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Washington Update Ohio Bursars Association Spring Conference Cincinnati April 5, 2019

Washington Update Ohio Bursars Association Spring Conference Cincinnati April 5, 2019. Bryan Dickson Assistant Director, Advocacy & Student Financial Services NACUBO. For 116th Congress: Democrats control the House with almost a 40-seat margin.

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Washington Update Ohio Bursars Association Spring Conference Cincinnati April 5, 2019

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  1. Washington Update Ohio Bursars Association Spring ConferenceCincinnatiApril 5, 2019 Bryan Dickson Assistant Director, Advocacy & Student Financial Services NACUBO

  2. For 116th Congress: Democrats control the House with almost a 40-seat margin Partisan makeup of the House compared to the previous Congress 2018 U.S. House election results map Seats flipped R to D (Total: 42) Seats flipped D to R (Total: 3) Not yet called (color outline is incumbent’s party) ■Republican won ■Democrat won ■Election not yet called

  3. For 116th Congress: Republicans have expanded their Senate majority by three seats Composition of the 116th Senate map Seats flipped R to D (Total: 2) Seats flipped D to R (Total: 4) ■2 Democrats (19) ■2 Republicans (22) ■1 Democrat + 1 Republican (9) ** * * *** *Sens. King (I-ME) and Sanders (I-VT) caucus with the Democrats **In MN, both Democratic candidates won ***In MS, Wicker (R) won reelection and Hyde-Smith (R) won reelection in a runoff *Independents Sanders and King, who caucus with the Democrats, have been included in the Democratic tally

  4. 2019 On Capitol Hill • Debt Limit • Sequestration • FY20, FY21 • HEA Reauthorization • Cybersecurity, data privacy Executive and Judicial Branch • Title IX (campus sexual assault) • Accreditation and program integrity • Affirmative Action • Immigration, DACA Other Pressure Points • Admissions scandal • College costs and student debt • Campus free speech • Revenue • State budgets • Tuition pressure • Charitable giving

  5. Congressional Budget Process February* March – April* May – September 30* Senate passes budget resolution Senate passes appropriations bills S President releases budget request Appropriations subcommittees draft bills X X X X X X X X X X X X Conference committees resolve differences X X X X X X X X X X X X Senate Bills X X X X X X X X X X X X Combined H x12 Subcommittees House Bills Congress passes combined budget Resolution Any unfinished appropriations bills combined into omnibus bill House passes budget resolution House passes appropriations bills *Denotes the pace of the process under “regular order” Sources: Congress.gov

  6. Department of Education Discretionary budget authority ■President’s Request ■Enacted BILLIONS OF US DOLLARS *FY2017 request is based on President Obama’s FY2017 request **FY2018 enacted is based on the current Continuing Resolution Sources: President Trump's FY2020 and 2019 Budget Requests March 19, 2019 | Alice Johnson

  7. President’s FY20 Requests • Maximum Pell Grant award of $6,195 • Eliminate the Supplemental Educational Opportunity Grant (SEOG) program • Significantly cut Federal Work Study from $1.1 billion to $500 million. • Proposes a consolidation of five income-driven loan repayment plans into one plan which would set monthly payments at 12.5 percent of discretionary income and eliminate the standard repayment cap. • Undergraduate borrowers would be eligible for forgiveness after 15 years while graduate students would be eligible after 30 years of repayment.

  8. Higher Ed Community Requests • The Pell Grant maximum should be increased to at least $6,345, and the appropriate level should be $6,655. • Had the Pell Grant maximum award simply kept pace with inflation from FY1975 (the first year the program served the majority of undergraduates) the award level would be $6,655 in FY20. • Campus-Based Aid • SEOG, $1.028 billion • Federal Work-Study, $1.434 billion.

