Private Career Colleges Schools Region V Federal Update May 20, 2008 Dan Klock Federal Student Aid U.S. Department o

1. Private Career Colleges & Schools Region V Federal Update May 20, 2008 Dan Klock Federal Student Aid U.S. Department of Education

2. 2 Legislation and Budget

3. 3  LEGISLATION Ensuring Continued Access to Student Loans Act of 2008 (ECASLA) Pub. L. 110-227 College Cost Reduction and Access Act (CCRAA) Pub.L. 110-84 Reauthorization S 1642 passed full Senate on July 24, 2007 HR 4137 passed full House on February 7, 2008 In conference, final bill expected in May

4. 4 Title IV Program Budgets Appropriations and Budget Request

5. 5 Title IV Program Budgets Aid Available

6. 6 Ensuring Continued Access to Student Loans Act of 2008

7. Ensuring Continued Access to Student Loans Act Pub. L. 110.227 enacted on May 7, 2008 Increased annual and aggregate Stafford loan amounts (see upcoming slide) Provides relief in the PLUS loan program for students and parents who have had credit problems ECASLA made changes to the ACG/National SMART Grant programs

8. Ensuring Continued Access to Student Loans Act Lender of last resort GEN-08-03, FP-08-03 GEN-08-05, FP-08-05 All types of FFELP loans (except consolidation loans) must be made under LLR LLR loans will be made with the statutory max interest rates, orig. & default fees

9. Ensuring Continued Access to Student Loans Act

10. Ensuring Continued Access to Student Loans Act

11. Ensuring Continued Access to Student Loans Act

12. Ensuring Continued Access to Student Loans Act

13. 13 College Cost Reduction and Access Act

14. 14 Student BenefitsGrant Programs

15. 15  Federal Pell Grant Increases discretionary appropriated Pell Grant award amount using mandatory funds. Full-time awards increased by � $ 490 for 2008-09 and 2009-10. Maximum Award $4,731 08-09, $4,800 for 09-10 $ 690 for 2010-11 and 2011-12. $1,090 for 2012-13. 2008-2009 Payment Schedule Released on January 14, 2008 (See DCL P-08-01)

16. 16  TEACH Grants �Teacher Education Assistance for College and Higher Education Grants� 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 completing program, as a - Highly Qualified Teacher At a Title I school In a specified subject area.

17. 17  TEACH Grants 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. If converted to loan � Does not count against annual or aggregate maximums. Interest accrued from date of grant disbursement.

18. 18 Student BenefitsNeeds Analysis and EFC Calculation

19. 19  Need Analysis and EFC Calculation Income Protection Allowances in EFC formulas. Modifies the way student income protection allowances are calculated and updated. Not parent income protection allowances Will result in lower EFC. Effective with the 2009-2010 award year.

20. 20  Need Analysis and EFC Calculation Auto-Zero and Simplified Needs Test 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 the 2009-2010 award year.

21. 21  Need Analysis and EFC Calculation Excludes from specified list of �untaxed income� - Welfare payments Untaxed Social Security Benefits Earned income credit amounts Special fuel tax credit Excluded foreign income Effective for the 2009-2010 award year.

22. 22  Need Analysis and EFC Calculation Adds to independent student definition � Is in foster care or a ward of the court, at any time when the individual is 13 years of age or older. Is 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 the 2009-2010 award year.

23. 23  Need Analysis and EFC Calculation 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 the 2009-2010 award year.

24. 24 Borrower Benefits

25. 25  FFEL and Direct Loans Interest Rates Reduces interest rates on undergraduate subsidized loans only from current 6.8% to � 6.0% for loans disbursed on or after July 1, 2008 5.6% for loans disbursed on or after July 1, 2009 4.5% for loans disbursed on or after July 1, 2010 3.4% for loans disbursed on or after July 1, 2011 Beginning July 1, 2012, rates revert to 6.8%. Unsubsidized Stafford Loans and all Staffords for grad students remain at 6.8% fixed.

26. 26  FFEL and Direct Loans Income Based Repayment Stafford and Student PLUS loans. Borrower�s maximum annual repayment amount no more than 15% of the difference AGI and 150% of the poverty line based on family size. If negative amortization, government pays interest on subsidized loans for up to three years. Unpaid amounts are forgiven after 25 years. Effective July 1, 2009.

27. 27  Direct Loans (FFEL) Forgiveness for Public Service Employees Direct Loan borrower who � Makes 120 monthly payments, starting after October 1, 2007, and Is employed in public service during period when the 120 payments were made. FFEL borrowers may consolidate into Direct Loans to get benefit but 120 payments must have been in Direct Loans.

28. 28  Direct Loans (FFEL) Forgiveness for Public Service Employees Payments count if made under � Income Contingent Repayment. Income Based Repayment. Other repayment plans, if payments are at least equal to 10-year standard repayment amount.

