U.S. Department of Education
Federal Update
UASFAA Spring Conference
April 18, 2013
Title IV Program
Budget
2
Title IV Aid Available
FY 2012
FY 2013*
Pell Grant
(Max Award)
FSEOG
FWS
Perkins
(AY 12-13)
$35,649,000,000
$5,550
$929,900,000
$1,161,200,000
$970,700,000
(AY 13-14)
$36,580,300,000
$5,635
$929,900,000
$1,348,880,000
$5,134,400,000
TEACH/Presidential
Teaching Fellows
$154,100,000
$232,600,000
$114,674,100,000
$153,539,000,000
$120,822,200,000
$165,048,280,000
Program
Loans
TOTAL
* President’s FY 2013 Budget Request
3
President’s Budget Request
Fiscal Year 2014
•
•
•
•
•
•
4
$5,785 maximum Pell Grant
Increase Federal Work Study by $150 million
Reform Campus-Based Aid to encourage value
and completion
Provide a long-term fix for loan interest rates
Expand “Pay as You Earn”
Race to the Top: College Affordability and
Completion - $1Billion
Electronic
Announcement
March 1, 2013
March 15, 2013
5
Sequestration – TIV Programs
 Federal Pell Grant Program
 No impact to either 2012-2013 or 20132014
 FWS and FSEOG Programs
 No impact on 2012-2013 campus
allocations
 2013-2014 allocations will be reduced
 Will show in final allocations
6
Sequestration – TIV Programs
 TEACH Grant and Iraq-Afghanistan Service Grant
Programs
 Reductions apply only when the first disbursement
of the award is made after March 1, 2013
 TEACH Grant awards must be reduced by 12.6%
from the award amount the recipient would
otherwise have been entitled
 Iraq-Afghanistan Service Grant awards must be
reduced by 37.8% from the award amount the
recipient would otherwise have been entitled
7
Sequestration – TIV Programs
 Federal Direct Loan Programs
 Direct Subsidized and Unsubsidized loan fees are
increased from 1.0 % to 1.051 % For example, the
fee on a $5,500 loan will increase by $2.80 from
$55.00 to $57.80
 Direct PLUS loan fees (for parent and graduate
student borrowers) are increased from 4.0% to
4.204%
 For example, the fee on a $10,000 PLUS loan will
increase by $20.40 from $400.00 to $420.40
8
Sequestration – TIV Programs
 Federal Direct Loan Programs
 Pending further guidance, schools should continue to
award, disburse, and report using 1% and 4%
 Both ED’s and schools’ systems (or contractor’s
systems) will need to be modified

Will include implementation time for modifications
before the new fee structure will be required
 Institutions will NOT be liable for the difference
between the 1% and 4% fees and the revised fee
amounts
 If needed, ED work with the students/borrowers
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2013-2014 Pell Grant Awards
 GEN-13-06
 Maximum Pell award is $5,645
 Minimum award amount for a full-time
student is $582
 Maximum Pell Grant eligible expected
family contribution (EFC) is 5081
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Pell LEU
 LEU – Lifetime Eligibility Used
 Reduces the duration of a student’s eligibility
to receive Pell Grant to 12 semesters (600%
- 6 full Scheduled Awards)
 Applies to all students effective with the
2012-13 award year.
