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What s new in Title IV laws, regulations and guidance

Agenda. Final rules effective July 1, 2011FAQsFinal rules effective July 1, 2012highlightsOn the horizonResources. 2. November 2-4, 2011. 2011 Knowledge Symposium. . Program Integrity final rules: effective July 1, 2011. 3. November 2-4, 2011. 2011 Knowledge Symposium. Program Integrity web p

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What s new in Title IV laws, regulations and guidance

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    1. What’s new in Title IV laws, regulations and guidance? Laura Kowalski, TG Sheryl Mahoney, USA Funds Vicki Shipley, NCHELP November 2-4, 2011 2011 Knowledge Symposium 1

    2. Agenda Final rules effective July 1, 2011—FAQs Final rules effective July 1, 2012—highlights On the horizon Resources 2 November 2-4, 2011 2011 Knowledge Symposium

    3. Program Integrity final rules: effective July 1, 2011 3 November 2-4, 2011 2011 Knowledge Symposium

    4. Program Integrity web page ED’s Program Integrity Information - Questions and Answers http://www2.ed.gov/policy/highered/reg/hearulemaking/2009/integrity-qa.html 4 November 2-4, 2011 2011 Knowledge Symposium

    5. Rules effective July 1, 2011 Satisfactory academic progress (SAP) State authorization Retaking coursework Return of Title IV funds (R2T4) Gainful employment 5 November 2-4, 2011 2011 Knowledge Symposium

    6. Satisfactory academic progress (SAP) 6 November 2-4, 2011 2011 Knowledge Symposium

    7. SAP Q: What constitutes a SAP evaluation? Is a school required to review both the qualitative (grade-based) and quantitative (time-based) SAP measures at the same time? A: A SAP review is not complete until both the qualitative and quantitative measures have been reviewed. 7 November 2-4, 2011 2011 Knowledge Symposium

    8. SAP Q: If a student successfully appeals and is placed on probation under the new SAP rules, when must the student be reviewed? A: The student must be reviewed at the end of the initial payment period on probation, even if the school’s SAP policy requires only an annual review. 8 November 2-4, 2011 2011 Knowledge Symposium

    9. SAP Q: Must an academic plan be established individually for each student or can it be the same for all students or categories of students? A: An academic plan is developed by the school and the student individually.  It is possible that a general plan could be used for students in a similar circumstance and then customized, as needed, for each student’s particular circumstance. 9 November 2-4, 2011 2011 Knowledge Symposium

    10. State authorization 10 November 2-4, 2011 2011 Knowledge Symposium

    11. State authorization Q: My school offers distance education programs to students across the country. Where can I find a list of State laws and requirements? A: Initial release of the “Compendium of State Laws and Regulatory Practices” by SHEEO & NCHEMS (September 6, 2011) Includes directory of State regulatory agencies Summarizes laws and practices of 51 (out of 76) of these agencies http://www.sheeo.org/stateauth/stateauth-agency.htm    11 November 2-4, 2011 2011 Knowledge Symposium    

    12. State authorization Q: Based on the July 12th decision by the U.S. District Court for the District of Columbia that struck down a portion of the State authorization rules regarding distance education, must schools still comply with the final regulations? A: Yes. States with regulations still expect schools to be in compliance with their laws. 12 November 2-4, 2011 2011 Knowledge Symposium

    13. Retaking coursework 13 November 2-4, 2011 2011 Knowledge Symposium

    14. Retaking coursework Q: If a student failed a class and then repeated it and got a ‘C’, how many more times can the student be paid for that same class? A: Only once. If ‘C’ is a passing grade, the student may be paid only for one additional retake of that class. 14 November 2-4, 2011 2011 Knowledge Symposium

    15. Retaking coursework Q: How many times can a student receive Title IV aid if he keeps failing a class? A: There is no limit. 15 November 2-4, 2011 2011 Knowledge Symposium