29. 29  Perkins, FFEL, and Direct Loans Military Deferments HERA Military Deferment � All Title IV loans, not just loans that were made on or after July 1, 2001. Removes three year time limit. Adds a 180 day period after demobilization. New deferment for up to 13 months following end of service for certain borrowers who were in school or grace when called to active duty. Effective October 1, 2007.

30. 30 Offsets from FFEL Program

31. 31  FFEL Lenders and Guaranty Agencies Reduction of FFEL lender insurance from current 97% to 95% for loans first disbursed on or after October 1, 2012. Reduction of FFEL guaranty agency defaulted loan collections retention rate from 23% to 16%, effective October 1, 2007. Reduction of FFEL lender special allowance payments (SAP) by 55 basis points (40 for non-profit lenders).

32. 32 NegotiatedRulemaking

33. 33 2007-2008 Negotiated Rulemaking Loan Issues Committee Three Negotiated Rulemaking Sessions Jan 14-16, Feb 4-6, March 4-6, and April 14-16 NPRM to follow Comment Period Final Rule by November 1, 2008 Implementation July 1, 2009

34. 34 2007-2008 Negotiated Rulemaking Loan Issues Committee Issues Income-based Repayment Plans (IBR) (FFEL and Direct Loans) Public Service Loan Forgiveness (FFEL and Direct Loans) Economic Hardship and Military Service Deferments (FFEL, Direct Loans, and Perkins) Definition of Not-for-Profit Holder

35. 35 2007-2008 Negotiated Rulemaking Teach Grant Committee Conducted three Negotiated Rulemaking Sessions Jan 8 � 10, Jan 22-24, and Feb 6 � 8 Consensus Met NPRM on March 21 Comment Period ends on April 21 Final by June 1, 2008 Implementation July 1, 2008

36. 36 2006-2007 Negotiated Rulemaking Loans - NPRM Published July 12 Final Published November 1 ACG/SMART - NPRM Published - August 7 Final Published October 29 General Prov. - NPRM Published August 8 Final Published November 1 Effective Dates: July 1, 2008 Possible early voluntary implementation

37. 37 2006-2007 Negotiated Rulemaking

38. 38 2006-2007 Negotiated Rulemaking Consistent definitions of enrollment status and academic level (grad/undergrad) Addressing inconsistencies in the award of aid in nonstandard and nonterm programs Aligns disbursements for all Title IV grant and loan programs (with a few exceptions)

39. 39 2006-2007 Negotiated Rulemaking

40. 40 2006-2007 Negotiated Rulemaking

41. 41 Mandatory Assignment of Defaulted Perkins Loans Schools hold more than $400 million in Perkins Loans that have been in default for 5 or more years Little collection activity seen on these loans. ED streamlined the voluntary assignment procedures, to encourage schools to assign their aged, defaulted loans

42. 42 Mandatory Assignment of Defaulted Perkins Loans Secretary may require assignment of a Perkins Loan if� Outstanding principal balance is $100 or more, In default for 7 or more years, and No payment has been received in past 12 months ED will notify schools when to assign loans.

43. 43 Preferred Lenders School may choose to have preferred lender(s) list (includes web processes) List must have at least 3 unaffiliated lenders Must disclose method/criteria for lender inclusion on the list Must provide comparative information on borrower benefits offered by listed lenders

44. 44 Preferred Lenders Must include prominent statement advising borrowers that use of school preferred lender not required Cause any unnecessary delays in certification for borrowers not using one of the school�s preferred lenders

45. 45 Prohibited Inducements Affects FFEL lender and guaranty agency eligibility and participation in the program. Creates concept of �rebuttable presumption� for prohibited and allowed activities. Includes a non-exhaustive list of prohibited activities. Includes a list of allowed activities.

46. 46 Prohibited Inducements Prohibited activities include: Payments to prospective borrowers, including prizes and additional financial aid Payments or other benefits to a school, school-affiliated organization, or individual for loan applications, volume of loans made, or placement on a preferred lender list

47. 47 Prohibited Inducements Prohibited activities include: Payments or other benefits to student lender reps on campus or other solicitors to secure loan applications from prospective borrowers Payment of referral or processing fees to another lender or other party Payment of conference or training registration, transportation, and lodging costs for school or school-affiliated organization employees

48. 48 Prohibited Inducements Prohibited activities include: Providing staffing to a school except on a short-term, emergency basis Payment of entertainment expenses related to lender-sponsored activities for school or school-affiliated employees Undertaking philanthropic activities in exchange for FFEL applications, volume, or placement on a school�s preferred lender list

49. 49 Prohibited Inducements Allowed activities include: Assistance to schools comparable to that provided DL schools by the Secretary Support or Participation in student aid/financial literacy outreach with schools and guaranty agencies Toll-free numbers for FFEL info and school loan data transmission

50. 50 Prohibited Inducements Allowed activities include: Reasonable costs of meals, refreshments, and receptions for meeting, training, or conferences if open to all attendees Reduced origination fees and interest rates Payment of Federal Default Fees Borrower benefits under repayment incentive programs Items of nominal value

51. 51 Prohibited Inducements Allowed GA activities include: Payments for default aversion activities approved by the Secretary. Payments for expenses related to participation in GA�s governing board, official advisory committee, or for other official GA-sponsored activities.

