2013 High School Advisor Training Federal and State Update

1. 2013 High School Advisor TrainingFederal and State Update

2. About OASFAA & This Presentation • OASFAA is a non-profit organization comprised of volunteer financial aid professionals. • OASFAA has provided the information today as a free service to access staff and high school counselors. • You have permission to copy and distribute these materials to your students and families. Charges may not be assessed for the material or for the information presented. Permission must be granted for other use of this information or these materials. Contact the OASFAA Outreach Chairperson(s) listed on the OASFAA website, or e-mail the OASFAA Outreach Committee at outreach@oasfaa.org

3. “The Guide” “The Guide” refers to The Guide to Federal Student Aid. The Guide is available free to download from www.fsapubs.gov. A hard copy can also be requested for free from the same website.

4. But before we get started… • Parents and students have the primary responsibility for meeting college costs. • The distribution of financial aid resources should be based on the family’s ability to pay—not willingness to pay. • The assessment of a family’s ability to pay should be independent of the amount of financial aid available and cost of attending college.

5. Definition of “Need” Cost of Education (COA) - ExpectedFamily Contribution (EFC) = Need

6. Today’s Agenda • Deadline and FAFSA Overview • Program Integrity Updates • Update on Federal Aid Programs • Update on State Aid Programs • Review of Resources for Counselors

7. Deadline and FAFSA Overview 7

8. Priority Deadlines Ohio’s Priority Deadline Survey features a list of all Ohio Schools and their FAFSA deadlines. This is published annually and available on the Counselor’s page at www.oasfaa.org. • Priority deadlines are very real, and should be treated as such! • Schools may have a FAFSA deadline AND an admissions deadline-be aware of the difference.

9. Priority Deadlines Feb 4 is earliest that IRS will process tax returns. We anticipate more estimated tax returns. • If a FAFSA priority deadline exists, it is best to use completed tax information via the IRS Data Match process. • If taxes have not been completed, use estimated income and tax information. • Make sure to update your FAFSA with IRS Data Retrieval once tax filing is complete.

10. Federal PIN Homepage • www.pin.ed.gov • Allows the student and parent to establish a federal pin number, which is needed to electronically sign the FAFSA.

11. FAFSA on the Web Homepage • www.fafsa.ed.gov • Simplified options • An updateable announcement section • Access to FAFSA PDF and paper FAFSA information

12. Need a little help completing the FAFSA? • “Help” icon • Live online chat • E-mail option • 800-4-FED-AID • College Goal Sunday • http://www.youtube.com/watch?v=031zj-PqveU

13. Detailed College Info and Comparison • College’s website • School type • Tuition and fees • Net price average • Graduation rates • Retention rates • Transfer rates

14. Higher Education Reconciliation Act of 2005 (HERA)College Cost Reduction and Access Act of 2007 (CCRAA) • Increased income protection allowance for dependent students: • 11-12 $5,250 • 12-13 $6,000 • 13-14 $6,130 • 14-15 $6,260 • Bust the myth! • A summer job won’t “count against me!”

15. Who is considered a Parent when completing the FAFSA? 15

16. Changes for 2014-2015 Beginning with the 2014-2015 FAFSA, a dependent student will be required to include income and other information about both of the student’s legal parents (biological or adoptive) if the parents are living together, regardless of the parents’ marital status or gender.

17. Changes for 2014-2015 • Until an April update occurs. • Because unmarried parents may be of the opposite sex or of the same sex, when the response to the parents’ marital status question is “Unmarried and both parents living together,” follow-up questions will refer to the parents as “Parent 1 (father/mother)” and “Parent 2 (father/mother)” or simply “parents.” • “Married” will result in “Father” and “Mother” though same sex married couples will still need to complete both as if “Parent 1” and “Parent 2” labels were in place. • April update should normalize labeling as “Parent 1” and “Parent 2”

18. Who is a Parent? Biological parents Adoptive parents Stepparents, if they are married to the student’s biological or adoptive parent and the student is included in their household size

19. Who is NOT a Parent? Foster parents Legal guardians who have not adopted the student Relatives who have not adopted the student Stepparents who have not adopted the student and who would be the ONLY person providing parental information

20. Comparison FY14 and FY15 Note: A stepparent is created through legal marriage (regardless of adoption) or, when legal marriage has not occurred, through formal adoption of an unmarried partner’s children.

21. Who is a Parent?

22. Who is a Parent?

23. Program Integrity Updates 23

24. Satisfactory Academic Progress (SAP) Policy • What is Satisfactory Academic Progress (SAP)? • SAP refers to ensuring that a student progresses toward the completion of a degree or certificate in a timely manner, as prescribed by the U.S. Department of Education (ED). • ED is now requiring schools to have a SAP policy separate from an institution’s academic standards policy.

25. Elements of SAP • ED states that every school’s SAP policy must include three (3) elements: • Grade Point Average, or GPA • 2.0 GPA or higher • Completion Percent • 67% cumulative completion percent • Maximum timeframe for degree/certificate completion • 150% of the program requirements.

26. Consequences of Not Meeting SAP Elements • Financial Aid Warning • A student will have one semester of financial aid warning. Students will still be eligible for federal aid during the financial aid warning period, but must meet all SAP elements before the beginning of the upcoming semester. • Schools are not required to extend a warning period if they only review SAP annually.

27. Consequences of Not Meeting SAP Elements • Financial Aid Suspension • A student who fails to meet all SAP elements by the end of the financial aid warning period will be subject to financial aid suspension. • The student loses all federal aid, and potentially lose state and private aid, as well. • Schools may have separate financial aid and academic policies. Both will apply to the students!

