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FEDERAL UPDATE MSFAA

FEDERAL UPDATE MSFAA . Lansing, MI February 1, 2012. Consolidated Appropriations Act 2012. DCL GEN-12-01 Reduces income threshold for Automatic Zero EFC from $32,000 to $23,000 Changes formula for minimum Pell Grant Award Set at 10% of total maximum award

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FEDERAL UPDATE MSFAA

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  1. FEDERAL UPDATEMSFAA Lansing, MI February 1, 2012

  2. Consolidated Appropriations Act 2012 • DCL GEN-12-01 • Reduces income threshold for Automatic Zero EFC from $32,000 to $23,000 • Changes formula for minimum Pell Grant Award • Set at 10% of total maximum award • Eliminates Pell eligibility for student who was eligible for between 5% and 10% of total maximum award • Pell Grant life time eligibility reduced to equivalent of 12 full-time semesters

  3. Consolidated Appropriations Act 2012 • DCL GEN-12-01 • Eliminates Title IV aid eligibility for students without high school diploma or equivalent • Temporarily eliminates interest subsidy on Direct Subsidized Loans during 6 month grace period • Effective of new Subsidized first disbursed on/after July 1, 2012 and before July 1, 2014

  4. “Regular” Direct Consolidation • Borrowers with any federal student loan • FFEL, Direct Loan, Perkins, HHS • Direct Consolidation Loan • Underlying loans paid off • New Repayment Period • Interest Rate – Fixed • Weighted average rounded up to the next 1.8 percent

  5. Special Direct Consolidation • January 17 through June 30, 2012. • Only for “Split Borrowers” • Loans held by ED and FFEL lender • ED Held Loans –Direct Loans and ‘PUT’ FFEL Loans • Only the commercial FFEL to be consolidated • Underlying loans paid off • Underlying loans maintain identity • Same terms, conditions, dates

  6. Special Direct Consolidation • Benefits – • Single holder/servicer/bill/payment • Loans maintain terms and conditions • Reduction in interest rate of 0.25% • Additional 0.25% reduction for EFT • Loans eligible for Public Service Loan Forgiveness

  7. 2012-13 Pell Payment Schedules • DCL P-12-01 • Maximum Pell award remains at $5,550 • Maximum EFC that is Pell eligible is 4,995 • You must use these for all 2012-13 Pell awards!!

  8. 2012-13 Campus-Based Aid • Tentative funding awards will be posted to FISAP web site by February 1, 2012 • School FAA will receive e-mail • https://cbfisap.ed.gov/ecb/CBSWebApp/ • IFAP E.A. January 19, 2012 explains calculation • Total available for year- • FSEOG - $734,598,979 • FWS - $976,681,576 • Request waiver for underuse of 2010-11 funds by February 10, 2012 • IFAP E.A. January 23, 2012

  9. Negotiated Rulemaking 2012 • Sessions held in January, February, & March • TEACH Grant • Topics listed in Federal Register October 26, 2011 • Loan Programs • Topics listed in Federal Register October 28, 2011

  10. Budget Control Act • On August 2, 2011, the President signed the Budget Control Act (BCA) of 2011 (Pub. L. 12-025). • Act makes two changes to the Direct Loan Program: • Loss of Eligibility for Subsidized Loans for Graduate and Professional Students. • Termination of Direct Loan Borrower Repayment Incentives

  11. Budget Control Act Loss of Eligibility for Subsidized Loans • Graduate/professional students only • Effective for loans made for loan periods beginning on/ after July 1, 2012 • Subsidized Loans for loan periods beginning before July 1, 2012 remain unchanged

  12. Budget Control Act • Annual and aggregate loan limits for graduate and professional students remain unchanged • $20,500 annual limit • $138,500 aggregate limit • The higher annual and aggregate amounts for students enrolled in certain health professions programs also have not changed • $47,167 annual limit • $224,000 aggregate limit

  13. Budget Control Act Termination of Direct Loan Incentives • Terminates repayment incentives to encourage on-time repayment of loans • Effective for loans first disbursed on/after July 1, 2012. • Loan fees will be at 1% for Stafford and 4% for PLUS • Allows interest rate reduction to borrowers who agree to have payments automatically electronically debited from a bank account