 Calculation includes all earlier years of the
student’s receipt of Pell
 NO “grandfather” clause
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Pell LEU
 Add each annual percentage of student’s scheduled
award that was actually disbursed to the student
 Once LEU reaches 600%, student no longer
eligible for Pell
 May impact FSEOG eligibility
 If LEU is more than 500% but less than 600%, partial
eligibility for next award year
 COD release June 27 will include hard rejects for
disbursements over 600%
 Edits for 12/13 and beyond
13
2013-2014 CPS Enhancements
Pell Lifetime Eligibility Used (LEU)
Adding the Pell Lifetime Limit Flag from NSLDS to
the ISIR
• Adding the Pell LEU percentage to the NSLDS
pre-screening data and to the ISIR
• The Pell LEU % will be a 7-character field with an
implied decimal
–(example: xxxx.xxx%)
•
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Pell LEU
• If less than 100% eligibility remaining, handle
award like a transfer student
• Pay up to full amount allowed in first payment
period/term
• Pay remaining balance in subsequent payment
periods
• May round cents but cannot exceed 600%
– COD reaching out to those schools with 12/13
disbursements >600% through email campaign
•
15
There is no minimum payment
Pell – LEU (Example)
•
Student’s annual Pell award is $4800 (100%)
•
•
•
Student’s current LEU is 523.867% of 600% - Do not round %
Student has 76.133% LEU remaining
76.133% of the student’s annual award is $3654.384
Disburse 50% of annual award ($4800) 1st term =
$2400 (assuming full-time student)
• Disburse remainder of annual award in second
term, up to the remainder of their LEU = $1254.384
(26.133%)
•
•
May round the dollar amount down to $1254 (26.125%)
or award the cents $1254.38 (26.133%)
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COD Reporting Time Frames
2/28/13 Federal Register & 3/15/13 Elect. Ann.
 Pell, IASG, Direct Loans and TEACH disbursement
records (or adjustments) made on or after April 1,
2013, must be submitted to COD no later than 15
days after making the disbursement (or becoming
aware of an adjustment)
(Prior to April 1, 2013, disbursement records had to
be submitted within 30 days.)
 Expect a Federal Register notice for 2013-2014 will
require all reporting to be made within 15 days
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Declining a Pell Grant
Dear Colleague Letter, GEN-12-18
A student may:
• Decline all or a part of a Pell Grant award
• Return, during an award year, all or a part of a
disbursement already made within the same award year
The student must provide a signed, written statement:
• Clearly indicating his/her decline/return of Pell Grant funds
• Acknowledges that funds may not be available at a later
date
School must submit any required adjustment records for
the student to the COD System
Note: An institution may not package
18
need-based
Title IV aid to compensate.
19
Unusual Enrollment History
Dear Colleague Letter GEN 13-09
•
New Unusual Enrollment History Flag (UEH Flag) on the
2013-2014 ISIR
•
ED Reviews Pell Grant disbursements over last 3
completed award years
• School may have to review data to determine if valid
reasons exist for student’s unusual enrollment history
• School may have to deny further Title IV funds
•
Not related to verification tracking groups 4 or 5
20
NSLDS Identifies Records
NSLDS adds edits to identify records with unusual
enrollment histories and sets an NSLDS Unusual
Enrollment History Flag during Pre-screening process
Flag values
(N, Blank and
1- 3)
21
Unusual Enrollment History
Values for the NSLDS Unusual Enrollment History Flag
NSLDS Unusual
Enrollment
History Flag
Description
SAR C Flag?
SAR
Comment
2
Unusual Enrollment History 2 (Possible
enrollment pattern problem, school
may need to resolve)
Yes
359
3
Unusual Enrollment History 3
(Questionable enrollment pattern,
school must resolve)
Yes
360
N
Enrollment pattern not unusual (No
school action required)
No
N/A
22
UEH Flag = N and UEH Flag = 2

UEH Flag value = N No action is necessary
• UEH Flag value = 2 Must review student’s enrollment
and financial aid records to determine if, during the 3
award year review period (10/11,11/12, 12/13), student
received a Pell Grant at the institution that is
performing the review
If so, no additional action is required unless you believe
student remains enrolled just long enough to collect
student aid funds. In this case, must follow guidance
provided for a UEH Flag of 3.
• If not, must follow guidance provided for a UEH Flag of 3.
•
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UEH Flag = 3
•
Must review student’s academic records to determine if
student received academic credit at institutions student
attended during the 3 award year period
•
•
Identify institutions attended through NSLDS
Use transcripts or grade reports for each of the
previously attended institutions to determine whether
academic credit was earned during the award year in
which the student received Pell funds
(Academic credit is considered earned if academic
records show student completed any credit hours or
clock hours.)