    16. Retaking coursework Q: We know if a student gets an ‘F’ he can retake the course and be paid Title IV funds. What if one of our programs requires a ‘C’ to pass each class? A: If the school requires a ‘C’ or above to pass a class, then any grade below ‘C’ would be a failing grade for the purpose of this requirement. So a student who fails to achieve a ‘C’ would be permitted to retake the class (and receive aid) until he attains a grade of ‘C’ or better. 16 November 2-4, 2011 2011 Knowledge Symposium

    17. Return of Title IV funds (R2T4) 17 November 2-4, 2011 2011 Knowledge Symposium

    18. R2T4 Q: Can a school wait to perform an R2T4 calculation to see if a student who has withdrawn and has not provided written confirmation of future attendance will return later in the payment period or period of enrollment? A: No. ED expects schools to perform the calculation upon determining that the student has withdrawn. 18 November 2-4, 2011 2011 Knowledge Symposium

    19. R2T4 Q: A student ceases attendance in the first of three modules he is scheduled to attend and then drops classes in the two remaining modules prior to the beginning of module two. Does the “total number of calendar days” in the period include all the days in all the modules, or just the days in the first module? A: The total number of calendar days includes all the days in all of the modules. 19 November 2-4, 2011 2011 Knowledge Symposium    

    20. R2T4 Q: If a school only takes attendance during a census period, is the school considered required to take attendance? A: The school is considered required to take attendance for any student who withdraws during the census period—and not required to take attendance for any student who withdraws after that period ends. 20 November 2-4, 2011 2011 Knowledge Symposium

    21. Gainful employment 21 November 2-4, 2011 2011 Knowledge Symposium

    22. Gainful employment (GE) E-ANN (May 12, 2011) Gainful Employment Information Page Regulations DCLs and e-announcements FAQs http://ifap.ed.gov/GainfulEmploymentInfo/ 22 November 2-4, 2011 2011 Knowledge Symposium

    23. GE Q: How do I determine whether a program is a GE program? A: E-ANN (June 24, 2011)—A GE program: Includes virtually all programs offered by for-profit schools Includes virtually all non-degree (certificate) programs offered by public and nonprofit schools 23 November 2-4, 2011 2011 Knowledge Symposium

    24. GE Q: What is the GE reporting date for the 2006-2007 through 2009-2010 award years? A: Federal Register notice and E-ANN (August 2, 2011); GE reporting dates For 2006-2007 through 2009-2010 award years, GE reporting deadline is October 1, 2011; however, ED will continue to accept information through November 15, 2011 For 2010-2011 award year, GE reporting deadline is November 15, 2011 24 November 2-4, 2011 2011 Knowledge Symposium

    25. GE Q: What happens if a school does not submit the required notification for a new GE program 90 days before the planned first day of class? A: If a school does not provide timely notice, it must wait for ED approval before disbursing Title IV funds to students enrolled in the new GE program. 25 November 2-4, 2011 2011 Knowledge Symposium

    26. Program Integrity final rules: effective July 1, 2012

    27. Verification 27 November 2-4, 2011 2011 Knowledge Symposium

    28. Verification Discontinues use of five standardized verification items Customizes verification based on most error-prone data items specific to applicant Requires ED to publish Federal Register Notice each award year listing: Potential verification items, and Acceptable documentation 28 November 2-4, 2011 2011 Knowledge Symposium

    29. Verification Schools must verify all CPS-selected applicants 30% cap on verification of applicants eliminated Schools must verify all selected applicants unless verification exclusions apply Schools must complete verification prior to performing professional judgment (PJ) Rules continue to allow school flexibility to verify additional items and applicants Rules continue to require school to resolve conflicting information 29 November 2-4, 2011 2011 Knowledge Symposium

    30. Verification DCL GEN-11-03; IRS Data Retrieval Process for the 2012-2013 FAFSA processing cycle ED expects the applicants to use the IRS Data Retrieval process either at the time of filing an initial FAFSA on the Web or later using the corrections process to provide federal income tax information Applicants who did not use the retrieval process, or were not eligible, are expected to provide the school with an official IRS transcript for verification DCL GEN-11-13; required documentation and process for obtaining an official IRS tax transcript 30 November 2-4, 2011 2011 Knowledge Symposium