  9. Higher Education Act Reauthorization • Last reauthorized in 2008 • Authorizes Title IV Federal Student Aid programs • PROSPER Act introduced • Whitepapers • Aim Higher Act introduced • 2018 Elections • More Hearings • Risk sharing remains popular

  10. Reauthorization on The Hill House Republicans’ Plan (PROSPER ACT) • Promote Innovation, Access, and Completion • Simplify and Improve Student Aid • Empower Students to Make Informed Decisions • Ensure Accountability; Limited Federal Role House Democrats’ Response (Aim Higher Act) • Improve Access • Make College More Affordable • Increase Completion

  11. The White House’s Take on HEA • Accreditation • Increase innovation • Align education to the needs of today’s workforce • Increase institutional accountability • Accelerate program completion • Support HBCUs • Encourage responsible borrowing; simplify aid • Support returning citizens

  12. Aid Like a Paycheck Core Concern Paying students all of their aid in the beginning of a term makes it difficult for them to budget and control spending. • Credit balance refunds would be paid to students in equal monthly or weekly installments • May be unequal to adjust for varying costs, such as upfront charges for tuition and fees • First installment may be paid as early as 30 days before first day of classes • Must be paid no later than 30 days after the start of classes • Details unclear

  13. Return of Title IV Funds • Aid earned by quarter of term • School returns unearned aid based on total disbursed, regardless of credit balance refunds • School may only recover 10% of amount returned from student • If student completes at least one modular course in term, not treated as withdrawal

  14. At the Department of Education • Negotiated rulemaking • Title IX • Borrower defense • SFA Audits: new requirement? • Perkins • Cash management • Payment vehicle

  15. Perkins Loan Program • Expired (still) • Great example of “risk sharing” • COHEAO’s efforts • NACUBO Perkins Wind-down Guidance

  16. Reminder: Cash Management Rules Some rules apply to all schools. Others to schools with certain arrangements with other entities If you have a T1 or T2 arrangement… • Develop due diligence process to ensure appropriate fees • Disclose entire contract on your website and to ED • List features/fees in selection menu • Disclose monetary/non-monetary consideration received • Disclose contract date (# of students, mean/median fees) on ED’s website • Among other things... Tier 1: With a 3rd party servicer processing Title IV aid and offers financial account (or markets account from another entity) Tier 2: With a bank where accounts are offered and marketed directly to students See NACUBO summary: https://www.nacubo.org/Topics/Student-Financial-Services/Debit-Cards-and-Campus-Banking-Products

  17. FSA Payment Vehicle • Part of FSA’s myStudentAid mobile app. Students can: • Browse potential schools • Complete FAFSA • Explore aid options • Manage/pay loans • Customer service • Online account with great terms; no fees

  18. IRS Form 1098-T Let’s talk for a minute….

  19. Federal Education Tax Credits American Opportunity Tax Credit (AOTC) • Up to $2,500 • 100 percent of the first $2,000 you spend on qualifying education expenses plus 25 percent of the next $2,000 you spend for a total possible credit of $2,500. • Up to $1,000 can be refunded Lifetime Learning Tax Credit • Worth up to $2,000 per tax return. • 20 percent of the first $10,000 of qualified education expenses

  20. TIN Certification • Checkbox certifies that school has followed rules for soliciting TINs • Check the box for a student if • TIN is reported, and school believes it to be correct • No TIN is reported, but school has asked student in appropriate manner at least once during year • Leave checkbox blank only if • school does not have TIN and • has not followed IRS rules about soliciting TINs

  21. Reporting Exceptions

  22. Qualified Tuition and Related Expenses (QTRE) Definition has not changed • Tuition and fees required for enrollment • Books and supplies charges, if required to be paid to institution But not • Personal expenses (room, board, insurance, medical, travel, etc.) • Expenses for courses involving sports, games, or hobbies (unless part of degree program) See NACUBO Advisory Report 18-06

  23. Scholarships and Grants Definition has not changed • IRS proposed broadening “administered and processed by the institution” • 2017 instructions have added “which you know or reasonably should know is a scholarship or grant” • All grant aid that goes toward cost of attendance should be reported • Grant aid that can pay QTRE is reported in both Box 1 and Box 5 • Aid that is restricted to nonqualified expenses is reported only in Box 5

  24. Reporting Payments (Current Rules)

  25. Two 1098-T Go-to Resources Q&A from 2017 Webcast Advisory 18-06 Available at: https://www.nacubo.org/Topics/Tax/IRS-1098-T

  26. NACUBO Resources • Bursar List • Student Financial Services Council • International Overpayments • Financial Responsibility Agreements • Policy Manual Suggestions • Perkins Wind-down Guidance • SFS Research • Student Financial Services Benchmarking Study • SFS Policies and Procedures Study • NACUBO.org (“Topics” or “Advocacy” tabs)

  27. Thank you. Bryan Dickson bdickson@nacubo.org

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