24
UEH Flag = 3
•
Academic Credit Earned: If determine student earned
any academic credit at each of the previously attended
institutions during the relevant award years, no further
action is required unless institution has other reasons to
believe student enrolls just to receive credit balances
•
If determine that academic credit was NOT earned at
one or more of the previously attended institutions OR
the school had reasons to believe student just enrolls
for TIV funds, the institution must follow the
“Academic Credit Not Earned” guidance
25
UEH Flag = 3
Academic Credit NOT Earned: If student did not earn
academic credit at a previously attended institution,
including your school, must obtain documentation from
student explaining why failed to earn academic credit
• Must determine whether the documentation supports
•
(1) the reasons given by the student for the student’s failure to
earn academic credit; and
(2) that student did not enroll only to receive credit balances
•
26
To extent possible, obtain third party documentation to
support student’s reasons
UEH Flag = 3 Denying Eligibility
•
•
•
•
•
27
Institution determines whether circumstances of
failure to receive credit warrant continuation of
Title IV Aid – if not, must deny further aid
Reasons must be documented and maintained
Written denial must be provided to the student
Student must be given opportunity to question
and appeal the decision and information on how
to regain eligibility
Institutional determinations are final and can not
be appealed to the Department
UEH Continued Eligibility
•
Approving Continued Eligibility
•
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If school approves student’s continued eligibility, may:
• Require student to establish academic plan, like (SAP)
• Counsel student about the impact of the student’s
attendance pattern on future Pell Grant eligibility
Regaining Eligibility
•
•
School must provide student information on how to regain
Title IV eligibility
• Successful completion of academic credit would be the
basis for the student’s subsequent request for regaining
Title IV eligibility
• Could include meeting requirements of an academic plan
Authority
•
484(a)(4)(A) of the Higher Education Act of 1965
•
Student signs a Statement of Educational Purpose
• Student certified that Title IV aid would only be used to meet
educational costs
29
Public Law 112-141
Applies to “new” borrowers on or
after July 1, 2013
30
Subsidized Loan Limitation
•
When student has received subsidized loans for
150% of the published time of the academic
program –
• Student may not receive any additional
subsidized loans, and
• Subsidized loans received from July 1, 2013
lose their subsidy
• Special calculation for transfer students
• “Likely” that we will prorate for partial loans
31
Subsidized Loan Limitation Examples
Program Length
4-Year Bachelor’s Degree
2-Year Associates Degree
1-Year Certificate Program
10 Week Certificate
Program
32
Limitation on Subsidized
Loan Eligibility
6 Years of subsidized loan
eligibility
3 Years of subsidized loan
eligibility
1 ½ Years of subsidized
loan eligibility
15 Weeks of subsidized
loan eligibility
Subsidized Loan Limitation
 Transfers –
 Students maximum time to receive subsidized
loans is established based on the length of the
program the student is enrolled in
 Remaining subsidized eligibility is calculated
by subtracting from maximum eligibility for the
new program the time the student has already
received subsidized loans
33
Subsidized Loan Limitation
 Transfer Examples –
 Student receives two years of subsidized loans
while enrolled in a two-year program
 Student transfers to a four-year BA program
 Student has four years of remaining subsidized
loan eligibility
 Student receives three years of subsidized loans
while enrolled in a four-year BA program
 Student transfers to a two-year AA program
 Student has no remaining subsidized loan
eligibility
34
Subsidized Loan Limitation
 FSA will track, calculate, and inform
students and institutions
 Likely to be codes and comments on
SARs and ISIRs
 COD editing and enforcement
 Schools will need to provide program
information to COD & NSLDS
 Schools will need to update and correct
loan academic year dates and loan period
dates
35
College Choice Tools
Know Before You Go
Know Before You Owe
36
College Scorecard
College Scorecard
An online tool that
will make it easier for
students and families
to compare colleges
by comparing
information such as:
net price; graduation
rates; default rates;
student loan debt;
and earnings
potential
37
38
GEN-12-10
EA – 6/29/12
Student Specific
Information:
Cost of Attendance
Elements
Grants and Scholarships
Net price After Grants
Work Options
Loan Options
Other Options
Including Family
Contribution
39
Financial Aid Shopping Sheet
Institutional
Metrics:
Graduation rate
under “Student
Right-to-Know”
Most recent cohort
default rate
Median debt for
completers
Loan repayment
information
Contact information
40
Gainful Employment
We are currently reviewing the recent legal decision
about the Gainful Employment regulations.
