Session # 11

1. Session # 11 General Provisions Regulations Package Michelle Belton Brian Kerrigan

2. History • Negotiated Rulemaking • Federal Register Notice - Aug. 18, 2006 • Regional hearings • Berkeley, CA - Sep. 19, 2006 • Chicago, IL - Oct. 5, 2006 • Orlando, FL - Nov. 2, 2006 • Washington, DC - Nov. 9, 2006

3. History (continued) • Four negotiating committees were established: • General Provisions • Loans • Academic Competitiveness & National SMART Grants • Accreditation • Negotiations from December - June

4. General Provisions Package • Consensus reached • August 8, 2007 NPRM: • reflected the proposed regulatory language agreed to by committee • 22 public comments received by end of comment period (September 7, 2007) • Final rules: November 1, 2007 • Effective date: • July 1, 2008 • Early implementation

5. General Provisions Package • Definitions • Professional degree • Graduate or professional student • Undergraduate student • Full-time student • Three quarter-time student • Half-time student

6. General Definitions • Professional Degree • Above bachelor’s degree • Generally requires professional licensure • List of examples, including J.D., D.V.M., D.D.S., Pharm. D.

7. General Definitions • Graduate or professional student • Two key points: • Grad/Prof students cannot receive undergraduate level aid and graduate level aid at same time • Institution can change a student’s status from “undergraduate” to “graduate or professional” once a student has completed at least 3 years at undergraduate level.

8. Undergraduate student Key Points: For Perkins, FFEL, and DL programs, any student who takes courses at or below the baccalaureate level is an undergraduate For Pell, ACG, SMART, and FSEOG a student is only an undergraduate if she is pursuing her first bachelor’s degree or below General Definitions

9. General Definitions • Undergraduate student (cont’d) • For Pell, a student who has a bachelor’s and is studying to earn a state-required teaching certification could be an undergraduate • First three years of a dual degree program students are undergraduates • First four years of a program lasting longer than five years that leads to a bachelor’s degree.

10. General Definitions • Full-time student • Moved calculation from Pell Grant regulations • Also clarified definition of full-time student for correspondence programs

11. General Definitions • Half-time student & Three-quarter time student • Existing definitions in the Pell Grant program regulations were moved to the General Provisions regulations

12. General Provisions Package • Other “definitions” • Independent study for direct assessment programs • Substantially equal in length • Successfully completes • Treatment of aid when recipient does not begin classes

13. Direct Assessment Programs • Independent Study • Only applies to Direct Assessment Programs • Course of study with predefined objectives determined by student & professor • Requires regular and substantive interaction

14. Treatment of Aid when recipient does not begin classes • Key Points • Consolidated Return to Title IV requirements in General Provisions. • Must return Title IV funds used to pay a student’s expenses within 30 days of discovering a student has failed to attend class. • Institutions restricted from disbursing funds to any student who they know will not be starting classes (i.e., a student who has been expelled)

15. Treatment of Aid when recipient does not begin classes • Key Points (continued) • Institutions not required to return funds that are disbursed directly to a student in a study abroad program or who is attending a foreign institution • Institutions must notify lenders to issue a final demand notice to these students

16. General Provisions Package • Payment period • Credit hour with standard terms or terms that are substantially equal • Credit hour with terms that are not substantially equal • Credit hours w/o terms or clock hours • Cohort default rate exemption • Excused absences • Re-entry w/i 180 days • Re-entry after 180 days or transfer

17. Payment Period • For credit hour programs with standard terms or terms that are substantially equal, it’s the term • For credit hour with terms that are not substantially equal— • Grants and Perkins, it’s the term • FFEL and DL, it’s ½ the credit hours and ½ the weeks • For credit hours w/o terms or clock hours, it’s ½ the (credit or clock) hours and ½ the weeks

18. Payment Period • When the cohort default rate exemption applies, it’s the loan period • Excused absences count if— • Written policy • # does not exceed the lesser of • accrediting agency policy, • State agency policy, or • 10%

