2008 NJASFAA ANNUAL CONFERENCE Federal Update Jeff Baker Federal Student Aid U.S. Department of...
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Transcript of 2008 NJASFAA ANNUAL CONFERENCE Federal Update Jeff Baker Federal Student Aid U.S. Department of...
2008 NJASFAAANNUAL CONFERENCE
Federal UpdateJeff Baker
Federal Student Aid U.S. Department of Education
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Dependency Overrides
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Students Seeking Dependency Overrides
The Problem – Some students who are likely eligible for a
dependency override cannot find a school to consider an override at the time they need to submit a FAFSA.
Web FAFSA products to not allow a dependent student to submit without parental information.
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Students Seeking Dependency Overrides
The Solution – Students who are unable to provide parental
data will be able to submit their application through FOTW by indicating they believe that they have a special circumstance.
Application can be submitted for processing and all appropriate matches will be performed No EFC will be calculated These records will have a “special
circumstances” flag. School makes the determination after
obtaining documentation.
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Recent Legislation
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Higher Education Reconciliation Act (HERA) – February 8, 2006
College Cost Reduction and Access Act (CCRAA) – September 7, 2007
Ensuring Continued Access to Student Loans Act of 2008 (ECASLA) – May 7, 2008 Extended by HR 6899
Higher Education Opportunity Act (Reauthorization) – August 14, 2008
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Higher Education Opportunity Act
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Higher Education Act of 1965 expired in 2004.
Reauthorized HEA after 16 extensions.
Signed by the President on August 14, 2008.
Became Public Law 110-315. Website:
http://www.ed.gov/heoa
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HEOA - Pell Grants Year Round Awards – Up to two full
scheduled awards within on award year. Effective with the 2009-10 award year.
Life-Time Limit - Limits the duration of a student’s eligibility to 18 semesters. Effective with the 2008-09 award year
Changes the minimum Pell Grant award from a fixed $400 to ten percent of the appropriated maximum Pell Grant award. Effective for the 2009-10 award year.
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HEOA - Pell Grants Provides a maximum Pell Grant
award, regardless of calculated EFC, to any undergraduate student whose parent or guardian was a member of the Armed Forces and died in Iraq or Afghanistan after September 11, 2001. Effective with the 2009-10 award
year.
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HEOA – Student Loans Requires the Secretary to oversee
private education loans made by FFEL lenders to students attending Title IV institutions.
Addresses lender and guaranty agency inducements.
Provides for more consumer information from lenders, guaranty agencies, schools, and ED.
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HEOA – Student Loans Changes Cohort Default Rate
Calculation From two years to three years Transition Period 30% Penalty Rate
Increases “disbursement relief” CDR to 15%. Effective October 1, 2011
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HEOA – Student Loans Changes to Disability Discharge
Requirements Expands loan forgiveness but only if
Congress appropriates funds. Program would operate on a first-come, first-served basis.
Waiver of interest for military in combat zones.
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HEOA – Student Loans Removes VA Educational Benefits
from Estimated Financial Assistance. Also from “Resources” for campus-
based aid. Effective with the 2010-11 award
year.
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HEOA – Student Loans Dependent students eligible for
unsubsidized without parental FAFSA information. Effective on enactment – August
14, 2008 Paper FAFSA or EDE Submission Special process for Direct Loans
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Perkins Loans
Increases annual and aggregate loan limits – Annual $5,500 for undergrad Annual $8,000 for grad Aggregate $60,000 for grad Aggregate $27,500 for upper
division undergrad $11,000 for all othersEffective with the 2008-09 award
year.
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HEOA – Regulations Hearings
Texas Christian University, Fort Worth University of Rhode Island, Providence Johnson C. Smith College, Charlotte Pepperdine University, Malibu U.S. Department of Education,
Washington Cuyahoga Community College,
Cleveland
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Nov ’08 – Announcement of Formation of Committees and Solicitation of Nominations for Negotiators
Dec ’08 – Committees Established
Feb thru April ’09 – Negotiations
Aug ’09 – NPRM Published in the Federal Register
Nov ’09 – Final Rule Published
Jul ’10 – Rules Become Effective
HEOA – Regulations
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FFEL Loan Purchase Programs
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Legal Authorities Ensuring Continuing Access to Student
Loans Act of 2008 (P.L. 110-227) HR 5715 Signed by the President on May 7,
2008 Strengthened GA Lender of Last Resort
Program Provided Secretary authority to
purchase FFEL loans Cannot provide advanced funding to
lenders
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Program Objectives Ensure that eligible students and parents
receive federal student loans for the 2008-2009 academic year
Support the FFEL Program as a successful private/public partnership
Ensure no net cost to the federal government
No statutory authority to provide advance funding
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Commitment by ED to purchase “participation interests” in eligible 2008-2009 FFEL loans through September 30, 2009.
ED’s purchase will provide immediate liquidity.
To terminate ED’s participation interest lender repays ED with defined yield.
Loan Participation Purchase Program
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Loan Purchase Program
Commitment by ED to purchase eligible 2008-2009 FFEL loans through September 30, 2009.
Any FFEL lender/holder Loans must be fully disbursed to be
purchased. 45 day advance notice of loans to be sold. ED’s commitment has value in financial
markets.
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Where We Are Today Academic Competitiveness and National
SMART Grants Increased FFEL and DL Loan Limits Interest Rates PLUS Loans Need Analysis Formula/Dependency Test Auto Zero EFC/Simplified Needs Test Professional Judgment/Dependency
Overrides
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ACG and National SMART Grants Eligible Non-Citizens Eligible At least half-time enrollment Students in certificate programs
eligible, if program is at least one year in length and offered at a two or four-year degree granting institution.