We are unable to respond to any questions
related to Gainful Employment at this time,
but will provide additional guidance
in the near future
Electronic Announcement dated July 6, 2012 (GE EA #39)
• Provides background on decision
• Current school requirements
• Do not have to report annual data for 11/12
• Additional GE data not required to included for adding
new GE programs
• Disclosure requirements still in affect
41
Stay tuned to
IFAP for Updates!!!!
GE Disclosure Information
Electronic Announcement – 11/23/12
(GE EA #42)
•
By January 31, 2013 all schools must update their
disclosures for each of their GE Programs for the
2011-2012 award year
• Until the ED template is available, institutions must
make their GE Program disclosures using an
institutionally-determined format
42
43
HEOA Changes

Increased CDR monitoring period from two to three
years
 Beginning with the 2009 cohort, the calculation will be:
 Borrowers who default in that federal fiscal year or by
the end of the next two federal fiscal years.
 Establishes a three-year transition period for
sanctions
 On
9/17/12 - released the FY 2010 2-Year CDRs to schools
 On 9/24/12 - released the FY 2009 3-Year CDRs to schools
 Draft FY2011 2-yr and FY2010 3-yr released March 2013
44
FY 2010 2-Year Official National Student Loan Default Rates
Issue
Date
1989 1990 1991
1992
1993
1994
1995 1996
1997
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
2010
2011 2012
25
22.4%
21.4%
20
Cohort Default Rate
17.6%
15
17.2%
17.8%
15.0%
New
10.7% 10.4%
10
9.1%
8.8%
8.8%
11.6%
9.6%
6.9%
6.7%
7.0%
5.6% 5.9%
5
5.4% 5.2%
4.5%
5.2%
5.1%
4.6%
0
1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Cohort Years
45
FY 2009 3-Year Official National Cohort Default Rates by Sector
25
23.1%
22.9%
22.7%
23.0%
20
18.3%
16.2%
14.5%
15
11.0%
10
Proprietary
Proprietary
Proprietary
7.3%
Proprietary
Private
Private
Private
7.3%
Foreign
7.5%
Private
Public
Public
5
Public
7.9%
Public
Cohort Default Rate (%)
21.5%
0%
0
Sector
46
Transition Period
47
Default Sanctions*

Default Prevention Plans
 1st
year CDR is equal to or greater than 30%
 Establish
a default prevention task force; and
 Develop and submit a default prevention plan to ED
2
consecutive CDRs equal to or greater than 30%
 Revise
and submit default prevention plan
 ED may require specific adjustments/actions
3


48
consecutive CDRs equal to or greater than 30%
Lose Direct Loan AND Pell Grant eligibility
1 CDR above 40% lose Direct Loan eligibility
*ability to appeal/
challenge rates
Loan Exemptions

Schools are exempt from waiting 30 days to disburse
to first-time, first year borrowers and from providing
multiple disbursements for a single term loan if:
3
official default rates below 15% for each of the three
most recent fiscal years for which data are available
 Official CDRs can all be from the same rate calculation
(e.g. all 2-yr rates) or from either the 2 or 3 year rates as
long as they are from different fiscal years
 For
example, a school could meet the exception with the
following rates – FY09 2-yr; FY10 3-yr rate; FY11 2-yr
49
Default Prevention

ED’s Default Prevention Resource Center
 http://ifap.ed.gov/DefaultPreventionResourceInfo/index.html
 defaultpreventionassistance@ed.gov.