28. SAP: Appealing Financial Aid Suspension • Students who face financial aid suspension may have the ability to appeal the suspension. • Appeal avenues may vary from school to school;please check with the individual Financial Aid Office to review their specific appeals process.

29. Verification • What is verification? • Financial aid verification is the process of establishing the accuracy of the information submitted on the FAFSA.

30. Verification • Why was I selected for verification? • The Central Processor (a.k.a. the U.S. Department of Education) selects applicants for verification based on statistical analysis. • An institution may also require applicants verify FAFSA information

31. Verification • How does a student complete the verification process? • The best thing to do is to read through any/all communication received from the institution, as it will guide you through the process.

32. Verification • Changes in the verification requirements. • Other untaxed income and benefits • Previous verification items are still in play!

33. Verification • Documentation of untaxed income and benefits • Untaxed income information reported in Question 45 for the student and spouse and Question 94 for the dependent student’s parents • If the verified income does not appear to provide sufficient financial support, the student or parents must explain how the family was supported during the 2013 calendar year

34. Verification • What documents are acceptable for financial information? • IRS Data Retrieval Tool • http://www.youtube.com/watch?annotation_id=annotation_112011&feature=iv&src_vid=W47_YTRVYD4&v=QJYE4PTYRfs • IRS Tax Return Transcript • Students need the Tax Return Transcript, NOT the Account Transcript unless the Account Transcript includes all of the income and tax information required to be verified - adjusted gross income (AGI), U.S. income tax paid, Untaxed IRA Distributions, Untaxed Pensions, Education Credits, IRA Deductions and Tax Exempt Interest - is acceptable (e.g., an IRS Record of Account Transcript). • http://youtube.com/watch?v=0wFNqs4Mqdg • www.irs.govor 800-908-9946 • Can also be obtained in person if you have a local IRS office. • W2’s for non-tax filers

35. Verification • Challenges in using IRS Data Retrieval Tool • It is only available 1-2 weeks after e-filing; 6-8 weeks when returns are mailed. • Address must match EXACTLY as shown on return. • Folks filing an amended return or who are married filing separately are not eligible.

36. Verification • Documentation for Independent Students • Guardianship, ward of the court • Must have copy of court document • Homelessness • Homeless liaison, pastor, school counselor

37. Special Circumstances • Sometimes, things outside of the federal mold happen. • Financial aid offices can make changes to a student’s FAFSA information based on special circumstances.

38. Net Price Calculator • Strengths • Designed to provide accurate and timely information about the net price of a college. • Can assist families in comparing colleges based on net price and financial aid.

39. Net Price Calculator • Weaknesses • Inclusion of direct and indirect costs in “price of attendance” component can significantly inflate the price tag. • Institution’s flexibility to customize template could make college costs comparisons an extremely complex process.

40. Shopping Sheet • Some schools will be using what’s referred to as a “Shopping Sheet.” • Could replace or supplement their current award letter. 40

41. Update on Federal Aid Programs 41

42. Political Climate • Two current climate drivers • Partisanship & Brinkmanship • Budget politics dictating policy 42

43. Reauthorization • The 1965 Higher Education Act governs the nation’s student-aid programs and federal aid to colleges. Part of President Johnson’s Great Society agenda of domestic programs, it must be reauthorized every five years. It’s up for renewal again in 2014, and lawmakers have begun holding hearings and soliciting input to inform the process. • Many changes in student-aid policy are now being made outside of the reauthorization process, in spending bills and federal rules. • Reauthorization still significant and some in congress have referenced putting off major higher education policy changes until Reauthorization occurs. Source: The Chronicle, September 19, 2013 “What You Need to Know About Reauthorization”

44. Recent Legislation • Budget Control Act (BCA) of 2011 (August 2, 2011) • Sequestration enacted on March 1, 2013, when Super Committee failed to reach an agreement • Consolidated Appropriations Act (CAA) of 2012 (December 23, 2011) • Moving Ahead for Progress in the 21st Century Act (MAP‐21) (July 6, 2012) • Introduced 150% rule for Subsidized Stafford Loans • American Taxpayer Relief Act (ATRA) of 2012 (January 2, 2013) • Bipartisan Student Loan Certainty Act of 2013 (August 9, 2013) • Interest rates on Direct loans recalculated annually

45. Political Climate • What’s the takeaway? • Student aid is caught up in a much larger political dysfunction & ideological impasse. • Reauthorization will coincide with the 2014 election year, so we can expect extra scrutiny will be given to student loans/debt as well as to the rising costs of education. • Next showdown is in February as another debt ceiling looms. 45

46. Federal Aid Programs, 2014-2015

47. Sequestration • Federal Loan Fees • Subsidized and Unsubsidized loans with a first disbursement made on or after December 1, 2013 - loan fee increased to 1.072% from 1.051%. • Example: On a $5,500 loan, the fee would adjust from $57.80 to $58.96. • PLUS loans with a first disbursement made on or after December 1, 2013 – loan fee increased to 4.288% from 4.204%. • Example: On a $10,000 loan, the fee would adjust from $420.40 to $428.80.

48. TEACH, 2014-2015

49. Federal Pell Grant, 2014-2015 • Maximum award amount increases slightly for 2014-2015 • $5,785 maximum award for full-time enrollment and an Expected Family Contribution (EFC) of zero. • Maximum Expected Family Contribution (EFC) for Pell eligibility has been lowered to 4995 for 2013-2014. • It has not yet been established for 2014-2015.

50. Federal Pell Grant, 2014-2015 • Students now have a maximum number of terms they can receive Pell Grant • 600% of an annual award amount • The equivalent of 12 full-time semesters