FFELP

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Prepared by NCHELP Membership Education
Training Committee - March 2001
FFELP Rule Changes for Schools
This presentation provides a summary of the
regulations. Refer to the regulations and the
preamble of the NPRM and Final Rule for detailed
requirements and a discussion of the regulatory
intent.
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FFELP Changes

• Part IX Department of Education
• 34 CFR Parts 600 and 668
• November 1, 2000
• Institutional Eligibility
• Financial Aid History
• Effective July 1, 2001

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Institutional Eligibility

• Section 600

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Sec. 600 accomplishes the following

• Clarifies application/certification processes for
  schools applying for Title IV programs.
• Clarifies reporting requirements when ownership
  or status changes.
• Redesignation of prior regulation.
• Treats types of schools equally -- NPRM proposed
  less for publics.

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Applying for Eligibility and Certification

• Section 600.20

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Applying For Initial Eligibility
600.20(a)

• Submit application for determination of
  eligibility.
• Indicate intent to receive certification to
  participate.

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Certification Procedures for First-Time HEA
Participants
668.13(a)

• In order to be certified to participate,
• school must receive Title IV, HEA
• program training.
• Within 12 months of executing PPA
• Trainee must be designated HEA administrator or
  other designee
• May request waiver of training

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Reapplying
600.20(b)

• Eligible, not participating school must reapply
  if Secretary requests.

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Reapplying
600.20(b)

• Eligible and participating school must reapply IF
• Current designation will expire
• Ownership changes that result in a change of
  control
• Status changes, i.e., proprietary to nonprofit

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Disbursements Related to Applications
600.20(f)

• When current eligibility will
• expire --
• May not disburse after expiration.
• May, however, disburse if submitted a materially
  complete (lt90days) application and no decision
  has been received.

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• Definition of materially complete
• appears later in the presentation

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Disbursement Related to Applications
600.20(f)

• When ownership or status changes --
• May not disburse until school receives
  Secretarys notification.
• May, however, disburse if Secretary issues
  provisional extension of certification

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Applying to Expand Scope of Eligibility
600.20(c)

• Must Apply AND Wait for Approval to
• Increase level of program offering
• Add a program
• Add a branch campus
• Convert a location to a branch campus
• MORE ?

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Applying to Expand Scope of Eligibility
600.20(c)

• Must apply AND wait for approval to add location
  that offers gt50 IF
• Under provisional certification.
• On alternative payment method.
• Acquires assets of another participating school.
• Subject to loss of eligibility if it adds that
  location.

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Applying to Expand Scope of Eligibility

• Absent those conditions --
• School that adds location offering gt50 of
  program needs only to report the addition.
  (found in 600.10)

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Provisional Extension of Certification
600.20(g)

• Necessary for schools that undergo change of
  ownership resulting in change in control in order
  to continue to participate.
• Must submit materially complete application.
• Secretary must receive no later than 10 days
  after the change.

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Provisional Certification

• A materially complete application is a form
  designated by the Secretary and is supported by
  the following ?

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Provisional Certification

• The States license authorizing the school to
  provide education in that State
• Proof of accrediting associations approval
• Audited financials from 2 most recent years
• Financials of the new owner

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Terms of Extension for Schools Undergoing
Ownership Change

• If application is approved --
• Provisional Program Participation (PPA) Agreement
  is given
• Extends previous terms and conditions

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Updating Application Information

• Section 600.21

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Reporting Requirements
600.21(a)

• Must report certain changes to the Secretary lt
  10 days.
• The Secretary will prescribe the manner of
  reporting -- may be other than in writing.
• Failure to report timely results in adverse
  action against school. (From 600.21(e))

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Reporting Requirements
600.21(a)

• Must report --
• School/branch/location name change
• Address change
• Adding location that offers gt50
• Clock to credit hrs semesters to quarters
• Decreased program offering (drop graduate
  program) MORE ?