52. 52 Training

53. On Going Training Financial Aid Basics Held at regional offices Fundamentals for Title IV This is for newly certified schools Creating a library

54. 54 Financial Aid Professionals Portal under �Resources and Training� No sign-on necessary

55. 55 TFAP

56. 56 Training via the Web COD Basics for Direct Loans NSLDS Data Overview Available as Podcasts Applicant data resolution Identifying information sources with FAA Access Resolving data issues

57. Saved Webcasts Available Through Web Screening Webinar on the College Cost Reduction and Access Act (CCRAA) Two Webinars on New Regulations

58. 58 Upcoming FSA Training Teach Grant Operational Webinar � April 10 Direct Loan and COD Webinars � April 8 and 15 Spring 2008 Stand Up training in regional offices and some college campuses April 15 through June 16 CCRAA New Federal Regulations posted November 2007 With your support, we will continue to encourage students to use the online method for filing the application. The FOTW Worksheet, the most effective tool students can use to facilitate the online application process, will still be available for bulk order by schools. In addition, Federal Student Aid has several promotional publications (e.g., the Need Money for College Brochure, Start Here Go Further Bookmark, the FAFSA on the Web Poster) that list application resources, explain how students can file the FAFSA and provide tips for completing the application. New for 2008-2009 is a PDF version of the FAFSA that students can submit for processing. The PDF version of the FAFSA will be available for download on various Federal Student Aid web sites, such as www.FederalStudentAid.ed.gov. Students can access the PDF, complete the form on the computer or by hand, and mail it to the address provided for processing. Schools will also be able to access the PDF from our web sites including FSAPubs at www.FSAPubs.org. With your support, we will continue to encourage students to use the online method for filing the application. The FOTW Worksheet, the most effective tool students can use to facilitate the online application process, will still be available for bulk order by schools. In addition, Federal Student Aid has several promotional publications (e.g., the Need Money for College Brochure, Start Here Go Further Bookmark, the FAFSA on the Web Poster) that list application resources, explain how students can file the FAFSA and provide tips for completing the application. New for 2008-2009 is a PDF version of the FAFSA that students can submit for processing. The PDF version of the FAFSA will be available for download on various Federal Student Aid web sites, such as www.FederalStudentAid.ed.gov. Students can access the PDF, complete the form on the computer or by hand, and mail it to the address provided for processing. Schools will also be able to access the PDF from our web sites including FSAPubs at www.FSAPubs.org.

59. 59 Upcoming FSA Training Federal Student Aid Conferences � October 28 - 31, 2008 Hyatt Regency Dallas Dallas, Texas December 2-5, 2008 Paris/Bally's Las Vegas, Nevada With your support, we will continue to encourage students to use the online method for filing the application. The FOTW Worksheet, the most effective tool students can use to facilitate the online application process, will still be available for bulk order by schools. In addition, Federal Student Aid has several promotional publications (e.g., the Need Money for College Brochure, Start Here Go Further Bookmark, the FAFSA on the Web Poster) that list application resources, explain how students can file the FAFSA and provide tips for completing the application. New for 2008-2009 is a PDF version of the FAFSA that students can submit for processing. The PDF version of the FAFSA will be available for download on various Federal Student Aid web sites, such as www.FederalStudentAid.ed.gov. Students can access the PDF, complete the form on the computer or by hand, and mail it to the address provided for processing. Schools will also be able to access the PDF from our web sites including FSAPubs at www.FSAPubs.org. With your support, we will continue to encourage students to use the online method for filing the application. The FOTW Worksheet, the most effective tool students can use to facilitate the online application process, will still be available for bulk order by schools. In addition, Federal Student Aid has several promotional publications (e.g., the Need Money for College Brochure, Start Here Go Further Bookmark, the FAFSA on the Web Poster) that list application resources, explain how students can file the FAFSA and provide tips for completing the application. New for 2008-2009 is a PDF version of the FAFSA that students can submit for processing. The PDF version of the FAFSA will be available for download on various Federal Student Aid web sites, such as www.FederalStudentAid.ed.gov. Students can access the PDF, complete the form on the computer or by hand, and mail it to the address provided for processing. Schools will also be able to access the PDF from our web sites including FSAPubs at www.FSAPubs.org.

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