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HEA Reauthorization and Washington Update

HEA Reauthorization and Washington Update. Tom Babel Vice President, Regulatory Affairs DeVry Education Group. NASFAA HEA Reauthorization Task Force Recommendations. http://www.nasfaa.org/reauth / Task Force Convened January 2012 18 members, 5 subcommittees

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HEA Reauthorization and Washington Update

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  1. HEA Reauthorization and Washington Update Tom Babel Vice President, Regulatory Affairs DeVry Education Group

  2. NASFAA HEA Reauthorization Task Force Recommendations • http://www.nasfaa.org/reauth/ • Task Force • Convened January 2012 • 18 members, 5 subcommittees • 37 listening sessions around the country • Recommendations issued July 2013

  3. NASFAA HEA Reauthorization Need Analysis • Use Prior Prior Year (PPY) data for EFC • Auto Zero – Eliminate the dislocated worker criterion as an automatic qualifier for auto-zero • Strengthen school authority to set living costs in COA based on enrollment status or other factors

  4. NASFAA HEA Reauthorization Need Analysis • Eliminate independent student status related to homelessness • Add receipt of SSI, TANF or General Relief benefits as sole qualifiers for an Auto Zero EFC determination • Eliminate the Simplified Needs Test

  5. NASFAA HEA Reauthorization Need Analysis • Direct ED to study regional cost of living in Income Protection Allowance (IPA) • Treat Foreign Income Exclusion as untaxed income • Add back any business capital, and other losses that do not represent a real loss of income

  6. NASFAA HEA Reauthorization Need Analysis • Eliminate exclusions for small businesses and farm value from assets • Expand and refine IRS Data Download to maximize use • ED and IRS conduct a feasibility study using the 1040 as the primary Federal Student Financial Aid Application

  7. NASFAA HEA Reauthorization Need Analysis • Direct Secretary to explore ways the IRS-DRT model could be extended to other Federal agencies, States and institutions • Treatment of unmarried partners or single sex couples • Definition of “dependent” in family size

  8. NASFAA HEA Reauthorization Loans • Interest rate: variable, fixed, “stepped” • Eliminate loan fees • School authority to limit loan amounts • Eliminate proration for programs longer than 1 year • Separate Grad PLUS and parent PLUS

  9. NASFAA HEA Reauthorization Loans • Annual and aggregate loan limits • Establish one annual subsidized limit by eliminating differences based on year in school • Increase annual and aggregate loan limits • Step aggregate limits - lower limit applies to undergraduate students who have not yet successfully completed second year • Simplify the subsidized/unsubsidized structure

  10. NASFAA HEA Reauthorization Loans • Allow unequal loan disbursements • Reinstate ED authority to offer repayment incentives • Allow late loan origination for 30 days • Separate refinance option from consolidation

  11. NASFAA HEA Reauthorization Loans • Continue need-based borrower subsidies • Remove the 150% subsidy limit • Universal loan portal • Standardize loan servicing policies and procedures • Revisit institutional requirements for private lender lists

  12. NASFAA HEA Reauthorization Consumer Information • Require review of current requirements and restrict to undergraduates • Shift provision of loan disclosures to ED • Decouple Constitution Day, voter registration, athletic disclosures • Shift requirement to provide State assistance information to central Federal site

  13. NASFAA HEA Reauthorization R2T4 • Limit calculation to undergraduates • Narrow definition of schools required to take attendance • Subject calculations to institutional published withdrawal policies • Pro-rata calculation by week

  14. NASFAA HEA Reauthorization R2T4 • Allow FAA discretion, within published policy, on post-withdrawal disbursements • Account for restricted institutional aid in calculation of institutional charges • Increase allowable processing time from 45 to 60 days • Modify order of return

  15. NASFAA HEA Reauthorization R2T4 • Direct ED to seek public comment to ease R2T4 burden and complexity; require dedicated negotiated rulemaking • Require report to Congress on ways to make R2T4 less burdensome, especially for programs offered in modules.

  16. NASFAA HEA Reauthorization Pell and General Provisions • Increase overaward tolerance and include Direct Lending • Restore earned credit ability-to-benefit • Eliminate tie to Selective Service • Eliminate tie to drug convictions

  17. NASFAA HEA Reauthorization Pell and General Provisions • Maximize consistency of reinstatement of student eligibility among programs • Accept data base match for I-9 employment eligibility verification • Allow payment of currently non-automatic allowable charges unless student opts out

  18. NASFAA HEA Reauthorization Pell and General Provisions • Make Pell Grant a true entitlement • Eliminate tie to default rates • Allow 1 more payment beyond LEU to enable completion • Year-round Pell

  19. NASFAA HEA Reauthorization Pell and General Provisions • Increase flexibility on transfers of funds • Revise distribution of school’s Perkins Fund if program ends • Expand definition of community service • Fund community service on separate request

  20. NASFAA HEA Reauthorization Pell and General Provisions • Eliminate private sector employment cap • Tie FSEOG eligibility to Pell-eligible EFC range rather than actual receipt, and eliminate lowest EFC order • Allocation formula remains in development

  21. HEA ReauthorizationSenate Hearings • 11/14/13 • 10/31/13 • 9/16/13 Ensuring Access to Higher Education: Simplifying Federal Student Aid for Today’s College Student Attaining a Quality Degree: Innovations to Improve Student Success The Triad: Promoting a System of Shared Responsibility. Issues for Reauthorization of the Higher Education Act

  22. HEA ReauthorizationHouse – Keeping College Within Reach • 11/13/13 • 9/18/13 • 9/11/13 • 7/9/13 Simplifying Federal Student Aid Improving Access and Affordability through Innovative Partnerships Supporting Higher Education Opportunities for America’s Servicemembers and Veterans Improving Higher Education through Innovation

  23. HEA ReauthorizationHouse – Keeping College Within Reach Discussing Program Quality through Accreditation Enhancing Transparency for Students, Families and Taxpayers The Role of Federal Student Aid Programs Examining Opportunities to Strengthen Federal Student Loan Programs • 6/13/13 • 4/24/13 • 4/16/13 • 3/13/13

  24. Legislation Impacting Higher Ed • College Cost Reduction and Access Act of 2007 • Fixed loan interest rates, public service forgiveness • Ensuring Continued Access to Student Loans Act of 2008 • Increased annual and aggregate Stafford limits, allowed Parents to defer PLUS payments • America Recovery and Reinvestment Act of 2009 • Increased Pell and Hope Scholarship tax credit

  25. Legislation Impacting Higher Ed • Health Care and Education Reconciliation Act of 2010 • Eliminated FFEL, modified IBR plan • FY2011 Continuing Resolution • Elimination of year-round Pell, LEAP funding and Byrd Scholarships • Budget Control Act of 2011 • Elimination of Graduate Subsidized Loan and Origination Fee Rebate

  26. Legislation Impacting Higher Ed • Consolidated Appropriations Act, 2012 (2011) • Auto-Zero threshold reduced, Pell cap reduced, Grace period subsidy suspended, ATB eliminated • Moving Ahead for Progress in the 21st Century Act (2012) • Limited undergraduate loan subsidy to 150% of program length • Sequestration (Budget Control Act of 2011) • Increased loan fees, reduced CBA allocations

  27. What’s Next ?

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