Federal Update

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Federal Update

• Claire (Micki) Roemer
• General Manager
• School Services and Training Channel

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Secretarys Commission on the Future of Higher
Education
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Secretarys Commission on the Future of Higher
Education

• Final Report A Test of LeadershipCharting
  the Future of Higher Education
• U.S. higher education needs to improve in
  dramatic ways, changing from a system primarily
  based on reputation to one based on performance.
• http//www.ed.gov/about/bdscomm/list/hiedfuture/i
  ndex.html

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Secretarys Action Plan

• Accessibility
• There are far too many Americans who want to go
  to college but cannotbecause theyre either not
  prepared or cannot afford it.
• Affordability
• There is little to no information on why costs
  are so high and what were getting in return.
• Accountability
• No current ranking system of colleges and
  universities directly measures the most critical
  pointstudent performance and learning.

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FAFSA on the WEB and FAFSA4caster
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FASFA on the Web
www.fafsa.ed.gov
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What is FAFSA4caster?

• Developed to
• Foster early awareness of financial aid and the
  application process and form.
• Serve as an early analysis tool of college
  affordability.
• Reduce the time required to submit the "official"
  financial aid application in the student's senior
  year of high school.

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Features of FAFSA4caster?

• FAFSA4caster will
• Instantly calculate eligibility for federal
  student aid.
• Generate a Renewal FAFSA.
• Automatically generate a Federal Student Aid PIN
  to use to sign your FAFSA.

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FAFSA4caster
www.FAFSA4caster.ed.gov
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• Program Appropriations

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Title IV Program Budgets Appropriations
President's FY 2008 Budget Submission
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Title IV Program Budgets Aid Available
President's FY 2008 Budget Submission
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Fiscal Year 2008 Budget Proposals
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FY 08 Title IV Budget Priorities

• Federal Pell Grant
• Increase maximum Pell Grant to 4,600 for
  2008-09 and to 5,400 by 2012-13.
• Pell Grants available year-round at eligible 2
  year and 4 year degree granting institutions.
• Pell Grant eligibility limited to the equivalent
  of 16 semesters.
• Eliminate the Pell Grant award rule related to
  tuition sensitivity.

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FY 08 Title IV Budget Priorities

• ACG and National SMART Grants
• Increase Academic Competitiveness Grants (ACG)
  awards from
• 750 to 1,125 for first-year students
• 1,300 to 1,950 for second-year students.

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FY 08 Title IV Budget Priorities

• FFEL/Direct Loans
• Increase annual loan limits for upper division
  undergraduates from 5,500 to 7,500.
• Increase aggregate loan limits for all students.
• No amounts specified.

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FY 08 Title IV Budget Priorities

• Eligibility/EFC
• Exclude amounts held by students and parents in
  529 savings and investment accounts from the EFC
  formula.
• Implement a consent-based approach to matching
  FAFSA data with Federal tax data.
• Lots more do be worked out
• Pilot first
• ??? Award Year

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FY 08 Title IV Budget Priorities

• Funding for Increased Aid
• Eliminate new funding for
• FSEOG
• Perkins Loan
• LEAP
• Recall Federal share of Perkins Loan revolving
  fund and outstanding loan portfolio.
• Details being evaluated.

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FY 08 Title IV Budget Priorities

• Funding for Increased Aid
• Reduce interest subsidies to FFEL lenders by 0.5
  percent (50 basis points).
• Reduce FFEL lender default insurance from 97
  percent to 95 percent.
• Reduce FFEL guaranty agency default collection
  payments.
• Move FFEL guaranty agency account maintenance
  fees to a unit cost basis.
• Increase FFEL consolidation lender fee from 0.5
  percent to 1 percent.

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Higher Education Legislation
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Higher Education Legislation

• Third Higher Education Extension Act of 2006
• Extends the HEA through June 30, 2007.
• New restrictions on Eligible Lender Trustee
  arrangements with schools.
• Definition of Hispanic-serving institution.
• Clarification of Guaranty Agency account
  maintenance fees.
• New loan discharge for survivors of 9/11 victims.