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Reporting Requirements
600.21(a)

• Must report --
• Change in persons ability to affect the school
  if person previously did not exert such control.
  If publicly traded, must report when it notifies
  accrediting agency, and lt10 days after learning
  about the change.
• Found in 600.21(b)

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Reporting Requirements
600.21(a)

• Must also report --
• Change in HEA program administrator
• Closure of branch/additional location
• Governance of a public institution

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Disbursement Rules/ Additional Locations
600.21(c)

• Schools that add locations (gt50) must not
  disburse funds before reporting.
• But remember --
• Under certain conditions, schools not only must
  report, but also must await approval before
  disbursing.
• (See slides 13 - 14)

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Change in Ownership Resulting in Change of Control

• Section 600.31

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Change of Ownership/Change in Control
600.31

• Schools are ineligible as of date of the
• change. School may remain eligible on a
• provisional basis if it --
• Submits application no later than 10 business
  days after change.
• If owned by public traded corp. must apply lt10
  days after SEC filing or date school knew of the
  change.

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Certification Procedures for Ownership Change
668.13

• Title IV HEA program training is
• required for schools that change
• ownership.
• May request training be waived
• Same requirement as schools that apply to
  participate for the first time.)

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Public Institution
600.31(c)(7)

• Public institution not considered to
• change ownership when governance
• changes if --
• School remains public
• Governing authority in same state
• Governing authority acknowledges schools
  responsibilities under the participation
  agreement

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General Provisions

• Section 668

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General Provisions

• Offer more flexible agreements between schools
• Eliminate the Financial Aid Transcript

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General Definitions
668.2(b)

• Academic Year 30 weeks
• Definition of week
• For educational programs using semes-
• ter, trimester or quarter systems or
• clock hour programs which use standard
• terms, a week is

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General Definitions

• At least 1 day of class or examination
• After last day of term, at least one day of study
  for initial examination

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Definition of Week

• At a credit hour schools with
• non-standard terms --
• At least 12 hours of class or examinations
• After last day of term, at least 12 hours of
  study for examinations

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Definition of Week

• Not included in either definition --
• Homework
• Vacation
• Orientation
• Counseling

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Written Arrangements
668.5(a)

• Consortium agreement between
• eligible schools Program Eligible
• Between eligible schools
• One school provides program for student enrolled
  at former school

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Written Arrangements
668.5(b)

• Study abroad program Program
• Eligible if --
• Arrangement between school/foreign school
• Arrangement between organization acting on behalf
  of foreign school

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Written Arrangements
668.5(c)

• Arrangement between eligible and
• ineligible school Program Eligible if --
• No termination action, show-cause, suspension or
  other proceeding
• Meets definition of eligible program
• gt25 but lt50 at ineligible
• No common ownership between the two

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Administration of Programs Under Agreements
668.5(d)

• Enrolling school calculates and
• disburses, unless under written
• agreement. Disbursing school must
• Take into account hours at both schools in COA
• Maintain records of eligibility and receipt of
  funds.

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Financial Aid History
668.19

• Eliminates the paper FAT
• Transcript is now History
• Use NSLDS instead -- an option since 7/00
• Except mid-year transfer students
• query NSLDS lt30 days prior to
• payment period (Dear Partner GEN00-12)

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Financial Aid History
668.19

• July 1, 2001 use NSLDS only.
• On line, real time
• Via request to NSLDS
• For mid-year transfers, wait 7 days to disburse
  unless response received from NSLDS before 7th
  day
• Schools not liable if rule is followed

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Financial Aid History
668.19

• Financial aid history must be
• checked for --
• Default status
• Overpayment of grant or Perkins
• Pell amount
• Aggregate loan amount
• Annual loan amount

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Notices and Authorizations
668.165

• EFT Right to Cancel notification-
• School must confirm receipt of the notification
  by student or parent borrower
• Must maintain documentation of that confirmation.

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Questions?