NEW FEDERAL GRANT PROGRAMS

1. NEW FEDERAL GRANT PROGRAMS

2. Implementation Issues Academic Competitiveness Grants and SMART Grants

3. Panelists • Beth Asmus Director, Financial Aid, College of the Canyons • Mindy Bergeron Director, Financial Aid, John F. Kennedy University • Jacqueline Bradley Asst. Dean, Financial Aid & EOPS, Mendocino College • Ken Walsh Director, Financial Aid, California Maritime Academy

4. The Bleeding Edge • This presentation has been developed on information from: • AACRAO ConferenceMarch 6, 2006 • NASFAA Leadership ConferenceMarch 7, 2006

5. Legislative Background • Two federal grant programs created as part of the Higher Education Reconciliation Act of 2005 • Drafted behind closed doors without public hearings or consultation with the Department of Education or NASFAA • Signed into law February 8, 2006

6. Operational Schedule • Department of Education must implement for 2006-07 • Higher Education Reconciliation Act amends Title IV of the Higher Education Act • Compressed timeline does not allow for negotiated rulemaking prior to initial implementation • Negotiated rulemaking may be part of review process once the implemented, with changes effective for the 2008-2009 academic year

7. Proposed Calendar MARCH 2006 • Solicitation from States definition of “rigorous secondary school programs” • Preliminary heads-up discussions with major ERPs

8. Proposed Calendar MAY 2006 • “Dear Colleague Letter” and Final Regulations published by end of May

9. Proposed Calendar JULY 2006 • Eligible majors announced • Web site for self-certification to be operational • Number of eligible recipients estimated, and award amounts published

10. Good News! $4.5 Billion in mandatory spending appropriated for 5 years FY 2006 $790 Million FY 2007 $850 Million FY 2008 $920 Million FY 2009 $960 Million FY 2010 $1.01 Billion

11. Fixed Grant Amounts ACG First Year Student $ 750 Second Year Student $1,300 SMART Grants Third Year Student $4,000 Fourth Year Student $4,000

12. Possible Award Modifications • If funding insufficient to provide grants to all eligible students: • Award levels will be ratably reduced • Legislation authorizes additional appropriations to restore awards

13. Possible Award Modifications • Award levels are fixed: • Student must attend full-time • No variation in amount based on income • May not exceed Cost of Attendance

14. Student Eligibility • Students must be: • U.S. Citizen (no permanent residents, asylees, or refugees) • Recent high school graduates • Full-time degree-seeking students at 2- or 4-year institutions • Pell-eligible with maximum EFC=3850

15. ACG ChallengesAdditional Student Criteria • Recent high school graduates must have completed a “rigorous secondary school program” established by a state or local education agency and recognized by the Secretary of Education • NOT YET DEFINED

16. ACG ChallengesAdditional Student Criteria • Not previously enrolled in an undergraduate program • Cumulative GPA of at least 3.0 by end of first academic year

17. SMART Grant ChallengesAdditional Student Criteria • Third or fourth year undergraduate program • Pursuing a qualified major at a 4-year degree-granting institution • Cumulative GPA of at least 3.0 in courses required for the major

18. SMART GrantQualified Academic Majors • Pursuing a major in: • Physical, life, or computer sciences, mathematics, technology, or engineering OR • A foreign language critical to the national security of the United States

19. ACG ChallengeRigorous Program Definition • “Has successfully completed, after January 1, 2006, a rigorous secondary school program of study established by a State or local educational agency and recognized as such by the Secretary” • Defined by each state and recognized by the Secretary • Catalogued and available for look-up on ED web site for FAFSA applicants and campus staff

20. ACG Implementation:“Student Centered Model” • FSA notifies student of potential eligibility • Student self-certifies eligibility and identifies program on FAFSA supplement • School obtains roster of self-certified students from CPS • School (FAO via the ADMISSIONS OFFICE) verifies student eligibility and initiates draw-down funds via COD

21. Verification Challenges • High Schools: • The law cannot compel to supply information • Department of Education has no mechanism for data exchange

22. Verification Challenges • Colleges and Universities: • While most admission offices (EXCEPT COMMUNITY COLLEGES) do collect transcripts, many transcripts will be preliminary and will not document “completion” of the program • Does completion of the program include passing CAHSEE? • Depending on the complexities of the definition of rigor, identification of rigorous programs may not be a trivial matter • Institutions would need to develop expertise in published definitions for all recognized programs in all 50 states

23. ACG Student Eligibility • “Not previously enrolled” issues • Students may have enrolled for college coursework while in high school • AACRAO hopes the definition will comply with GRS definition of a cohort and apply to first-time, full-time enrollment in a degree program after graduation from high school • Department of Education thinks this is how the ruling will be applied

24. ACG2nd Year Student Eligibility • Eligibility for the 2nd academic year requires a cumulative GPA of at least 3.0 at the end of the first academic year • Registrar’s office would certify GPA eligibility to FAO • FAO would initiate draw-down for eligible students via COD • No grades would be transmitted to ED

25. SMART Grants • Institution initiates student eligibility - contingent on college academic program major • Secretary of Education will publish eligible fields of study by CIP • Financial Aid Office checks potentially eligible students (based on citizenship, full-time status, Pell eligibility) • Registrar supplies data on major CIP and certify GPA eligibility • Specific CIP code would be communicated back to Department of Education

26. SMART Grant GPA • Cumulative GPA of at least 3.0 in the coursework required for the qualified major • WHAT ABOUT TRANSFER STUDENTS? • The meaning of “required” will be clarified in regulations: • Coursework that passes degree audit for graduation (including all the pre-requisites and electives) OR • Courses in the qualified field of study only

27. Academic Year • “Academic Year” defined the same as annual loan limits • Student eligibility one award per academic year • Only eligible for 1st Year ACG the year after high school graduation (2nd Year award is good two years after high school graduation) • Intent is that the 3rd year of full-time study would find the student at a four-year institution • If student attends one semester full-time and one semester part-time, they have used their award for the 1st year • If they only attend full-time in the Spring they can receive the full award

28. QUESTIONS? • Please understand that this reflects only the intent of the Department of Education at this time • ED will respond as quickly as possible to “get the most money to the most students possible”

29. Our attorneys have advised us to inform you that we have all signed a “Hold Harmless Clause” prior to providing you with this presentation. Hold Harmless Clause