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Regulations
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Recent Regulations

• Interim Final Regulations
• ACG/National SMART Grants - July 3, 2006
• Other HERA Issues August 9, 2006
• New 9/11-Related Discharges Dec. 29, 2006
• Final Regulations
• ACG/National SMART Grants - Nov 1, 2006
• Other HERA Issues Nov 1, 2006
• New 9/11-Related Discharges May, 2007

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• Negotiated Rulemaking
• 2008-2009 and Beyond
• Four Teams
• Title IV Loans
• ACG/National SMART Grant
• General Provisions
• Accreditation

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• Negotiated Rulemaking
• Sessions December 2006 thru April 2007
• NPRMs Published May 2007
• Comments By July 2007
• Final Rules Published by November 1, 2007
• Effective Date July 1, 2008 with possible
  early implementation.
• See web link on IFAP Home Page bottom right

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Negotiated Rulemaking

• Loans Committee Agenda
• Identity theft.
• Counseling for student PLUS borrowers.
• Frequency of capitalization for consolidation
  loan borrowers.
• Deferment eligibility made by one loan holder
  good for other holders.
• Eligible lender trustee relationships with
  schools or affiliated entities.
• Same as school lender.

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Negotiated Rulemaking

• Loans Committee Agenda
• Preferred lender lists.
• Minimum of three.
• Statement that other lenders may be used.
• Reason for inclusion.
• Must certify any lender.
• No delay.
• Prohibited inducements.
• Applies to FFEL lenders and GAs
• List of prohibited
• List of permitted

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Negotiated Rulemaking

• Loans Committee Agenda
• Disability discharges
• Conditional Period begins on date cert signed by
  MD.
• Submission of disbursement records by schools to
  lenders.
• Still being discussed.
• Certification of e-signatures for assigned MPNs.

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Negotiated Rulemaking

• Loans Committee Agenda
• Perkins Loans
• Clarify eligibility requirements for Child
  Family Service Agency Cancellation.
• Define reasonable collection costs.
• Mandate assignment of defaulted Perkins Loans.
• More than 7 years in default
• No collections in past year
• More than 100.

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Negotiated Rulemaking

• ACG/SMART Grant Committee Agenda
• Rigorous secondary school programs.
• Generally same as current.
• Mandatory institutional participation.
• No eligibility of certificate programs.
• Use of grade point average
• Academic year progression
• Determination of eligible SMART majors

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Negotiated Rulemaking

• General Provisions Committee Agenda
• Consistency in definitions of enrollment status
  and grade level.
• Consistent disbursement requirements for
  nonstandard and nonterm programs.
• Cash management.
• Notification to borrower prior to disbursement
• Eliminate single disbursement for Perkins and
  FSEOG.

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Negotiated Rulemaking

• General Provisions Committee Agenda
• Payment of prior year expenses from current year
  funds.
• Student confirmation for post-withdrawal
  disbursement of a grant.
• Certification of a loan for transfer students in
  non-term environment.
• Late, late disbursements

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Negotiated Rulemaking

• Accreditation Agenda
• Measures of student achievement.
• Relationship of process standards to student
  achievement.
• Consideration of mission in application of
  standards.
• Monitoring of institutions by accrediting
  organizations.

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Negotiated Rulemaking

• Accreditation Agenda
• Substantive change.
• Due Process.
• Transfer of credit.
• Technical and process improvements.

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Higher Education Reconciliation Act of
2005Enacted February 8, 2006
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FFEL and Direct Loans
Annual Loan Limits

• Increases annual base loan limits for
• First-year students from 2,625 to 3,500.
• Second-year students from 3,500 to 4,500.
• Increases annual additional unsubsidized for
• Graduate students to 12,000.
• Prep for Grad Program to 7,000.
• Teacher Certification to 7,000.
• Effective for loans first disbursed on or after
  July 1, 2007.
• Aggregate loan limits are not increased

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FFEL and Direct Loans
Low Default Rate Disbursement Waivers

• An institution with cohort default rates of less
  than 10 percent for the three most recent years
  is exempted from the requirement that FFEL and
  Direct Loans
• Be issued in at least two disbursements for
  one-term loans.
• Be delayed for 30 days for first-time students.

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Calculation Of EFC - 2006-2007

• Increases the threshold to 20,000 under which a
  family would automatically have an EFC of zero.
• Eliminates consideration of dependent students
  tax return for both SNT and Auto Zero EFC.
• Tax return alternative if family received
  benefits from a federal means-tested benefits
  program.

Simplified Needs Test and Auto Zero EFC
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Calculation Of EFC - 2006-2007
Other EFC Changes

• Treats all 529 Pre-Paid and Tuition Savings Plans
  as assets of the owner, unless the owner is the
  dependent student.
• Excludes small businesses from assets.
• Adds active duty military to the criteria that
  makes a student independent.

