Title IV Boot Camp

1. Title IV Boot Camp Tony Glad Global Education Management Services ANZFAA 2010

2. Agenda • Players and Terms • Institutional Requirements • Life of the Loan • Certification Basics • Disbursement Rules • Refund Requirements (R2T4) • Administrative Requirements • Resources

3. Players • Borrower/Student/Parent • U.S. Congress • U.S. Department of Education (a.k.a. ED) • Institution (“I know, I know, you’re not a “school”) • Credit Bureau • Servicer

4. Terms • Title IV • Federal Family Education Loan Program (FFELP)* • William D. Ford Direct Loan Program • Stafford Loans/Direct Loans • Subsidized/Unsubsidized • PLUS/Graduate PLUS • Consolidation Loans

5. Terms • Master Promissory Note (MPN) • Student Aid Report (SAR) • InstitutionalStudent Information Report (ISIR) • Common Origination and Disbursement System (COD) • G5 • StudentStatus Confirmation Report (SSCR)* • National StudentLoan Data System (NSLDS) • Cohort Default Rate (CDR)

6. Institution Responsibilities • Meet and maintain loan program participation requirements • Determine borrower eligibility – initial and on-going • Certify Loans • Receive and deliver loan funds • Counsel students (Entrance/Exit Interviews, SAP, Debt Management) • Report borrower enrolment information to NSLDS • Prevent and report fraud and abuse

7. Life of the Loan • Origination: Student application, determination of eligibility, school certification, disbursement of funds, delivery of funds • Interim Period: In-School, Grace, Deferment, Forbearance • Repayment: Blatant plug to come to the Exit Interview presentation

8. Certification BasicsIs the student eligible? • Is the student enrolled at least half-time? • Is the student academically qualified? • Is the student obtaining their degree from your institution (not just semester abroad)? • Is the student making Satisfactory Academic Progress (SAP)? • Is the student’s education program eligible? • Have you received the student SAR or ISIR?

9. Certification BasicsIs the student “dependent” or “independent”? Undergraduate students are dependent unless: • Married • Have dependent children (providing more than 50% of support) • Have other dependents • Orphans or wards of the court at any time since age 14 • Veterans of U.S. Armed Forces • Over 24 years old by December 31 of award year • Parents fail to qualify for a PLUS loan • Professional Judgment All graduate and professional students are independent.

10. Certification BasicsAnnual Loan Amounts for Stafford Dependent Undergraduate 1st Year Sub: $3,500 Sub & Unsub: $5,500 2nd Year Sub: $4,500 Sub & Unsub: $6,500 3rd year and beyond Sub: $5,500 Sub & Unsub: $7,500 Independent Undergraduate 1st Year Sub: $3,500 Sub & Unsub: $9,500 2nd Year Sub: $4,500 Sub & Unsub: $10,500 3rd year and beyond Sub: $5,500 Sub & Unsub: $12,500

11. Certification BasicsAnnual Loan Amounts for Stafford Graduate and Professional Students • Sub: $8,500 • Sub & Unsub: $20,500

12. Certification BasicsAggregateLoan Amounts for Stafford Dependent Undergraduates • Total Amount Cumulative $31,000 • (maximum $23,000 subsidized) Independent Undergraduates • Total Amount Cumulative $57,500 • (maximum $23,000 subsidized) Graduate and Professional Students • Total Amount Cumulative $138,500 • (maximum $65,500 subsidized; includes Stafford Loans received for undergraduate study)

13. Certification Basics(Standard)Academic year • Annual loan limits based on academic rather than calendar year. • Generally less than 12 months, exceptions possible. • Can be institution–wide or program by program. • “Summer” terms are part of SAY, and may be a header or trailer.

14. Certification BasicsCost of Attendance COA includes: • Tuition and Fees • Books and Supplies (including personal computer) • Living expenses (room, board, misc. personal upkeep) • Transportation costs

15. Certification BasicsExpected Family Contribution • Estimated by ED and supplied on SAR or ISIR • Based on student and (for dependents) parental assets • Can be adjusted by institution, but only by adjusting data items • 9 month EFC is standard – must be prorated for longer or shorter periods

16. Certification BasicsEstimated Financial Aid EFA is the amount of “other” aid student will receive in the loan period. Can include: • Other need based loans • Grants, scholarships and bursaries • Work awarded based on enrolment

17. Certification BasicsDetermining Loan Amounts • COA – EFC – EFA =“Need”. • “Need” = subsidized loan amount. • Remainder of annual loan limit can be awarded in unsubsidized loan.

18. Certification BasicsDetermining Loan AmountsGraduate Student Example - Stafford

19. Certification BasicsDetermining Loan Amounts PLUS = COA – EFA (including Stafford Loans) • No annual or aggregate limits • Amount cannot exceed Cost of Attendance or borrower requested amount • A parent can have multiple loans for multiple dependents in one year

20. Certification BasicsProfessional Judgment Institutions are allowed, on a case by case basis, to adjust: • The student’s Cost of Attendance • A data element used to calculate the EFC • A student’s dependency status

21. Certification BasicsProfessional Judgment If using professional judgment (PJ), an institution must follow these guidelines: • PJ is issued on a case by case basis. • Reason(s) for PJ must be documented in student’s file • Institution may perform a dependency override from dependent to independent, but not vice versa. • A dependent student’s parental unwillingness to assist the student is not by itself sufficient grounds for dependency override. ** • PJ may NOT be used to waive student eligibility requirements or circumvent the intent of U.S. law and regulations.

