Federal Update NASSGAP October 29, 2014 Jeff Baker

1. Federal Update NASSGAP October 29, 2014 Jeff Baker

2. FAFSA Completion Initiative

3. FAFSA Completion Initiative • President Obama announced the launch of this “FAFSA Completion Initiative” to help ensure that more of America’s students take the first step towards college success: completing the Free Application for Federal Student Aid (FAFSA) form. • Secretary Duncan, noted that research has shown that, “one simple step by students--completing the Free Application for Federal Student Aid (FAFSA) form--could have a powerful impact on both student enrollment and persistence”.

4. FAFSA Completion Initiative • Under the Initiativestate grant agencies are allowed to provide limited student-level data about an applicant’s progress in completing the FAFSA with secondary schools, local education agencies (LEAs) and “designated entities. • Objective is to increase the number of low-income high school graduates who enter college. • Providing FAFSA Filing Status Information will enable schools, LEAs, and designated entities to target resources toward those students needing help.

5. FAFSA Completion Initiative • Under the Initiative, participating state grant agencies voluntarily enter into data sharing agreements with schools and schools districts. • Once those data-sharing agreements are in place, the agencies can share FAFSA Completion Information about the FAFSA applicants for whom the agency has received an ISIR from ED.

6. FAFSA Completion Initiative • March 14, 2014– OMB Approval of “Student Aid Internet Gateway Application for State Grant Agencies” form (SAIG form). • Includes provisions that allow a state grant agency to disclose limited FAFSA completion information to local educational agencies (LEAs), secondary schools, and to certain designated entities. • All agencies must execute the new SAIG Agreement. • An agency that wishes to participate in the FAFSA Completion Initiative must review and complete Part Two.

7. FAFSA Completion Initiative • In GEN-14-12 (July 10, 2014) we announced two sets of designated entities, in addition to high schools and LEAs, that may receive FAFSA Filing Status Information from State Grant Agencies under the new FAFSA Completion Initiative. • Entities that are grantees of the Department under the Talent Search, Upward Bound, and Student Support Services programs (the TRIO Programs) and the Gaining Early Awareness and Readiness for Undergraduate Programs (GEAR-UP).

8. FAFSA Completion Initiative • In GEN-14-12 (July 10, 2014) we announced two sets of designated entities that may receive FAFSA Filing Status Information from State Grant Agencies under the new FAFSA Completion Initiative • American Indian and Alaskan Native Educational Entities that are “Tribal Education Agencies” or “Indian Organizations”

9. FAFSA Completion Initiative • Upcoming Dear Colleague Letter on Non-Profit Organizations • State grant agencies can identify non-profit organizations that may receive FAFSA Filing Status Information as designated entities under the FAFSA Completion Initiative, if the non-profit organization meets certain conditions. • The non-profit organization must have executed a written agreement with the state grant agency, consistent with the relevant provisions of the state grant agency’s SAIG Participation Agreement with the Department.

10. FAFSA Completion Initiative • Upcoming New Dear Colleague Letter • The non-profit organization must have an established relationship with each student for whom it requests FAFSA Filing Status Information from the state grant agency. An established relationship exists between a student and a designated entity when the student is enrolled in, has registered with, or is receiving services from the designated entity in the pursuit of postsecondary education.

11. FAFSA Completion Initiative • Upcoming New Dear Colleague Letter • The state grant agency must determine that the non-profit organization meets ALL of the requirements listed on the next slides. • The written agreement must include a statement from the non-profit organization that each of the requirements have been met and that the non-profit organization will immediately notify the state grant agency if it cannot continue to meet any requirement.

12. FAFSA Completion Initiative • Non-Profit Organizations • Conditions –The organization: • Has been for at least three years, and continues to be, a not-for-profit organization that has been designated as tax-exempt by the Internal Revenue Service (IRS) under Section 501(c)(3) of the Internal Revenue Code (IRC).

13. FAFSA Completion Initiative • Non-Profit Organizations • Conditions – The organization: • Must have, as part of its mission, a stated commitment to promote college access. • Must provide its services primarily to economically disadvantaged clients. • May not charge students, families, other clients, or schools for any of its services.

14. FAFSA Completion Initiative • Non-Profit Organizations • Conditions – The organization: • Or any of its affiliates or its parent organization), has not been administratively or judicially determined to have committed fraud or any other material violation of law involving Federal, State, or local government funds.

15. FAFSA Completion Initiative • Non-Profit Organizations • Conditions – The organization: • May not use a third party to perform any of the functions related to the receipt of FAFSA Filing Status Information. • Must provide confirmation that it has the capacity to fully meet all relevant data security and privacy requirements as provided in the agreement that must be executed between the state grant agency and the organization.