19. Payment Period • Re-entry w/i 180 days, stay in the same payment period • Re-entry after 180 days or transfer – • calculate new payment periods, or • remain in the same payment period, • Continuous enrollment, • Substantially similar coursework, • Substantially equal payment periods, • Little or no changes in charges, & • Credits are accepted in new program

20. General Provisions Package • Minimum period for loan • Credit hour with standard terms or terms substantially equal, with no term less than 9 weeks • Clock hours or credit hours w/o standard terms and w/o terms that are substantially equal with no term less than 9 weeks • Transfer students • Completing one program and immediately starting another

21. Minimum Period for a Loan • For credit hour program with standard terms or terms substantially equal, with no term less than 9 weeks, it’s the term • For clock hours or credit hours w/o standard terms and w/o terms that are substantially equal with no less than 9 weeks, it’s the lesser of— • The length of the program (or the remaining portion of the program), or • The academic year

22. Minimum Period for a Loan • For transfer student, it’s the remaining portion of the program or academic year (The student can get the remaining balance of the annual loan) • For completing one program and immediately starting another, it’s the remainder of the academic year (The student can get the remaining balance of the annual loan limit at the loan level of the new program)

23. General Provisions Package • Academic year progression • Credit hour programs with standard terms or terms substantially equal, with no term less than 9 weeks • Credit hour program with non-standard terms that are not substantially equal or each term is not at least 9 weeks or credit hours w/o terms • Clock hour programs

24. Academic Year Progression • For credit hour programs with standard terms or terms substantially equal, with no term less than 9 weeks, the student progresses when the academic year calendar period elapses

25. Academic Year Progression • For credit hour programs with non-standard terms that are not substantially equal or each term is not at least 9 weeks or credit hours w/o terms, the student progresses at the later of— • Completion of the weeks, or • Completion of the coursework

26. Academic Year Progression • For clock hour programs, the student progresses at the later of • Completion of the weeks, or • Completion of the clock hours

27. R2T4 Changes • Confirmation not needed for PWD of grant funds • PWD of grant funds asap but no later than 45 days after the institution determines the student withdrew • PWD of loan funds asap but no later than 180 days after the institution determines the student withdrew • Use of the payment period that ends later (see next slide)

28. R2T4 • For credit hour programs with non-standard terms that are not substantially equal in length—if the payment period is used for calculation and the student gets: 1) grants and/or a Perkins (where the payment period is the term), and 2) an FFEL or DL (where the payment period is ½ the hours and ½ the weeks), • Use the payment period that ends later, and • Attribute funds to the payment period that ends later

29. R2T4 Changes Academic Year is 24 credit hours & 30 weeks Terms: 1 = 10 wks, 2 = 6 wks, 3 = 14 wks. FFEL (DL) PP1 FFEL (DL) PP2 15 weeks 15 weeks WD at day 50 10 weeks 6 weeks 14 weeks Grant PP1 Grant PP2 Grant PP3 (Perkins) (Perkins) (Perkins)

30. R2T4 Changes • The WD was at day 50 (which is in both the FFEL/DL PP1 and the Grant/Perkins PP1) • Assume student got an FFEL and a Pell • FFEL/DL PP1 = 15 weeks* • Grant/Perkins PP1 = 10 weeks • Determine the payment period that ends later* and use it

31. R2T4 Changes PP 1 = 10/30 X $4,310 = $1,437 PP 2 = 6/30 X $4,310 = $ 862* PP 3 = 14/30 X $4,310 = $2,011 • Attribute the portion of Pell from the Pell PP 2 to be included as Aid That Could Have Been Disbursed (as if Pell was disbursed for the FFEL PP 1) (Attribution for 5 wks of Pell from PP 2 is: 5/6 X $862* = $718)

32. R2T4 Changes • Total Title IV Aid disbursed or could have been disbursed for R2T4 calculation: FFEL PP 1 = $1,750 Pell PP 1 = $1,437 Portion from Pell PP 2 = $ 718 Total $3,905

