1 / 47

Budgets, Policies, and NegRegs

Budgets, Policies, and NegRegs. NYSFAAA Government Relations Committee March 2007. New York State Governor’s Budget. No TAP increases Cutting Ability-to-Benefit would affect 8,000. $100 increase per student at community colleges. Reduce Bundy Aid by $4.2 million.

jenski
Download Presentation

Budgets, Policies, and NegRegs

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Budgets, Policies, and NegRegs NYSFAAA Government Relations Committee March 2007

  2. New York State Governor’s Budget • No TAP increases • Cutting Ability-to-Benefit would affect 8,000. • $100 increase per student at community colleges. • Reduce Bundy Aid by $4.2 million. • Reduces the subsidy to teaching hospitals for medical residents.

  3. New York State Senate Budget Proposals • TAP • Increase family income eligibility cap for minimum award from $80,000 NTI to $100,000. • Raise the minimum award from $500 to $1000. • Increase independent income cap from $10,000 NTI to $12,500. • Adjust the TAP award schedule accordingly.

  4. NYS – SenateTuition Tax Credits • Would expand tuition tax credits from maximum of $400 to $700. • Figured at 5% of tuition paid up to $14,000 • Student Loan Debt Relief Program • Tax credit for graduates of NYS colleges up to $1,000 per year. • Must be an employed NYS resident • Must be earning less than $50,000 per year • Can claim for up to 5 years

  5. NYS – SenateMath/Science/Eng. Retention • 1,000 grants per year of $1,000 each to • NYS residents with undergrad. or grad. Degrees in math, science, or engineering technology • Degree awarded in 2007-08 academic year or later • Employed in any science, engineering or technology field (but not teaching) • Can be claimed up to 5 years. • 1,000 new awards per year until reaching 5,000

  6. NYS – SenateMath and Science Teaching Incentive Program • Expands this existing program from 500 awards to 750 annually. • Provides grants equal to SUNY tuition for students enrolled in approved teacher certification programs. • Must agree to teach math or science in NYS for five years

  7. NYS – SenateVeterans • Would increase the maximum tuition assistance grant to veterans of the Vietnam, Persian Gulf, Afghanistan, or Iraq Wars from $2,000 to the amount of SUNY tuition (currently $4,350).

  8. NYS – SenateIndependent Colleges • Would restore $3.78 million for Bundy Aid that the Governor’s budget cut.

  9. NYS Assembly Budget Proposal • No TAP enrichment • $62.38 million more than Spitzer’s budget for: • $15 million for SUNY operating aid • $10 million for CUNY operation aid • 5% increases in EOP, HEOP, SEEK, College Discovery, Liberty Partnerships

  10. NYS Assembly • Also • $10 million for EOCs • And to help prevent tuition or property tax hikes at the local level • $8.16 million for SUNY community colleges • $3 million for CUNY community colleges • And Capital Improvements • $75.9 million for SUNY • $30 million for CUNY

  11. FEDERAL A Continuing Resolution for current-year (FY2007-08) spending • The 109th Congress failed to complete this budget work, allowing the Democratic majority now in power to change the original plan. • Called a Joint Funding Resolution, it was crafted by leading Democrats in both the House and Senate, with little input from others. • Already passed by House, it requires Senate to pass it, and Bush to sign it.

  12. Fed.– Continuing ResolutionFound Money? • They shifted $2.3 billion from “earmarks,” military base closings, and other areas. • Earmarks often go to colleges • $1 Billion went to Pell Grants • $620 million to biomedical research at the Nat’l. Insts. Of Health • Also funds to Nat’l Science Found. And the Energy Department’s Office of Science

  13. Fed.– Continuing ResolutionPell Grants • Increase by $260 for 2007-08 • Maximum Grant would be $4,310

  14. Federal President’s Budget • $2.9 Trillion ($9,667 for every resident) • Pell Grant maximum of $4,600 for 2008-09 • The $550 increase would cost $2 billion • Rise in $200 increments to $5,400 in FY 2012

  15. Fed.– President’s BudgetPell/ Need Analysis • Pell Grants available year-round at 2 and 4-year schools • Limit eligibility to the equivalent of 16 semesters to encourage graduation • Eliminate the tuition sensitivity rule that penalizes students at low cost schools • Exclude from Needs Analysis all savings in 529 plans

  16. Fed.– President’s BudgetACG/SMART • 1st year ACG increase from $750 to $1,125 for FY 2008 • 2nd year from $1,300 to $1,950 for 2008 • Only $140 million of the $790 million available for this year has been awarded • Modest increase in SMART Grants

  17. Fed.– President’s BudgetLoans • $2,000 increase, to $7,500, in maximum Stafford for 3rd and 4th years • An increase in aggregate borrowing is presumed, but not clear • PLUS interest to be reset at 8.3% for both DL and FFEL

  18. Fed.– President’s BudgetAt What Cost? • