Federal Policy Update

1. 2006 Spring Conference Federal Policy Update Fred Sellers Mary Miller Office of Postsecondary Education June 5, 2006

2. Agenda Enacted Legislation • Final FY 2006 Program Budget • Higher Education Reconciliation Act of 2005 • Other Recently Enacted Legislation Future Actions • President’s FY 2007 Budget Request • HEA Reauthorization • Rulemaking Agenda Policy Issues • State data and FOTW • Treatment of Combat Pay Paul Douglas Teacher Scholarship Program

3. Final FY 2006 Appropriations • Public Law 109-148 – Department of Defense Appropriations Act, 2006 • Emergency Appropriations for Hurricane Education Recovery • 1% Government-wide Reduction of FY 2006 Discretionary Appropriations • Public Law 109-149 – Departments of Labor, HHS, and Education, and Related Agencies Appropriations Act, 2006

4. Final FY 2006 Program Budgets(dollars in thousands) * * * Includes shortfall

5. Higher Education Reconciliation Act of 2005Deficit Reduction Act of 2005—S. 1932 • Conference Report passed the House on December 19, 2005 • Conference Report passed the Senate on December 22, 2005 in slightly different form • House passed Senate version on February 1, 2006 • President signed into law February 8, 2006

6. HERAGrant Programs • Creates two new grant programs • Academic Competitiveness Grant Program • National Science and Mathematics Access to Retain Talent Grant (National SMART Grant) Program • Are funded and operational for the 2006-2007 award year for all four academic years of grant eligibility

7. HERAGrant Programs • Concentrated implementation schedule for the 2006-07 academic year • Complexity and required modification of existing systems • Burden on colleges and their software company partners • To extent practicable, modeling on Federal Pell Grant requirements • Student awareness

8. Academic Year • Awards are by title IV, HEA academic year. • A student must successfully complete both credit hours and weeks to progress to next title IV, HEA academic year. 34 CFR 668.3, 691.15

9. Award Amounts • ACG • First academic year: up to $750 • Second academic year: up to $1,300 • National SMART Grants • Third academic year: up to $4,000 • Fourth academic year: up to $4,000 34 CFR 691.62

10. Award Amounts • Scheduled Award eligibility is for each title IV, HEA academic year (not award year as in Pell). • Scheduled Award amount is by award year. • Ratable reduction implemented if funds for award year are insufficient. 34 CFR 691.2, 691.62

11. Duration of Eligibility • ACG • One Scheduled Award for each of the student’s first and second title IV, HEA academic years of enrollment in an eligible program • National SMART Grants • One Scheduled Award for each of the student’s third and fourth title IV, HEA academic years of enrollment in an eligible program • Limit for a student of not more than two ACG Scheduled Awards and two National SMART Grant Scheduled Awards 34 CFR 691.6

12. Duration of EligibilitySummer • Program with two semesters or trimesters and a single summer term (12 semester or trimester hours in summer term) (Pell Formula 1 and 2) • Summer is treated as 1/2 an academic year. • Summer is treated as 1/3 of an academic year if academic year is over more than two terms. 34 CFR 691.6(d)

13. Duration of EligibilitySummer • Program with three quarters and a single summer term (12 quarter hours in summer term) (Pell Formula 1 and 2) • Summer is treated as 1/3 of an academic year. • Summer is treated as 1/4 of an academic year if academic year is over more than three terms. 34 CFR 691.6(d)

14. Institutional and Program EligibilityGrant Programs • All schools that participate in Pell and offer an eligible educational program must participate in ACG and National SMART Grants. 34 CFR 691.7

15. Student EligibilityGeneral • Is a U.S. citizen • Is enrolled full-time in an eligible degree program • Is receiving a Federal Pell Grant disbursement for the same payment period 34 CFR 691.15(a)

16. Student EligibilityGeneral • A student is not eligible for an ACG or National SMART Grant for a t. IV, HEA academic year that began prior to February 8, 2006. HEA, section 401A(d)(2)

17. ACG Student EligibilityFirst Academic Year • No prior enrollment as a regular student in a program of undergraduate education • Documentation of completion of a rigorous secondary school program of study after January 1, 2006 34 CFR 691.15(b)

18. ACG Student EligibilitySecond Academic Year • Successful completion of first t. IV,HEA academic year in an eligible degree program • Enrollment in second t. IV, HEA academic year • Cumulative GPA of at least 3.0 out of 4.0 for the first academic year of eligible program • Documentation of completion of a rigorous secondary school program of study after January 1, 2005 34 CFR 691.15(b)

19. Rigorous Secondary School Program • Secretary must recognize in each State at least one rigorous secondary school program of study established by a SEA. • States are not required to submit programs for recognition. • To assure all States have at least one program recognized, the Secretary also recognizes 5 alternatives. 34 CFR 691.16

20. Rigorous Secondary School ProgramState Submissions • Secretary’s May 2 letter to States (GEN 06-08): CSSOs, governors, and State higher education executive officers • June 1, 2006: SEA and LEA to submit proposed rigorous secondary school programs for 2006-2007 • November 1, 2006: to submit for 2007-2008

21. Five Alternative Rigorous Secondary Programs • Recognized existing advanced or honors secondary school programs • Secondary programs recognized by the State Scholars Initiative of Western Interstate Commission for Higher Education (WICHE) • A set of courses similar to those required under the State Scholars Initiative • Completion of International Baccalaureate courses and exams • Completion of AP courses and exams

22. Recognized Existing Advanced and Honors Programs Rigorous AK Not Defined ME WA MT ND VT MN NH OR NY MA WI ID SD RI MI CT WY PA NJ IA OH NE DE IN NV IL WV MD UT DC VA CO CA MO KS KY NC TN OK SC AR AZ NM AL GA MS LA TX HI FL Also: Guam, Micronesia, AmericanSamoa, Marshall Islands, etc.

23. State Scholars Initiative Programs SSI AK No SSI programs ME WA MT ND VT MN NH MA OR NY WI ID SD RI MI CT WY PA NJ IA OH NE DE IN NV IL WV MD UT DC VA CO CA MO KS KY NC TN OK SC AR AZ NM AL GA MS LA TX HI FL Also: Guam, Micronesia, AmericanSamoa, Marshall Islands, etc.

24. Set of Courses Similar To State Scholars Initiative • Complete at least • Four years of English • Three years of math • Including algebra I and another higher level class • Three years of science • Including at least two of biology, chemistry, and physics • Three years of social studies • One year of a foreign language other than English 34 CFR 691.16

25. Advance Placement and International Baccalaureate Programs • AP • Completion of at least 2 AP courses, and • Receipt of a score of “3” or higher on AP exams for at least 2 of those courses • IB • Completion of at least 2 IB courses, and • Receipt of a score of “4” or higher on IB exams for at least 2 of those courses 34 CFR 691.16

26. ACG Identification • Department is notifying potential recipients via e-mail/letter in July 2006 with instructions on how to self-identify. • CPS is sending ISIR’s to schools. • Students are able to self-identify. • Schools are also able to identify based on their records and, for the initial year of the program, are expected to make a good-faith effort at identifying eligible students. 34 CFR 668.16(f)

27. Documentation of Secondary School Program • Doubt about documentation from student • Institution must get directly from cognizant authority. • Home schooled students • Parent (or guardian) is cognizant authority for providing documentation. • Transfer Students • Institution may rely on prior school’s determination that student completed a rigorous secondary school program. 34 CFR 691.15 and 691.16

28. National SMART Grant Student Eligibility • Be enrolled in an eligible program for the third or fourth title IV, HEA academic year • Declare an eligible major, or document intent if cannot yet declare major • Have cumulative 3.0 GPA on a 4.0 scale, or the equivalent, in eligible program 34 CFR 691.15(c)

29. National SMART Grant Eligible Majors • Include: • Physical, life and computer sciences • Mathematics • Technology • Engineering • Foreign Languages critical to U.S. national security • Announced for 2006-2007 in GEN-06-06 • Identified by CIP code

30. National SMART Grant Identification • Schools are expected to review records to identify all eligible students. • Registrar and academics can assist with major identification. 34 CFR 668.16(f)

31. Grade Point AveragesTransfer Students • Must calculate a transfer student’s GPA from prior coursework accepted on transfer for first payment period for a student’s ACG or National SMART Grant • Second and subsequent payment periods, must calculate consistent with academic and other title IV purposes 34 CFR 691.15(d)

32. Calculating a Payment for a Payment PeriodGeneral Requirements • Calculation of payment for a payment period is the same as for a Federal Pell Grant. • No formula provided for correspondence study programs since students are never greater than half-time. 34 CFR 691.15(d) 34 CFR 691.63

33. Calculating a Payment for a Payment Periodwith Two Academic Years • In the same payment period, a student may be completing either the credit hours or weeks of instructional time of one academic year and starting the hours or weeks of the next academic year. • The student’s payment is calculated— • Based on all the hours and weeks in the payment period; and • Using the Scheduled Award for academic year being completed. • The disbursement for the payment period is up to the calculated payment depending on the remaining eligibility from the Scheduled Award being completed. 34 CFR 691.63(h)

34. Disbursement of Grants • Disbursement is on payment period basis in same manner as Federal Pell Grants. • ACG and National SMART Grant summer payment period must be assigned to the same award year as Pell. • Summer 2006 cross-over payment period may be assigned to 2006-2007, and a student may receive an ACG or National SMART Grant. • Initial allocations will be available 7/29/06. • First draw downs from GAPS will be available first week of August 2006. 34 CFR 691.64 and 691.75

35. Payments from Only One School • Student may not receive an ACG or National SMART Grant concurrently from more than one school. • Student must receive ACG and National SMART Grants from same school as the student’s Federal Pell Grant. 34 CFR 691.11