33. Calculation of a Pell Grant • Use of Formula 1 • Credit hour programs • 12 hours for full-time per term • At least 30 weeks • In 2 semesters or trimesters (fall through spring) or 3 quarters (fall, winter, spring) with no overlapping terms • Any 2 semesters or trimesters or 3 quarters that have periodic starts (e.g., monthly), where students are not in overlapping terms

34. Calculation of a Pell Grant • Credit hour w/o terms and clock hour programs (Formula 4) • Scheduled Pell x the lesser of— Hours in the payment period Hours in the academic year OR Weeks in the payment period Weeks in the academic year

35. Calculation of a Pell Grant • Correspondence programs w/o terms (Formula 5) • Half-time amt x the lesser of— Hours in the payment period Hours in the academic year OR Weeks in the payment period Weeks in the academic year

36. Calculation of an ACG/SMART • Use of Formula 1 • Credit hour programs • 12 hours for full-time per term • At least 30 weeks • In 2 semesters or trimesters (fall through spring) or 3 quarters (fall, winter, spring) with no overlapping terms • Any 2 semesters or trimesters or 3 quarters that have periodic starts (e.g., monthly), where students are not in overlapping terms

37. Calculation of an ACG/SMART • Credit hour w/o terms and clock hour programs (Formula 4) • Scheduled award x the lesser of— Hours in the payment period Hours in the academic year OR Weeks in the payment period Weeks in the academic year

38. General Provisions Package • Cash Management • Issuing a check • Electronic disbursements • Minor prior-year charges • Late disbursements • Returning unclaimed funds • Loan cancellation notice and confirmation of a loan • Excess cash

39. Cash Management • Issuing a check • Issued on date mailed or date student notified • Student has 21 days to pick up check • After 21 days, school must mail check, initiate EFT or return the funds

40. Cash Management • Electronic Disbursements • School may have a policy requiring students to have bank account • If student does not have or want an account, school must disburse funds in another way • If school opens an account or actively assists student, certain conditions apply

41. Cash Management ● Electronic Disbursements • Must obtain student’s written consent to open the account • Inform student of terms and conditions • May not make any claims against the funds in the account • No cost to student for opening account or receiving debit or stored-value card

42. Cash Management ● Electronic Disbursements • Ensure that student has convenient access to branch office or ATM, no fees for cash withdrawals • School may not limit use of the card to certain vendors • May not market or portray card as a credit card

43. Cash Management • Minor prior-year charges • Amount increases to not more than $200 • Do not need to get student’s permission for tuition and fees or room and board • Cannot use current year funds to cover prior-year charges of more than $200

44. Cash Management • Late disbursements • Late disbursement period extended from 120 to 180 days • No late disbursements after 180 days

45. Cash Management • Returning unclaimed funds • Uncashed check must be returned no later than 240 days after check issued • If check or EFT is returned, can make additional attempts to re-disburse • Attempts must be made no later than 45 days after EFT or check is returned • Title IV funds never escheat to the state

46. Cash Management • Loan notice and confirmation • If school obtains affirmative confirmation, current loan notice procedures apply • Without confirmation: • Must notify student not earlier than 30 but no later than 7 days after crediting account • Must give student 30 days to cancel loan or loan disbursement

47. Cash Management • Loan notice and confirmation • Affirmative confirmation is a process where a school obtains written confirmation of the types and amounts of title IV loans the student wants for an award year • Must be obtained before loan funds are disbursed • Includes signed award letters, web-based process for accepting awards

48. Cash Management • Excess Cash • Includes any title IV funds received from ED that are deposited or transferred into a federal account as a result of an award cancellation, adjustment, or recovery • Only the 1% tolerance option is retained • Finding may trigger cash monitoring or reimbursement

49. Contact Information We appreciate your feedback and comments. We can be reached at: • Michelle.Belton@ed.gov (202) 502-7821 • Brian.Kerrigan@ed.gov (202) 219-7058 • Fax Number (202) 502-7874