  14. Direct Loan Interest Rates • Change to subsidized loans for undergraduate students • Effective for loans first disbursed on/after 7/01/12, rate will be fixed at 6.8% • As a result of CCRAA, September 2008 • Now all subsidized and unsubsidized loans will be at same interest rate

  15. Direct Loan School Participation • DCL GEN-11-07 • Schools cannot limit borrowing by students or parents across the board or by category • Cannot limit to direct costs • Cannot allow only in certain terms • Cannot set loan limits for school less than statutory • Cannot deny access to groups of students

  16. Direct Loan School Participation • Subsidized and Unsubsidized Loans are ONE loan program • If school participates in one, must participate in both • If participate in Grad PLUS, must participate in sub/unsub

  17. Direct Loan School Participation • PLUS Loans • Participation is school’s option • If choose to participate and have both undergraduate and graduate programs, must offer both Parent and Graduate PLUS Loans • If choose not to participate, dependent undergraduates cannot borrow additional unsubsidized at independent loan limits

  18. Direct Loan Servicing • Servicers • Direct Loan • ACS • MOHELA • ESA/Edfinancial • PUT and Direct Loan • AES/PHEAA • Great Lakes Education Loan Services • NELNET • Sallie Mae

  19. FY-09 FY-10 125 230 5,000 FY-09 FY-10 FY-11 125 230 250 5,000 2-Year Versus 3-Year Calculation The Numerator is the number of borrowers from the denominator who default within a cohort period The Denominator is the number of borrowers who enter repayment within a cohort period 3555000 .071 or 7.1% 6055000 .121 or 12.1%

  20. Program Integrity Regulations – Q&A web site http://www2.ed.gov/policy/highered/reg/hearulemaking/2009/integrity-qa.html Includes- • State authorization • Repeating coursework • Credit hour definition • Ability-to-benefit • Incentive compensation • Misrepresentation • R2T4 • Satisfactory academic progress • Gainful employment

  21. Gainful Employment

  22. Experimental Sites Current experiments will be terminated at the end of the 2011-12 award year Letters sent to 75 schools currently participating in old experiments Means that beginning with 2012-13, school must administer Title IV aid under regular statutory and regulatory requirements. 18

  23. Items Of Interest • FAFSA Renewals for 2012-13 • Reminders will be sent 01/13/11 thru 02/10/12 • Student must have name, date of birth, and SSN match with SSA – match flag is 4 • Drug Worksheet Available for 2012-13 • See IFAP E.A. January 11, 2012 • EDExpress 2012-13, Release 1.0 now available • See IFAP E.A. January 3, 2012 • Need Beta testers for EDExpress 2012-12, Release 2.0 • See IFAP E.A. January 13, 2012

  24. Late/Missing Audits School may be cited for failing to meet financial responsibility regulatory requirements • Effective for late audits submitted after 12/31/11 and missing audits due on/after 12/31/11 • Continued Title IV participation would require- • Participation under provisional certification; • School to post an irrevocable letter of credit for a minimum of 10% of the Title IV, HEA program funds, received by the institution during its most recently completed fiscal year for past performance violations that will remain on file 5 years from the most recent past performance violation; and

  25. Late/Missing Audits • Participation under heightened cash monitoring payment method which requires school to disburse funds and submit supporting documentation before draw down of Title IV funds • IFAP E.A. January 17, 2012

  26. New ED Technology Security Initiatives • All users of ED systems will be required to use additional security measures beginning in 2012 • Two Factor Authentication • Uses individual User ID and Password • Adds use of TFA token • Active confirmation for COD users • Upgrade of Edconnect and SAIG

  27. Exit Counseling Student Access • Functionality for Exit Counseling that covers FFEL and Direct Loan Programs • Session integrates NSLDS data to provide borrower specific loan summary and estimated payments • Educates borrowers about their loan obligation, grace period, repayment and deferment options • Meets Exit Counseling requirement for schools • Session information is saved to provide reports schools • Student Access at www.nslds.ed.gov

  28. Exit Counseling • FAO may view Exit Counseling History of individual borrowers. • Schools can • upload Exit Counseling sessions completed outside NSLDS. • request Exit Counseling Completion session information on demand or set up scheduled reports. • www.nsldsfap.ed.gov • www.nslds.ed.gov/nslds_FAP/secure/logon.jsp

