Perkins Loan Program

ILASFAA Leaves of Change: Harvesting New Ideas
Federal Update
November 2015
Angela Smith, Training Officer
U.S. Department of Education
Prior – Prior and Early
FAFSA Start-Up
Prior-Prior Year
President’s Announcement –
FAFSA Start-Up on October 1
• Use of Prior-Prior Income Data
Beginning with the 2017-2018 FAFSA
October 1, 2016
• 2015 Tax Year
• Conflicting information
• Outreach
• Professional Judgement
• State grant agencies
• Early awarding
• Deadlines
FAFSA – List of Schools
Beginning with the 2016-2017 FAFSA the
names colleges listed by applicants on
FAFSAs will not be included on ISIRs
provided to institutions.
• Will continue to be included on ISIRs
provided to state grant agencies
• Will be on the SAR provided to the FAFSA
Perkins Loan Program
(DCL GEN-15-3)
Perkins Loan Program
• Dear
Colleague Letter GEN-15-03
• No congressional action - program
ended on September 30, 2015
• Schools may not make Federal
Perkins Loans to new borrowers after
September 30, 2015.
Perkins Loan Program
If prior to October 1, 2015, a school makes
the first disbursement of a Federal Perkins
Loan to a student for the 2015-2016 award
year, the school may make any remaining
disbursements of that 2015-2016 loan after
September 30, 2015.
Perkins Loan Program
Narrow “grandfathering” provision
• Allows schools to make Perkins Loans to certain
students for up to five additional years (through
September 30, 2020) to enable students who
received loans for award years “to continue or
complete courses of study.
• Loans can be made only if ALL of the following
conditions are met:
Perkins Loan Program:
Grandfathering provision
The school made at least one loan disbursement
to the student on or before June 30, 2015.
• The student is enrolled at the same institution
where the last Perkins Loan disbursement was
• The student is enrolled at the same academic
program for which the last Perkins Loan
disbursement was received.
• Need remains after Direct Sub awarded
Must I liquidate my Perkins
Note: While currently the Department cannot require schools
liquidate, Section 466(c) of the Higher Education Act requires
institutions to return to the Department of Education
(Department) the Federal share of any Excess Liquid Capital
(ELC) in the institution’s Federal Perkins Loan Revolving Fund
(Fund). This statutory requirement for institutions to return ELC
is not directly related to the wind-down of the Perkins Loan
See DCL GEN-15-19, published September 29, 2015 for details.
Perkins Loan Program:
Excess Liquid Capital
DCL GEN-15-19
• Attached Excel Work-Sheets
Calculate Excess Cash
• Calculate Federal/School Shares
Return Federal Funds by December 31,
ATB and Career Pathway
ATB and Career Pathway
Consolidated and Further Continuing Appropriations
Act, 2015
• Establishes Ability-to-Benefit alternatives for students
without a high school diploma, or equivalent (or home
schooled) who are enrolled in an eligible “Career
Pathway” “Program”.
• ATB –
Pass an ED approved ATB test
State Process (none have ever been submitted)
Complete six credit hours (or equivalent)
Beginning July 1, 2015, reduced Pell Grant payment
ATB and Career Pathway
Career Pathway Program:
Concurrently enrolls students in “connected adult
education” and an eligible Title IV academic program
Provides counseling and supportive services
Provides “structured course sequences”
Provides opportunities for acceleration
Organized to meet the needs of adults
Aligned with the education and skill needs of the
regional economy
Developed in collaboration with business, workforce
development, and economic development.
Limited Pell Grants
Any student whose first enrollment in ANY
Title IV eligible postsecondary program
was on or after July 1, 2015, and is eligible
under one of the ATB alternatives for
enrollment in an eligible career pathway
program, will ONLY be eligible for a limited
Pell Grant award
• Maximum limited Pell Grant amount for
2015/16 is $4,860
2016-17 Verification – Overview
Same data elements as for 2015-2016 award
Some modifications and clarifications to
acceptable documentation
In limited circumstances, an applicant’s
Verification Tracking Group could change
• Federal Register Notice – June 26, 2015
• Suggested Text – Coming soon!