Awards based on student’s grade level instead of “academic year”
Effective July 1, 2009 – by HEOA
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Grade LevelBase
AmountAdditional
Unsubsidized
1st-yr Dependent $3,500 $2,000
2nd-yr Dependent $4,500 $2,000
Upper Division Dep. $5,500 $2,000
1st-yr Independent $3,500 $6,000
2nd-yr Independent $4,500 $6,000
Upper Division Indep. $5,500 $7,000
Graduate/Professional $8,500 $12,000
FFEL/DL Annual Loan Limits
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Interest Rates Reduced interest rates on undergraduate
subsidized loans only from current 6.8% to
6.0% for loans disbursed on or after 7/1/2008 5.6% for loans disbursed on or after 7/1/2009 4.5% for loans disbursed on or after 7/1/2010 3.4% for loans disbursed on or after 7/1/2011
Beginning 7/1/2012, rates revert to 6.8% Unsubsidized Stafford Loans and all
Staffords for graduate students remain at 6.8% fixed
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PLUS Loans
Extenuating circumstances for adverse credit may include delinquency of up to 180 days on mortgage payments or on medical bill payments
Delayed repayment start date for parent PLUS borrowers at their option
Interest Rates (parents and students) FFEL 8.5% Direct Loans 7.9%
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Need Analysis Increases student income protection
allowances Excludes from specified list of untaxed
income -- Welfare payments Earned income credit amounts Special fuel tax credit Excluded foreign income Untaxed Social Security Benefits
Effective for 2009-2010
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Need Analysis Excludes ‘special combat pay’ from
income Qualified education benefit (529 plan)
owned by dependent student is an asset of the parent
Distributions from 529 plans excluded from other financial assistance
Effective for 2009-2010
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Dependency Criteria Independent student definition –
Is an orphan, in foster care, or a ward of the court, or was at any time when the student was is 13 years of age or older.
Is, or was, an emancipated minor or is in legal guardianship in the student’s state of legal residence.
Has been verified as an unaccompanied youth who is a homeless child or youth.
Effective for 2009-2010
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Auto Zero EFC and SNT Increases Auto Zero EFC income level
from $20,000 to $30,000 (indexed to CPI)
Increases time from 12 to 24 months for receipt of means tested benefits
Adds Dislocated Worker in addition to type of tax return and means tested benefits
Effective for 2009-2010
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Professional Judgment Dependency Overrides Adds dislocated worker and
homelessness as examples of when an FAA can use professional judgment
Provides that an FAA can use a dependency override made by another FAA within the same award year
Both effective for the 2009-2010 award year
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HEOA Implementation
FAFSA 2009-10 Regulations
www.ed.gov/heoa Dear Colleague Letters
Comprehensive Summary Selected Topics
FSA Training Institutional Data Reporting
(NCES/IPEDS)
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2007-2008 Regulations
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2007-2008 Rulemaking
TEACH Grant NPRM Published March 24, 2008 Final Rule Published June 23, 2008 Rules Effective July 1, 2008
Title IV Loan Programs NPRM Published July 1, 2008 Comment Period Ends August 15, 2008 Final Rule Published October 23, 2008 Rules Effective July 1, 2009
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2007-08 TEACH Final Effective for the 2008-2009 award year. Must be repaid as Direct Unsubsidized Loan
if student does not – Teach for at least four years within
eight years of ceasing enrollment in the TEACH Grant eligible program, as a - Highly Qualified Teacher At a Title I school In a specified subject area.
“In for a dollar, in for four years.”
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2007-08 TEACH Final Up to $4,000 per year for first
undergraduate or post-baccalaureate (non degree) program - $16,000 aggregate
Up to $4,000 per year for graduate student - $8,000 aggregate
Prorated amounts for less than full-time enrollment
Award, when combined with other assistance, cannot exceed cost of attendance (No EFC)
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2007-08 TEACH Final TEACH Grant recipient must teach in a
high-need field in the majority of classes taught.
“Other” high-need fields must be listed in the Department of Education’s Nationwide Listing of Teacher Shortage Areas at the time the recipient begins qualified teaching.
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2007-08 TEACH Final Institutional Eligibility
See DCL GEN-08-07, posted to IFAP on June 3, 2008
Institutional Choice whether to participate An institution that offers one or more
TEACH Grant-eligible programs may participate in the TEACH Grant Program
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2007-08 TEACH Final Funding, awards and disbursements much
like Pell, ACG, and SMART Does not matter which loan program
school participates in (FFEL or Direct Loans)
Institution has no responsibility for tracking or for conversion of grant to loan
NSLDS and Direct Loan Servicing are the tracking mechanisms
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TEACH Grant Statistics
Number of Approved TEACH Grant Schools 563Number of Originating and Disbursing Schools 130Amount of Originations Number of TEACH Originations $9,021,138Number of TEACH Originations 2,562Actual Disbursement Amount $3,066,887Average TEACH Grant Award $3,521ATS Notes Received 4,774
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2007-2008 Loans Final
Definition of Not-for-Profit Holder FFEL Only
Income-based Repayment Plans FFEL and Direct Loans
Public Service Loan Forgiveness Direct Loan only
Economic Hardship and Military Service Deferments FFEL, Direct Loans, and Perkins
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Upcoming FSA Training
Federal Student Aid Conferences –October 28 - 31, 2008Hyatt Regency DallasDallas, Texas
December 2-5, 2008Paris/Bally'sLas Vegas, Nevada
http://fsaconferences.ed.gov/
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