 Right-hand

side of IFAP home page
Webinar Recordings –Default Prevention Conference
 Several
different presentations
 ANN-12-18 (http://ifap.ed.gov/dpcletters/ANN1218.html)

ED Cohort Default Rate contacts
 (202)
50
377-4259; fsa.schools.default.management@ed.gov
51
studentloans.gov for 2013-2014
Studentloans.gov has brought ALL FSA loan
counseling tools together on one website
•
Entrance Counseling
 Subsidized & Unsubsidized and
Graduate/Professional Student PLUS
• Exit Counseling
 NSLDS will continue to provide detailed Exit
Counseling reports and you’ll continue to obtain
demographic and reference information from that
website as you do today
• Financial Awareness Counseling
52
studentloans.gov for 2013-2014
New “Repayment Estimator” to the website
On the “My Preferences” screen
• Authenticated users will see loan data from NSLDS,
the prospective eligibility of each loan for a particular
repayment plan, and estimate the payment for a
particular plan based on several factors including…
 Loan type
 Loan balance
 Income
 Family size
 Where you live
•
53
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Negotiated Rulemaking Hearings
•
•
•
•
•
•
•
55
Cash management
State authorization for distance education
programs
State authorization for foreign locations of
domestic institutions
Clock to credit hour conversion
Gainful employment
Campus safety and security reporting
Definition of “adverse credit” for the direct PLUS
loan program
April 16 Federal Register
Future Federal Registers
Other Student Loan Issues
 “Naturally
readable” Direct Loan regulations
 Various aspects of defaulted borrower process
 Loan Rehabilitations
 Perkins loan issues – deferments, enrollment reporting,
loan assignments…
Spring 2013 Negotiated Rule-Making
May 1, 2012 Federal Register Notice
• Topics – preventing fraud; use of debit cards and other
banking mechanisms for disbursing TIV; improve and
streamline campus-based programs
•
56
Future Federal Registers
Teacher Preparation and TEACH Grants
 Institutional reporting & State accountability –
quality of teacher preparation programs
 “High Quality” Program and Services
Definitions associated with school eligibility to
participate in TEACH Grant
 Service and Repayment obligations for TEACH
57
Federal Register – 9/27/2012
• Updated
Waivers to HEROES Act
– Assist military service members called to active duty or
qualifying National Guard duty
– Assist those residing or working in a declared disaster area
tied to a national emergency, war or military operations
– Waivers and Modifications include:
- No grant overpayments owed under R2T4
- Signed statements of tax extensions
- LOA requests to not have to be in writing
- Credit balance timeframe met if contact attempted
- Can hold balance up to 45 days
58
Federal Register – 9/27/2012
• Updated
Waivers to HEROES Act
–Waivers and Modifications include:
- 60 day loan cancellation period
- verbal authorizations allowed
- various loan statuses and payment requirements
- parental verification & FAFSA signature
requirements
- Effective 9/27/12 through 9/30/17
59
Federal Loan Programs
– July 17, 2012
 Final Federal Register - November 1, 2012
 NPRM
 Effective date – July 1, 2013
 Federal Register - December 7, 2012
 Early implementation of Pay as You
Earn repayment plan effective 12/21/12
60
Federal Loan Programs
 Maintain
current Income Contingent Repayment
plan (ICR) with adjustments in notification
documentation and loan forgiveness process
 Create new ICR plan based on future changes to
IBR - Pay As You Earn repayment plan
 Max annual payment capped at 10% of discretionary
income; loan forgiveness after 20 years of qualifying
payments; partial financial hardship requirements;
adjustments for married borrowers depending on
filing status
 Electronic application – studentloans.gov
61
Federal Loan Programs
• Modify
IBR plan to incorporate SAFRA Act