  29. Exit Counseling Report EXTC01 Provides schools with a report of students who have completed exit counseling during a requested timeframe. • Output results contain the borrower's demographic data: address, employer, references, and next of kin • Schools can follow up after students leave the school 30

  30. School Portfolio Report SCHPR1 Report on the school’s current loan portfolio. • Provides schools with loan status data about all Direct Loan and/or Federal Family Education Loan (FFEL) loans for the school code associated with the user’s ID • If school has merged, previous school codes are included • Shows current and original loan holder Cohort Default Reports 31

  31. School Portfolio Report School can track student’s loan activity • Current Status • Date entered repayment • Current balances • Delinquency Date • Original and current holder • Claim information on GA held loans • CDR Date of Default

  32. https://www.myedaccount.com

  33. Debt Collection Contact • ED’s Debt Collection Service services grant overpayments and defaulted FFEL, Direct, and Perkins Loans • https://www.myeddebt.com/ • Website has links for borrowers, schools, employers, and private collection agencies

  34. 35

  35. Publications & Sites For Students • www.college.gov • www.studentaid.ed.gov • College Preparation Checklist www.studentaid.ed.gov/collprep • Do You Need Money for College? • Federal Student Aid at a Glance www.studentaid.ed.gov/pubs • Revised military fact sheet

  36. ED’s Recorded Training • DCL ANN-12-02 • R2T4 • DCL ANN-11-28 • Direct Loan Reports • Direct Loan Primer • DCL ANN-10-41 • Direct Loan Reconciliation

  37. FAFSA ON THE WEB

  38. FAFSA Processing • Increase in applications completed by independent students is nearly double the increase of applications completed by dependent students. • Applications by independent students in 2011-2012 have increased nearly 70% when compared to 2010-2011 rates • Applications by dependent students are up 37% this year over last. • Nationally, applications have increased by 12% for families whose income level is greater than $41K, compared to an increase of 7% for families whose income level is less than $41K. 2

  39. FOTW Completion Time 38% 3

  40. 2012-13 Web Demonstration Site • FAFSA on the Web and FAAAccess demonstration sites available • To access sites, go to http://fafsademo.test.ed.gov • Enter: • User Name: eddemo • Password: fafsatest • Click on FOTW or FAA Access to CPS Online Demo System button • Available through December 2012

  41. Search Capabilities Federal School Code and High School Search • Search criteria more user-friendly and logical • Aliases and abbreviations will be recognized: • U.S. Postal Service standards • Top ranked schools on FAFSA on the Web • Common abbreviations found in the current databases • Common alias provided by surveyed FAAs and/or FSA • Commonly misspelled words • Field length increased to 40 characters

  42. An Alerts and Message text provides the status of the search • Search results display name, city, state, and school code for each matching school • Scrollable results display as many as 100 schools per page 5

  43. Students select schools from those that display and then select the “ADD” button between the two tables. • The student can also select the Remove hyperlink to remove any school from the listing.

  44. 2012-2013 Housing Plan Error Messaging 7

  45. 2012-2013 High School Question • High school question (Question 27) will display using the following logic: • High school completion status = 1 (high school diploma) and Grade level = 0 or 1 • Any student who was presented the high school question in 2011-2012 will be presented the question again in 2012-2013 as a renewal student. • The student will have the opportunity to search the database with the “best match” search functionality to verify the response that was provided in 2011-2012. 8

  46. Results for this high school search include any school name in the database which contains “Bishop”, may be located in Baltimore or in the state of Maryland. • This is an example of relevance as those names containing Bishop appear before those containing city or state. • Students may narrow their search by changing the search criteria.

  47. FAFSA Gender Question Edit 2012-13 • While the gender question is not required, it is used to determine which applicants need to be matched with the Selective Service • To provide an extra reminder to applicants, a warning edit will display in FOTWif the question is not answered 10

  48. FAFSA Gender Question • Pop up box will display if the student does not answer the “Are you male or female?” question, the first time the student attempts to navigate to another page. You left “Are you male or female?” blank. This information is important, as most male students must be registered with the Selective Service in order to qualify for federal student aid.   

  49. 2012-2013 Asset Threshold Question 2011-2012 Comment codes are used to notify schools when the asset threshold question was displayed to the applicant and the response is “No” • Comment codes deleted • Response to asset threshold question provided on ISIR record layout, Student Inquiry, and ISIR Compare

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