Regulatory Perils for Graduate and Professional Students

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Regulatory Perils for Graduate and Professional
Students

• David Garza
• Policy Advisor
• TG Policy and Regulatory Affairs
• david.garza_at_tgslc.org

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Topics

• Construction of the cost of attendance for the
  nontraditional student
• Guidelines surrounding the determination of
  resources
• Safeguards Rule under Gramm-Leach-Bliley Act (GLB)

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• Cost of attendance

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Trivia question

• What section of the Higher Education Act
• addresses Cost of Attendance?
• A) 428
• B) 472
• C) 466
• D) All of the above
• E) None of the above

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Trivia question

• What section of the Higher Education Act
• addresses Cost of Attendance?
• A) 428
• B) 472
• 466
• All of the above
• None of the above

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Cost of attendance

• What is cost of attendance (COA)?
• It is an estimate of the students educational
  expenses for the period of enrollment

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Components of COA

• Tuition and fees
• Books and supplies
• Transportation
• Room and board
• Personal expenses
• Loan fees

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Components of COA

• COA may also include reasonable
• allowances for
• Dependent care
• Disability related expenses
• Study abroad expenses

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Varying COAs

• COA can be unique to the program of study
• Examples of different graduate and professional
  programs
• MBA
• Medical, Nursing, Dental
• Law
• Other graduate programs

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COA and PJ

• PJ can be used to adjust the COA
• How do schools use PJ for nontraditional
  students?
• What are the constraints of using PJ?

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Actual vs. average costs

• When should an FAA use actual costs versus
  average costs?
• Advantages and disadvantages

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Scenario I

• Karen and Mattson are a married couple.
• Both are going back to school to obtain a law
  degree and MBA degree, respectively.
• Both have applied for financial aid at ABC
  University for 20042005 academic year.

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Scenario I continued

• Should a school reconcile budgets for married
  students attending the same school and adjust
  COA for shared room and board expenses?

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Scenario II

• Nathan is attending 2 institutions because he
• is completing multiple programs of study
• (MBA and Law).

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Scenario II continued

• Can the student receive funds at each school?
• How would a school monitor loan limits and
  adjust COA?

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• Resources

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Trivia question

• Which of the following section(s) of the
• regulations discusses resources?
• 673.5
• 682.200(b)
• 685.102(b)
• None of the above
• All of the above

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Trivia question

• Which of the following section(s) of the
• regulations discusses resources?
• 673.5
• 682.200(b)
• 685.102(b)
• None of the above
• All of the above

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Resources

• Title IV aid
• Net earnings from need- based employment
• State and institutional aid
• ROTC allowances
• Scholarships

• Tuition and fee waivers
• Fellowships or assistantships
• Veterans educational benefits
• National Service education awards
• Insurance programs for students education

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Not resources

• Resources from the previous screen that are used
  to calculate an EFC
• Earnings from non-need-based employment
• Certain veterans educational benefits and
  AmeriCorps for determining Subsidized Stafford
  eligibility

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Fellowships

• Help students pursue studies or some form of
  research
• Have benefits of all shapes and sizes
• May or may not be taxable

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Fellowships

• What are the guidelines for considering whether
  or not a fellowship is a resource?

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Guidelines for fellowships

• Award is a resource if it is
• Need-based employment or,
• Not employment
• Award is not a resource if it is
• Non-need-based employment

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Scenario

• Graduate student receives
• 30,000 fellowship
• 25,000 stipend for conducting research
• 5,000 tuition waiver with no stipulations
• 10,000 summer assistantship

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Scenario continued

• 30,000 fellowship
• Is it a resource?

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Scenario continued

• 10,000 summer assistantship
• Is it a resource?

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Best practices

• Design and review policies in place on how to
  handle resources
• Communicate with organization providing the
  fellowship funds
• Contact student if questions arise

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• Gramm-Leach-Bliley Act (GLB)

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GLB

• What is it?
• How does it affect my institution?
• How does it affect my students?

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Trivia question

• Which of the following regulations covers
• GLB standards for safeguarding customer
• information?
• 16 CFR 314
• 16 CFR 315
• 16 CFR 316
• None of the above

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Trivia question

• Which of the following regulations covers
• GLB standards for safeguarding customer
• information?
• 16 CFR 314
• 16 CFR 315
• 16 CFR 316
• None of the above

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Nuts and bolts of GLB

• Gramm-Leach-Bliley Financial Modernization Act of
  1999
• Two main components
• Privacy Rule
• Safeguards Rule

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GLB components

• Privacy Rule Addresses privacy notices, opt
  out rights and limits on use and disclosure.
  Institutions of higher education should be in
  compliance with this part of the rule if they are
  in compliance with FERPA
• Safeguards Rule Requires financial
  institutions to have a security plan to protect
  the confidentiality and integrity of personal
  consumer information

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Safeguards Rule

• Why would a school be considered a
• financial institution?
• The FTC considers certain activities covered
  under the Safeguards Rule
• Administration of educational loans
• Extension of credit and interest charged

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Safeguards Rule

• The security plan must
• Contain administrative, technical, and physical
  safeguards appropriate to
• Size and complexity of the financial institution
• Nature and scope of activities
• Sensitivity of customer information

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Security plans

• National Association of College and University
  Business Officers (NACUBO)
• www.nacubo.org
• Background information
• Various models of security plans by schools
• Online GLB resources

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Safeguarding

• Why is safeguarding information important?
• Protection of non-public information
• Federal and state legislation
• Identity theft

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Statistics on identity theft

• What are the top three categories of
• complaints that the Federal Trade
• Commission receives?
• Identity theft
• Internet auctions
• Shop-at-home and catalog sales

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Issues surrounding the SSN

• The Social Security Number
• Why is it needed?
• How will it be used?
• How is it protected?
• What will happen if a student does not provide
  it?

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Making the changes - best practices

• Remove SSN from all correspondence mailed out to
  students
• Create a university/student identifier
• Improve authentication process for students who
  call or send e-mail

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Making the changes - best practices

• Review office procedures and policies for
  shredding and disposing of sensitive information
• Periodically renew team member confidentiality
  agreements
• Maintain security updates to internal computers

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References

• Sec 472, Higher Education Act of 1965
• 34 CFR 673.5, 682.200(b), and 685.200(b)
• Federal Student Aid Handbook 2004-2005
• The Unexplained Side of Resources, 2003 NASFAA
  Conference, Anthony Jones and Kathy Gause, U.S.
  Department of Education

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References

• IRS Publications 520 and 970
• www.ftc.gov
• www.nacubo.org
• http//counsel.cua.edu/glb/questions/frequent.cfm

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Questions

• TG Web site
• www.tgslc.org
• ASK TG
• TG Customer Assistance
• [phone]
• cust.assist_at_tgslc.org

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David Garza Policy Advisor TG Policy and
Regulatory Affairs david.garza_at_tgslc.org