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Federal Legislation

Federal Legislation. The Deficit Reduction Act of 2005. Deficit Reduction Act. Academic Competitiveness & SMART Grants Stafford Loan Interest Rates Stafford Loan Borrowing Limits Other Loan Issues Need Analysis Issues. Academic Competitiveness Grant. 1 st & 2 nd Year Undergraduate Study

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Federal Legislation

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  1. Federal Legislation The Deficit Reduction Act of 2005

  2. Deficit Reduction Act • Academic Competitiveness & SMART Grants • Stafford Loan Interest Rates • Stafford Loan Borrowing Limits • Other Loan Issues • Need Analysis Issues

  3. Academic Competitiveness Grant • 1st & 2nd Year Undergraduate Study • $750 for 1st Year • $1,300 for 2nd Year • Criteria: • Pell Grant Eligible • Enrolled Full Time • Attend a High School whose programs have been deemed rigorous • Maintain a 3.00 GPA (Annually) • Effective Date: 2006-2007

  4. Science & Math Access to Retain Talent Grant (SMART) • 3rd & 4th Year Undergraduates Study • Award up to $4,000 • Criteria: • Pell Grant Eligible • Enrolled Full-Time • Major in Science, Math, Engineering, & specific Languages • Must maintain a 3.00 GPA • Effective Date: 2006-2007

  5. Student Loan Interest Rates • Interest rates will change from a variable rate to a fixed rate on loans made from 7/1/2006. • Stafford & Direct loans will have a fixed rate of 6.8% • The variable rate this year is 5.3% • Parent Loans will have a fixed rate of 8.5% • The variable rate this year is 6.1%

  6. Student Loans Limits • Increase 1st Year loans from $2,625 to $3,500. • Increase 2nd Year loan limits from $3,500 t0 $4,500. • No increase of loan limit for 3rd & 4th year loans. • The aggregate loan limit of $23,000 does not increase.

  7. Other Loan Issues • Phase out the 3% Origination Fee. • Authorize military deferments up to three years during war time & national disasters. • Fix consolidation loan rates at 6.8%. • Eliminate in-school & spousal consolidations. • These changes are effective 2006-2007.

  8. Need Analysis Changes • Increase the Income Protection Allowance for dependent students from $2,200 to $3,000. • For independent students increase the allowance against income from $5,000 to $6,050. • Reduce the percentage of a dependent student’s assets from 35% to 20%. • Effective date: July 1, 2007.

  9. Other Need Analysis Changes • Simplified Needs Test • Expand eligibility for the Simplified Needs Test for students & parents who receives a means-tested federal benefit programs (i.e. Food Stamps & School Lunch programs). • Automatic Zero Expected Family Contribution (EFC) • Expand the Automatic Zero EFC by raising the income cap from $15,000 to $20,000. • Effective Date: July 1, 2006

  10. State Legislation The 2006-2007 New York State Budget

  11. 2006-2007 New York State BudgetTopics • Two New Aid Programs • Math & Science Teaching Incentive Scholarship • Part-Time TAP • Change in Circumstances • Ability to Benefit • Change to Satisfactory Academic Chart

  12. Math & Science TeachingIncentive Scholarship • Purpose • Increase the number of middle and secondary teachers in the fields of Math & Science • Conditions of the Scholarship • Available for both bachelor & master’s degree levels • Must enters into a contract with HESC to teach on a full-time basis for five years in math or science • Failure to comply with terms of contract will have the value of the award converted to a student loan

  13. Math & Science TeachingIncentive Scholarship (Cont.) • Number of Awards • A Maximum of 500 awards annually • Amounts • Equal to SUNY Tuition Rate ($4,350) • Awards made after one successful completion of the academic year (1st payment made in 2007-2008) • Annual awards for 4 years of full-time undergraduate study and 1 year of full-time graduate study

  14. Part-Time TAP • Requirements • Student must be a Freshman in 2006-07 • Full-Time for two consecutive semesters • Maintain a “C” average • Hence, program will not start until 2007-2008 • Questions • How is the award calculated? • What is the Award amount?

  15. Part-Time TAP (Cont.) • Part-Time TAP vs. Aid for Part Time Study (APTS) • Part-Time TAP does not replace APTS • APTS is fully funded at 14.6 million • APTS is a campus based program whereas Part-Time TAP is an entitlement program.

  16. Change in Family Circumstance • Adjustments to Family Income • Current conditions: death, permanent disability, or divorce of a parent/spouse • New “catastrophic illness” of the applicant • Question: Who can Make the Changes? • Is it left to the Financial Aid Officer or the Higher Education Services Corporation (HESC)

  17. Ability to Benefit (ATB) Changes • Students who do not have a high school diploma or GED must pass a federally approved ATB test in order to receive any state aid • The State Education Department will provide guidance about the independent testing and evaluation process.

  18. Accelerated Study • Students qualify for accelerated study only upon the completion of 24 credits, or its equivalent, in the prior two terms. • Implemented for terms beginning after Jan. 1, 2007

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