22. Certification BasicsNot done with that SAR/ISIR just yet… Institution must also use the SAR/ISIR to confirm the student’s or borrower’s: • Citizenship status • Valid Social Security number • Selective Service registration (male) • Student loan default status • Drug violation

23. Disbursement • The institution must set a disbursement schedule that ensures Title IV loans are disbursed in two or more installments, regardless of loan amount. • Disbursements should align with academic periods. (semester, trimester, quarter, etc.). • Single disbursement allowed for periods not more than one semester, trimester or quarter if the institution’s Cohort Default Rate is less than 10% for three most recent fiscal years. (15% in 2012)

24. Disbursement For Stafford/PLUS earliest date of first disbursement (draw down from G5) is 13 days prior to the first day of the first payment period.***

25. Disbursement Delayed Delivery: If an institution’s Cohort Default Rate is more than 10% (15% in 2012)for three most recent fiscal years, then for first-year undergraduate, first time-borrowers earliest date of first disbursement is the 28th day of the first payment period. ***

26. Disbursement • Disbursements may be combined if the first disbursement would occur on or after the date of the second or subsequent disbursements. • No disbursements more than 180 days after the end of the loan period. Loan must be certified before end of loan period. • Remember: Disbursement is the date funds are drawn down from G5 by the institution, not necessarily delivered to student. • Stafford and PLUS disbursements made directly to institution. Parent borrowers may request PLUS funds be mailed to them by institution.

27. Refund Requirements (R2T4) • If a student withdraws prior to completing the period of enrolment, the institution must calculate a return to Title IV (R2T4). • Must be done whether or not student has paid institution. • If student completed 60% of the loan period, they earned the full loan amount. • If student completed less than 60%, institution must return unearned portion of loan attributed to institutional charges. Again, even if student didn’t pay.

28. Refund Requirements (R2T4) Funds must be returned within 45 days of: • Date student withdraws. • Date student notified institution of withdrawal. • Date the institution (anyone at institution) became aware that student withdrew or dropped out.

29. Refund Requirements (R2T4) Percentage of loan earned is percentage of the loan period attended (calendar days). Example • Loan Period = 100 days • Borrower completed 50 days • School must return 50% of institutional charges paid with by loans.

30. Administrative Requirements Staffing • Institution must provide adequate staffing • Minimum of two • One to Certify (via COD) • One to Receive and Deliver Funds (via G5)

31. Administrative Requirements Student Status Confirmation Reports (SSCR): • Sent bi-annually by Guarantee Agencies • Confirms student enrolment status • Institution reviews, updates and returns within 30 days • Information can also be captured via NSLDS or National Student Loan Clearinghouse (http://www.studentclearinghouse.org)

32. Administrative Requirements Entrance/Exit Counseling • First time borrowers must receive Entrance Interview before institution releases funds. • All students must receive Exit Interviews, even those who withdraw early and/or have had it before. • May be done in-person, in seminars, or on-line at www.studnetloans.gov or www.mapping-your-future.org.

33. Administrative Requirements Record Retention • In general, required records must be retained for a minimum of three years. However, the starting point for the three-year period is not the same for all records. • FFELP borrower eligibility and participation records must be kept for three years from the end of the award year in which the student last attended. • All other FFEL records, including reports or forms, must be kept for three years from the end of the award year in which the report or form was submitted. • Note: All materials relate to ongoing audits must be kept regardless of time elapsed.

34. Administrative Requirements Record Retention • Any document that contains a signature, seal, etc. required to validate its authenticity must be maintained in its original hard copy or in an imaged format. • The electronic Institutional Student Information Record (ISIR) must be retained in the format in which it was received from ED by the school. However, the paper Student Aid Report (SAR) may be maintained in its original form or in an imaged media format. • Institution must allow access to ED, independent auditors, Comptroller General of the U.S. and Guarantee Agencies.

35. Administrative Requirements Written Policies and Disclosures Institution must make available to students: • Cost of attendance • Academic Programs • Withdrawal policies, including R2T4 • Definition of Satisfactory Academic Progress (SAP), the consequences of not meeting SAP, and appeal procedures • Accrediting/licensing agencies that approve the institution and its programs • Special facilities and services for disabled students • List continues to grow

36. Resources IFAP Foreign Schools Page http://ifap.ed.gov/ForeignSchoolInfo/ForeignSchoolInfo.html Direct Loans School Guide http://www2.ed.gov/offices/OSFAP/DirectLoan/pubs/schoolguide.html ED Foreign Schools Team: Fsa.foreign.school.team@ed.gov ED Student Page https://studentloans.gov/myDirectLoan/index.action Tara Felton: tara@financialaidaustralasia.com Tony Glad: tglad@myglobaled.com