    31. Verification Q: What are schools most concerned about regarding the new verification rules? A: Significant concerns include: Additional administrative burden due to potential of: More files selected for verification More items to be verified Official IRS transcript requirement Consideration of third-party servicing 31 November 2-4, 2011 2011 Knowledge Symposium

    32. Gainful employment— debt measures 32 November 2-4, 2011 2011 Knowledge Symposium

    33. GE—debt measures Establishes two types of measures to determine which programs do an adequate job of preparing students for gainful employment: Loan repayment rate Debt-to-earnings ratios (two separate but related measures) Earnings rate Discretionary income rate 33 November 2-4, 2011 2011 Knowledge Symposium

    34. Loan repayment rate Determines if former students who entered repayment on FFELP and FDLP loans for the program have made sufficient payments during the most recent fiscal year (FY) to reduce the outstanding balance (including capitalized interest) Former students include both completers and non-completers FFELP and FDLP loans include Stafford and Grad PLUS (not parent PLUS or TEACH Grant-related loans) 34 November 2-4, 2011 2011 Knowledge Symposium

    35. Earnings rate Determines the percentage of a typical program completer’s annual earnings consumed by loan repayment Generally includes all students who completed the program during the applicable two-year (or four-year) reporting period Includes FFELP and FDLP loans, private education loans, and institutional financing debt 35 November 2-4, 2011 2011 Knowledge Symposium

    36. Discretionary income rate Determines the percentage of a typical program completer’s discretionary income that is consumed by loan repayment Generally includes all students who completed the program during the applicable two-year (or four-year) period Includes FFELP and FDLP loans, private education loans, and institutional financing debt 36 November 2-4, 2011 2011 Knowledge Symposium

    37. Loans excluded from calculations Loans in a military-related deferment status during any part of the FY Loans that have been transferred or assigned to ED due to a borrower’s total and permanent disability, as well as loans that have been discharged for this reason Loans that have been discharged due to a borrower’s death 37 November 2-4, 2011 2011 Knowledge Symposium

    38. Gainful employment—debt measures performance standards and consequences 38 November 2-4, 2011 2011 Knowledge Symposium

    39. Performance standards A program adequately prepares students for gainful employment if it meets at least one of the three debt standards: Loan repayment rate is 35 percent or greater Earnings rate is 12 percent or less Discretionary income rate is 30 percent or less 39 November 2-4, 2011 2011 Knowledge Symposium

    40. Draft review and challenge process ED will issue draft results for the program debt measures, starting with the FY 2012 rates to be released in 2013 School can review and correct or update certain data before debt measures are finalized List of students Borrower loan data Median loan debt for the program 40 November 2-4, 2011 2011 Knowledge Symposium

    41. Failing performance standards A program does not meet GE performance standards if it fails all of the debt standards: For a single year: failing program For three of four years: ineligible program 41 November 2-4, 2011 2011 Knowledge Symposium

    42. Debt warnings If a school’s program fails to meet the minimum standards for all of the debt measures in a single FY, the school must: Provide certain information to currently-enrolled and prospective students for the program in a “debt warning” notice First-year warning Second-year warning 42 November 2-4, 2011 2011 Knowledge Symposium

    43. Timeline for implementation 43 November 2-4, 2011 2011 Knowledge Symposium

    44. GE debt measures Q: What are schools most concerned about regarding the new GE debt measures? A: Significant concerns include: Understanding details of new requirements Timeframes for determination of loss of eligibility How can guarantors and servicers help? 44 November 2-4, 2011 2011 Knowledge Symposium

    45. On the horizon 45 November 2-4, 2011 2011 Knowledge Symposium

    46. National Student Loan Cohort Default Rates

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