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U.S. Department of Education

U.S. Department of Education. Federal Update. UASFAA Spring Conference April 18, 2013. Title IV Program Budget. Title IV Aid Available. * President’s FY 2013 Budget Request. President’s Budget Request Fiscal Year 2014. $5,785 maximum Pell Grant

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U.S. Department of Education

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  1. U.S. Department of Education Federal Update UASFAA Spring Conference April 18, 2013

  2. Title IV Program Budget

  3. Title IV Aid Available * President’s FY 2013 Budget Request

  4. President’s Budget Request Fiscal Year 2014 • $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

  5. Sequestration Electronic Announcement March 1, 2013 March 15, 2013

  6. Sequestration – TIV Programs • Federal Pell Grant Program • No impact to either 2012-2013 or 2013-2014 • FWS and FSEOG Programs • No impact on 2012-2013 campus allocations • 2013-2014 allocations will be reduced • Will show in final allocations

  7. 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

  8. 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

  9. 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

  10. Federal Pell Grant Program

  11. 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

  12. 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

  13. 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

  14. 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%)

  15. 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 • There is no minimum payment

  16. 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%)

  17. 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 aFederal Register notice for 2013-2014 will require all reporting to be made within 15 days

  18. 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 • need-based Title IV aid to compensate.

  19. 2013-2014 NSLDS Unusual Enrollment History Flag “separate from verification”

  20. 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

  21. NSLDS Identifies Records • Flag values • (N, Blank and 1- 3) NSLDS adds edits to identify records with unusual enrollment histories and sets an NSLDS Unusual Enrollment History Flag during Pre-screening process

  22. Unusual Enrollment History Values for the NSLDS Unusual Enrollment History Flag

  23. 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 3award 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 unlessyou 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.

  24. 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.)

  25. 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 unlessinstitution 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

  26. 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 • To extent possible, obtain third party documentation to support student’s reasons

  27. UEH Flag = 3 Denying Eligibility • 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

  28. UEH Continued Eligibility • Approving Continued Eligibility • 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

  29. 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

  30. Direct Loans Public Law 112-141 Applies to “new” borrowers on or after July 1, 2013

  31. 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

  32. Subsidized Loan Limitation Examples

  33. 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

  34. 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

  35. 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

  36. College Choice ToolsKnow Before You GoKnow Before You Owe

  37. 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

  38. Executive Order 13607 Establishing Principles of Excellence for Educational Institutions Serving Service Members, Veterans, Spouses and other Family Members GEN-12-10 EA – 6/29/12

  39. Financial Aid Shopping Sheet Student Specific Information: Institutional Metrics: Graduation rate under “Student Right-to-Know” Most recent cohort default rate Median debt for completers Loan repayment information Cost of Attendance Elements Grants and Scholarships Net price After Grants Work Options Loan Options Other Options Including Family Contribution Contact information

  40. Gainful Employment Programs

  41. 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 • Stay tuned to • IFAP for Updates!!!!

  42. 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

  43. Cohort Default Rates

  44. 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

  45. 45

  46. FY 2009 3-year • rate is 13.4%

  47. Transition Period

  48. 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 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 48

  49. 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

  50. 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) 377-4259; fsa.schools.default.management@ed.gov 50

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