36. Transfer Students • Determination of remaining percentage of eligibility from a Scheduled Award is similar to Federal Pell Grant provisions for transfers. • Remaining percentage is based on percentage of the award for an academic year (not award year as in Pell). • Transfer student must receive a Pell Grant in same payment period for which an ACG or National SMART Grant is received. 34 CFR 691.65

37. Need-based GrantsPackaging • Total of EFC and all estimated financial assistance (as defined for FFEL, DL, and CB) cannot exceed cost of attendance. • ACG and National SMART Grants may not replace EFC in determining need. • An ACG or National SMART Grant award may be reduced to prevent an overaward. • There is no required order of reductions in relation to ACG and National SMART Grants. 34 CFR 668.35(g) and 691.62(c)

38. Recalculation for Changes in Enrollment Status • Requirements are the same as Federal Grant Program except that students must be full-time. • Institutions should use their Federal Pell Grant recalculation policy to determine enrollment status for an ACG and National SMART Grant. • If an institution uses a “census date” for Federal Pell Grant enrollment status, it can use it for ACG and National SMART Grants. 34 CFR 691.80(b)

39. Institutional Impact • Requires close coordination and involvement of: • Financial Aid Office • Registrar’s Office • Admissions Office • Academic Departments • Bursar’s Office

40. Resourcesfor ACG and National SMART Grants • Secretary’s letter to CSSO’s, governors, and State higher education executive officers: http://www.ed.gov/policy/highered/guid/secletter/060502.html • Dear Colleague Letters • GEN-06-04 • GEN-06-06 • GEN-06-08 • IFAP Electronic Announcement, 5/05/06 • http://www.ifap.ed.gov/eannouncements/0505HERAOperationalImplGuide.html

41. Higher Education Reconciliation Act of 2005Institutional and Program Eligibility Definition of Academic Year • Changes the definition of “academic year” to mean at least 26 weeks of instructional time for a program that measures progress in clock hours (instead of current 30-week minimum) (Effective 7/1/06)

42. Higher Education Reconciliation Act of 2005Institutional and Program Eligibility Definition of Academic Year (cont.) • Retains other current requirements • Still requires, for an undergraduate program, at least 24 semester or trimester hours or 36 quarter hours for credit-hour programs or at least 900 clock hours for clock-hour programs (Effective 7/1/06)

43. Higher Education Reconciliation Act of 2005Institutional and Program Eligibility Amend 50% Rule • Excludes telecommunication courses from the so-called “50%” related to distance education • No longer consider telecommunications courses to be correspondence courses • Provides that institutions may be eligible with more than 50% of courses via telecommunications or 50% or more of their regular students in telecommunications courses • Retains 50% limit on correspondence study (Effective 7/1/06)

44. Higher Education Reconciliation Act of 2005Institutional and Program Eligibility Short-Term Telecommunications Programs • Eliminates the requirement that a certificate program offered through telecommunications must be one year or longer in order for it to not be considered a correspondence course (and therefore ineligible for Title IV assistance) (Effective 7/1/06)

45. Higher Education Reconciliation Act of 2005Institutional and Program Eligibility Recognition of Distance Education Programs • Provides that a program offered in whole or in part through telecommunications is an eligible program if it has been specifically approved by its accrediting agency that is recognized by the Secretary and has distanced education in its scope • Does not apply to programs offered by a foreign institution (Effective 7/1/06)

46. Higher Education Reconciliation Act of 2005Institutional and Program Eligibility Program Using Assessment to Measure Progress • A program that measures progress by direct assessment of students is an eligible program if the assessment is consistent with standards of the institution’s accrediting agency. • Initial eligibility is determined by the Secretary. • Direct assessment does not include credit for “life experience.” (Effective 7/1/06)

47. Higher Education Reconciliation Act of 2005FFEL, Direct Loans, & Perkins Loans Active Duty Military Deferment • Provides for a military deferment of up to three years for FFEL, Direct Loan, and Federal Perkins Loans that were first disbursed on or after July 1, 2001 • Includes definitions of terms used in the deferment • Provides that there is no refund of payments made (Effective for any loan made on or after July 1, 2001)

48. Higher Education Reconciliation Act of 2005FFEL and Direct Loans Increase Loan Limits in FFEL and Direct Loan • Increases annual loan limits • First year students from $2,625 to $3,500 • Second year students from $3,500 to $4,500 • Increases unsubsidized loan annual limit for graduate students from $10,000 to $12,000 • Does not change aggregate loan limits (Effective for loans certified or originated on or after 7/1/07)

49. Higher Education Reconciliation Act of 2005FFEL and Direct Loans Extends PLUS Eligibility to Graduate Students • Extends eligibility for PLUS Loans to graduate and professional students • Retains all eligibility criteria including credit checks and no in-school status • Provides for an in-school deferment Note: Student must file a FAFSA. (Effective for loans certified or originated on or after 7/1/07)

50. Higher Education Reconciliation Act of 2005FFEL and Direct Loans Loan Rehabilitation • Provides that the number of on-time payments required to rehabilitate a loan would be reduced from 12 to 9 made within 20 days of the due date during 10 consecutive months (Effective 7/1/06)