2016-17 Verification
Verification Tracking Group changes:
Verification Tracking Group V3 (Child Support
Paid) has been removed
• Applicants placed in V1, V4, V5, and V6 must
still verify child support paid if reported on ISIR
2016-17 Verification
Verification Tracking Group changes:
Applicants may be moved from previously
assigned Groups V1, V4, and V6 to Verification
Tracking Group V5
• Applicant is only required to verify the additional
items in V5 that were not previously verified
• If the applicant is moved to Verification Tracking
Group V5, no additional disbursements of any
Title IV aid may be made until verification is
satisfactorily completed
2016-17 Verification
Verification Tracking Group changes:
Applicants moved to Verification Tracking Group
• If Title IV aid had been disbursed prior to
receiving an ISIR with the new V5, and the
applicant does not complete verification, the
applicant is liable for the full amount of TIV aid
disbursed for 2016-2017
• The institution is not liable
2016-17 Verification
Income Information for Non-IRS Tax Filers
• Tax filers who filed an income tax return with a
taxing authority in a U.S. territory (Guam,
American Samoa, the U.S. Virgin Islands) or
commonwealth (Puerto Rico and the Northern
Mariana Islands) or with a foreign central
government, must submit a copy of a
transcript of their tax information
A signed copy of the applicable 2015 income tax
return that was filed with the taxing authority is only
acceptable if tax filers are unable to obtain a free
copy of a transcript of their tax information
2016-17 Verification
Income Information for Non-IRS Nontax Filers
• Residents of the Freely Associated States
(Republic of the Marshall Islands, the Republic of
Palau, the Federated States of Micronesia), and a
U.S. territory or commonwealth or a foreign central
government who are not required to file an income
tax return under that taxing authority’s rules must
a copy of their Wage and Tax Statement (or equivalent
documentation) for each source of employment income
a signed statement identifying all of the individual’s
income and taxes
Verification Policy Updates
Tax filers and Nontax filers—if a copy of the tax
return was not retained and cannot be located
by the IRS, must submit:
Copy of all relevant W-2s
• Signed statement that individual did not retain a
copy of his or her tax account information, and
• Documentation from the IRS that indicates that the
individual’s tax account information cannot be
Child support paid
Removed a separation agreement or divorce
decree from acceptable documentation
Verification Policy Updates
High School Completion Status
• For V4 and V5, if institution successfully verified and
documented applicant’s high school completion status
for a prior award year, verification of high school
completion status is not required for subsequent years
• An institution may not accept as alternative
documentation an applicant’s self-certification, nor a
DD Form 214 Certificate
Identity/Statement of Educational Purpose
• The valid government-issued photo identification used
to verify an applicant’s identity must not have expired
Verification Policy Updates
Victims of IRS tax-related identity theft must
Statement signed and dated by tax filer indicating
they were victims of IRS tax-related identity theft
and the IRS has been made aware of the taxrelated identity theft; and
• A Tax Return DataBase View (TRDBV) transcript
obtained from the IRS
Tax filers who cannot obtain a TRDBV transcript may instead submit
another official IRS transcript or equivalent document provided by the
IRS if it includes all of the income and tax information required to be
Guidance applies to 15/16 and subsequent years
• Posted in 6/26/15 Federal Register Notice
Verification Policy Updates
Individuals who filed an amended tax return
must submit:
an IRS Tax Return Transcript, or any other IRS
tax transcript(s) that include all of the income
and tax information required to be verified; and
• a signed copy of the IRS Form 1040X that was
filed with the IRS
Guidance effective 8/13/15 for 15/16 and subsequent years
• Posted on Program Integrity Q & A website
2015-2016 – Transcripts
EA dated October 2, 2015
Alternative documentation allowed when tax
filer RECENTLY requested but unable to
obtain an IRS Tax Return Transcript using the
IRS paper or on-line request process
No alternative documents for telephone requests
• Exception not permitted for –
transcripts unable to be obtained simply because the IRS has not
had time to process the data due to a recent filing
• saying the "Get Transcript Online" tool is not available
2015-2016 – Transcripts
Alternative documentation includes:
• Signed copy of relevant 2014 IRS tax return
Statement from tax filer, on or attached to the return,
certifying same data submitted to the IRS
Communication from IRS stating request unsuccessful
Letter from IRS (signed and dated by tax filer); or
Screen shot print (signed and dated by tax filer)
Completed and signed IRS Form 4506 T-EZ or 4506-T
listing institution as third party
Regulatory Update
Borrower Defenses
Rules to allow borrowers to request loan
discharge based on a borrower defense of
school misrepresentation
• August 20, 2015 - Federal Register Notice:
Public Hearings
• October 20, 2015 – Federal Register
Notice: Negotiator Nominations and
Schedule of Committee Meetings
Borrower Defenses
Schedule for Negotiations
Session 1: January 12–14, 2016
• Session 2: February 17–19, 2016
• Session 3: March 16–18, 2016
Revised Pay As You Earn
Negotiations held February - April, 2015;
Committee reached consensus
• NPRM published July 9, 2015; 30-day
comment period ends August 10, 2015
• Final regulations published on October 30
• Early implementation in December 2015
Proposed Changes for REPAYE
Extends the 10 percent payment cap to an
additional 6 million loan borrowers.