16. 2015-2016 FAFSA Changes

17. FAFSA Definition of Parent • Current definition is: biological or adoptive • New definition will be: biological, adoptive or person that the state has determined to be the parent. For example, a person listed on the birth certificate. • Clarifying who is not a parent • List of people who are not considered a parent unless they have legally adopted the student will now include widowed stepparent

18. Foster Care Benefits • Require all FOTW applicants to tell us if they are or were in foster care to ensure people entitled to benefits receive them • Separate from current dependency question • New question will be earlier in application process • “Yes” answer will result in SAR comment with hyperlink to information regarding benefits, and hyperlink will also appear on FOTW confirmation page

19. List of Colleges Receiving FAFSA Data • School selection page • Adding text to tell students that all schools they select will receive the list of selected schools • School selection summary page • Adding text to tell students that for federal purposes it does not matter in what order schools are listed but it may be important for state purposes • Direct students to check with state • May need to list state school first in order to receive state benefits

20. IRS Data Retrieval Tool – Amended Returns • In the filtering question, unusually large number of applicants report filing an amended return • Rewording question to specifically ask if they have filed a 1040-X amended return • Help text will also refer to the 1040-X and make clear what the 1040-X is

21. Help Text Changes • Gender question • Clarifying help text to state we are asking about sex at birth • Citizenship status • Adding help text regarding DACA to help students in this category identify themselves • Should answer that they are neither citizens or eligible noncitizens • Although they can receive Social Security numbers, they are not eligible for Title IV

22. Help Text Changes • Dislocated worker definition • Adding two items to definition related to active duty military • Spouse of active duty military who has lost job due to permanent change of duty station • Spouse who is a displaced homemaker • Selective service • Spelling out Selective Service System

23. Pacific Islander Guidance • Students from Freely Associated States use pseudo Social Security Number for FAFSA • Should use same pseudo-SSN for each year • New hyperlink on login page asks if applicant is from a Freely Associated State • “Yes” answer leads directly to applicable help text so it is easier for applicants to find

24. 2015-16 Resources • 2015-16 ISIR Guide • Electronic Announcement October 7, 2014 • EDE Technical Reference • Electronic Announcement October 8, 2014 • CPS Test System User Guide • Available on FSADownload.ed.gov in Technical References and Guides section • Mainframe test system also available

25. FAFSA Reprocessing

27. Reprocessed 2014-2015 ISIRs Issue: • Inflated Income Earned from Work values due to entry of cents in this field on the FAFSA • Solution: • Changed the entry format to right-justified • Dropped decimal point and additional digits when input by the applicant • Fixes implemented July 1, 2014

28. FAFSA Reprocessing • Reprocessing #1 – Focused on Income Earned from Work - Approximately 165,000 records • Reprocessing #2 –Focused on Adjusted Gross Income - Approximately 118,000 records

29. PIN Replacement

30. Introducing the FSA ID The FSA ID will modernize access for students, parents and borrowers to FSA systems • Industry best practice of using a username and password instead of personal information • Will replace PIN for students, parents and borrowers accessing FSA systems starting in April 2015 • Requires users to enter less information • Provides more secure access to information • Offers self–service capability (name change)

31. Regulatory Activity

32. Campus Security and Crime Reporting • The “Violence Against Women Act” amended the “Clery Act” • Negotiations finished in April 2014 – Consensus reached • NPRM Published on June 20 • Final Published on October 20, 2014

33. Program Integrity and Improvement • Negotiations began February 2014 • Concluded on May 20, 2014 without reaching consensus – agreement on PLUS • Cash management (debit cards, etc.) • State authorization for distance education and foreign locations of domestic schools • Clock- to credit-hour conversion • Repeat Coursework • Adverse credit for PLUS loan borrowers

34. Direct PLUS Loan • NPRM published on August 8, 2014 • Comments due by September 8, 2014 • Final Rule published October 23, 2014 • Purpose: • Update the standards for determining if a potential parent or student borrower has an adverse credit history for purposes of eligibility for a Direct PLUS Loan (PLUS loan)

35. Direct PLUS Loan • Adverse credit history includes, among other things: • One or more debt with total combined outstanding balance greater than $2,085, that are – • 90 or more days delinquent; • Have been placed in with a collection agency; • Have been “charged off” or “written off” during preceding 2 years. • Extension of credit check validity time frame to 180 days. • Likely early implementation

36. Direct PLUS Loan • PLUS applicant with an adverse credit who obtains an endorser or who satisfactorily documents that extenuating circumstances exist, must complete PLUS loan counseling.

37. Pay As You Earn • Expanding eligibility for Pay As You Earn Repayment. • No more than 10 percent of discretionary income. • Discharge after 20 years. • Negotiated Rulemaking – • Two public hearings – • October 23 in Washington • November 4 in Anaheim • Negotiated Rulemaking to begin in February • Final rule by November 1, 2015

38. Gainful Employment • Gainful Employment • Three sessions of negotiations held without reaching consensus • NPRM published on March 25, 2014 • Final will be published by November 1, 2014 • Effective – July 1, 2015

39. The HEA provides that to be Title IV eligible an educational program must be offered by: • A public or non-profit postsecondary educational institution and leads to a degree; or • Generally, all non-degree programs must lead to gainful employment • Any institution and “to prepare students for gainful employment in a recognized occupation”. • Generally, all programs at for-profits must lead to gainful employment

40. FSA Training ConferenceAtlanta, GeorgiaDecember 2 -5 See IFAP Announcement of May 30