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Calculation Of EFC - 2007-2008
Other EFC Changes

• Increases Income-Protection Allowances.
• Decreases Asset Assessment Rates.

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Drug Conviction

• Provides that an applicant loses eligibility for
  Title IV aid only if the drug-related offence for
  which he or she was convicted occurred while the
  student was receiving Title IV aid.

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Return Of Title IV Aid (R2T4)

• Specifies that scheduled clock hours are used to
  determine earned aid for clock-hour programs
• Limits a grant overpayment due from a student to
  the amount by which the original overpayment
  amount exceeds half of the total grant funds
  received by the student

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New Grant Programs

• Higher Education Reconciliation Act of 2005
• February 8, 2006

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• ACG AND NATIONAL SMART GRANT
• Academic Competitiveness Grant Program (ACG)
• National Science and Mathematics Access to
  Retain Talent (National SMART Grant) Grant
  Program
• Both programs are funded for five years beginning
  with the 2006-2007 award year. 790 million for
  2006-2007.

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• Authorization and Funding
• Funding for these programs is not subject to the
  annual appropriations process
• 2006-07 -- 790 million
• 2007-08 -- 850 million
• 2008-09 -- 920 million
• 2009-10 -- 960 million
• 2010-11 -- 1.01 billion

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Programs Are Similar in Some Ways
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HERA Links on IFAP and FAP
Link to High School Codes

• Link to CIP Codes

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FSA Assessments
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Where to Locate the FSA Assessments

• IFAP
• http//ifap.ed.gov

• Financial Aid Professionals Portal
• http//fsa4schools.ed.gov

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The FSA Assessment Re-Design
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Helpful Hints

• Assists in the navigation of the tool
• Reminder on how to use the tool

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Satisfactory Academic Progress Assessment(SAP)
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The Management Enhancement

• A corrective action form to help you resolve
  noted problems.
• Identify the problem, design a corrective action,
  identify resolution team, set timeframe and
  reminder to update policies and procedures.

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Activity Bar and Additional Links

• The Activity Bar provides activities for you to
  assess your financial aid operations
• The Additional Links provide resource links other
  than the federal regulatory links.

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The Regulation Link
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Policies and Procedures At a Glance Chart

• Identifies required policies and procedures
• Provides Good Practices
• Helps you review current policies and procedures
• Assist to design a policy and procedure

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Policies and Procedures
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Design Process for Policies and Procedures
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Related Assessment

• The importance of testing your policy and
  procedures.
• Updating policy and procedures are important.
• Held accountable to what you state in your policy
  and procedures.

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Conferences and Training Activities
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Conferences

• Financial Aid Professionals Portal under
  Resources and Training
• No sign-on necessary
• Preview of upcoming FSA conferences, agendas,
  hotel and travel information.

www.fsaconferences.ed.gov
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Other Training Opportunities

• FSA Conferences 2007
• New Orleans
• October 30th thru November 2nd
• San Diego
• November 26th November 29th
• Spring Training
• Stand up - ACG/SMART Grants
• April 17 thru June 19th

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Other Training via the Web

• R2T4 on the web
• COD Basics for Title IV grants
• Applicant data resolution
• Identifying information sources with FAA Access
• Analyzing the ISIR
• Resolving data issues

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Additional Web Training

• Calculating the EFC
• NSLDS Data Overview
• Data sources and reporting
• Calculating remaining Aggregate loan limits and
  remaining eligibility
• NSDLS Eligibility Monitoring
• Transfer monitoring
• Pre/Post Screening
• POP

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On the Horizon

• Engaging with low-income, disadvantaged
  traditional students who never apply for
  financial aid
• Estimate financial aid for juniors in high school
• Late summer early Fall will provide students with
  estimated federal award package
• Link outreach with Upward Bound Programs

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COD Changes

• Automatic password reset ( this summer)
• For 0809
• New MPN
• Addition of several new values for ACG/SMART
• Eligibility used
• Total eligibility used
• Scheduled grant amount

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On the Horizon System Changes

• GAPS Redesign
• IPM (Integrated Partner Management)
• Effects eCAR
• EZ Audit
• Destination Point Administrator

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Contact Information

• Claire Micki Roemer
• claire.roemer_at_ed.gov
• 202 377-3452