• Creates a streamlined process to identify
military service members who hold FFEL
program loans and who are eligible for
lower interest rates.
Cash Management
Negotiations held in early 2014
• NPRM published in May of 2015
• Public comment period closed July 2, 2015
Received over 200 comments
Final regulations published on October 30
• Effective July 1, 2016
Cash Management
Proposed regulations include tougher
standards and greater transparency around
agreements between colleges and
companies providing prepaid/debit cards to
Meaningful choice of products
• Clear and neutral information
• Looking at fees charged
Gainful Employment
The HEA provides that to be Title IV eligible an
educational program must be offered by:
A public or non-profit
institution and leads
to a degree; or
Any institution and “to
prepare students for
gainful employment in a
recognized occupation”.
Generally, all non-degree
programs must lead to
gainful employment
Generally, all programs
must lead to gainful
Gainful Employment (GE)
Rules became effective July 1, 2015
• Published DCL GEN-15-12 on June 30,
2015, summarizing the rules
• Reporting of data by July 31, 2015 and by
October 1, 2015
Which Programs are GE
At public institutions and not-for-profit
institutions, all NON-DEGREE programs
are GE Programs except for –
Programs of at least two years in length that are
designed to be fully transferable to a bachelor’s
degree program
• Preparatory coursework necessary for
enrollment in an eligible program (loan only)
Which Programs are GE
At proprietary institutions, all programs are
GE Programs except for –
Preparatory coursework necessary for
enrollment in an eligible program
• Bachelor’s degree programs in liberal arts
offered since January 2009 that are offered by a
proprietary institution that has been regionally
accredited since October 2007
Gainful Employment Measure
Debt-to-earnings (D/E) rates
Annual Earnings D/E rate
• Discretionary Income D/E rate
• Passing: Annual D/E < = 8% or Discretionary
D/E < = 20%
• Failing: Annual D/E > 12% or Discretionary >
• Zone: Annual D/E > 8% and < = 12% or
Discretionary D/E > 20% and <= 30%
Gainful Employment Results
Program’s loses Title IV eligibility if:
D/E measures – Fails in two out of three years;
• D/E measures - Fails or in the zone for four
consecutive years
GE Reporting
Report all Title IV Students by July 31,
Report 2008 – 2009 through 2013 – 2014 award
• Programs with Medical and Dental Residencies
report 2007 – 2008 through 2013 – 2014 award
Report following award years by October.
Report 2014 – 2015 Award Year by October 1,
Gainful Employment
Beginning in 2017, in addition to program
information will include:
• D/E rates
• Loan repayment rates
• Completion rates
• Withdrawal rates
• Placement rates
• Median loan debt
• Percent borrowing
December 31, 2015 – Transitional
Certifications Due
Signed by CEO, Chancellor, or equivalent
Certifications renewed when institution
recertifies Program Participation
Agreement (PPA)
Each currently eligible GE Program is:
Approved by accrediting agency and State.
• Is programmatically accredited if that is required
for that profession in the state.
• Graduates qualify to meet licensing or
certification exam requirements to work in the
state, if any.
 Certification
processing instructions and
sample certification language are attached
to the GE EA #54
 Questions/concerns, please email
GE Resources
2015 FSA Training Conference!!
• Tuesday, December 1 –
Friday, December 4, 2015
• Conference and lodging
registration are open now!
– Over 5,400 currently registered
– Mandalay Bay is sold out!
– Delano Hotel still available
• Tentative agenda is posted.
The HEA turned
Active Contracts
Active Contracts List
on ED’s OCFO’s website:
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