Changes
 Becomes effective July 1, 2014
 Redefine new borrower and partial financial hardship
 Maximum monthly payment limited to 10% of
discretionary income
 Loan forgiveness after 20 years of qualifying payments
 Improve notification requirements
 Revised repayment requirements for borrowers who
leave IBR
62
Federal Loan Programs
Total and Permanent Disability Discharge
 Perkins, FFEL and Direct Loans
 Borrowers representative can be involved in entire
process
 Borrowers apply for discharge directly to ED who will
notify all lenders
 ED to create an OMB form for reporting earnings
 Ensure application process for veterans with VA
documentation similar to non-veteran process
 Revise provisions to require payments by borrowers
after discharge is granted be returned to the borrower
63
Federal Loan Programs
Total and Permanent Disability Discharge
 Permit a TPD discharge based on a borrower’s
Social Security Administration (SSA) notice of
award for Social Security Disability Insurance
(SSDI) benefits or Supplemental Security Income
(SSI) benefits IF classified as permanently
impaired—medical improvement not expected
(reviewed by SSA every 5-7 years)
 Borrowers still subject to the three-year
discharge review that is currently in place
64
65
State Authorization
•
•
•
•
•
66
GEN-13-4
34 CFR 600.9(a) and (b)
Schools must be legally authorized by the state
to provide postsecondary education
States must provide oversight and approvals that
meet regulations
States must have a process to review and act
upon complaints
States that were not able to provide appropriate
authorizations were given until July 1, 2013
Dear Colleague Letters
•
GEN-13-07– Net Price Calculator
• Q & As; References
• GEN-13-02 – Direct Loan Funds
• inadvertent overborrowing; failure to attend
• GEN-13-01 – Only two types of DCLs (GEN & ANN)
• GEN-12-19 – New Perkins MPN
• Must use by January 1, 2013
67
Electronic Announcements
•
•
•
•
68
3/25/13 - Transition to New NSLDS Enrollment
Reporting File Layouts and Retirement of SSCR
Software
3/8/13; 3/12/13 – changes to log-in process for specific
ED systems including rules of behavior and annual
security training and COD access criteria
1/18/13 – ED social media tools to promote FAFSA
completion
1/18/13 – enhancements to MyStudentData download
on NSLDS
69
Training
•
2012 FSA Conference
•
•
•
FSA Fall Webinar Series – October 2012
•
•
•
R2T4 Modules, R2T4 Clock Hours, Clock Hour Issues,
Campus-Based Programs, future Q & A session
ANN-12-21 (recordings will be posted to IFAP)
Fundamentals of Federal Student Aid Administration
•
•
70
http://fsaconferences.ed.gov/
Download presentations; view recorded sessions
ANN-12-22
New requirements – CEO/owner must attend entire training;
to register participants must complete online training
70
Resources
•
2013 BLUE BOOK
• http://ifap.ed.gov/ifap/BlueBook.jsp?year=2013
•
Designed to provide guidance to business and fiscal
officers on accounting, recordkeeping, managing,
and reporting federal student aid programs
•
IFAP.ed.gov website
• “My IFAP” – left-hand side
• Campus-Based Call Center
• 877-801-7168; cbfob@ed.gov
71
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Training Evaluation
To ensure quality training, we ask all participants to
complete an online evaluation for each session
•
https://s.zoomerang.com/s/DeborahTarpley
•
•
•
72
Evaluation form is specific to Deborah Tarpley
Feedback is a tool to help us improve our training and to
listen to our customers
Additional comments regarding training can be directed to
mark.gerhard@ed.gov
Contacts
•
Denver School Participation Team
• Main Number: 303-844-3477
• Leave a message, it will get routed
•
Denver Training Officers
• Margaret Day – 303-844-3146
• Rick Renshaw – 303-844-0433
• Deborah Tarpley - 303-844-3683
•
Email – firstname.lastname@ed.gov
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