and SSN or EIN (02/03
  FSA HDBK, Application/Verification Section, Page
  46)
• Veteran- Applicants for TIV aid who have been
  members of the U.S. Armed Forces and whose
  Character of Service is anything but
  "dishonorable" meet our definition of an
  independent student. Unlike the VA for VA
  benefit purposes, there is no minimum amount of
  time that the member of the Armed Forces must
  have served to meet our definition as an
  independent student. However, the distinction
  regarding training versus active duty IS made for
  members of the Reserve and National Guard.
  Members of the Guard or Reserves called into
  active duty must serve in other than a training
  capacity and have a Character of Service other
  than "dishonorable" to meet ED's definition of an
  independent student for Federal student aid.

55
Did You Know?

• 30 Day Delay - loan proceeds delayed for 30 days
  for students that are first-time borrowers (never
  borrowed) and first-year (freshman)
  undergraduates in a program of study at your
  institution (GEN-90-41)
• High School Students - A student enrolled in
  elementary or secondary school is not eligible
  for aid from the FSA programs, even if she is
  simultaneously enrolled in an eligible
  postsecondary program. A student is considered to
  be enrolled in a secondary school if she is
  pursuing a high school diploma. A student who has
  completed the diploma requirements but has not
  yet received a diploma is still considered to be
  enrolled in secondary school if she is taking
  postsecondary coursework for which the high
  school gives credit.
• A student still enrolled in high school is not
  eligible for TIV aid even if they meet the high
  school equivalent requirements (ATB, etc.)
  (02/03, FSA HDBK, Vol. 1, page 3)

56
Professional Judgment (PJ) (02/03 FSA HDBK,
Application/Verification, page 28, 62)

• Adjusting data elements used to calculate EFC
• Dependency Overrides
• Adjusting Cost of Attendance
• Reasonable decisions on a case-by-case basis
• Adequate Documentation supporting unusual
  circumstances
• Examples include high medical expenses,
  unemployment, high child care costs
• Unreasonable judgment includes reducing income
  based on vacation expenses or tithing
• However, none of the conditions listed below,
  singly or in combination, qualify as unusual
  circumstances or merit a dependency override
• 1) Parents refuse to contribute to the students
  education
• 2) Parents are unwilling to provide information
  on the application or for verification
• 3) Parents do not claim the student as a
  dependent for income tax purposes
• 4) Student demonstrates total self-sufficiency.

57
Training

• 2003 Fundamentals of Title IV Administration
• All training held in the RTFs (formerly Precert
  Training)
• Boston (3/10-14), Seattle (4/28-5/2), Dallas
  (5/5-9), Philadelphia (6/9-13), Denver (7/21-25),
  San Francisco (8/18-22), Chicago (9/15-19),
  Atlanta (9/29-10/3), Kansas City (10/27-31), and
  New York City (11/17-21)
• EDExpress Training (Pell and Direct Loan)
• Greensboro AT, NC (5/21-22), RTF, Atlanta
  (5/28-29), Erwin Tech, Tampa (6/26 Pell only),
  RTF Atlanta (7/9-10)
• Cash Management Summer/Fall 2003 (August,
  Sept., Nov.)

58
Training

• FSA Videoconferences
• 10/24/2002 - FSA Application Processing System
  (ANN-02-05)
• www.edvideo.walcoff.com (also contains archived
  videos)
• FSA Coach (http//fsacoach.ed.gov)
• 2001-2002 On-line (ANN-02-04) 02/03 soon
• Register (New on-line features ID password)
• www.ed.gov/offices/OSFAP/sfau/index.html
• www.ifap.ed.gov
• Technical 602-282-8450 Register 202-377-3941
• Registration User Guide

59
Personnel Changes

• Yolanda Blackman
• New Training Officer in Region IV
• Started January 2003
• 404-562-6291
• yolanda.blackman_at_ed.gov

60
Federal Update

• GHEAC Annual Conference
• March 4-5, 2003

David Bartnicki 404-562-6290 david.bartnicki_at_ed.g
ov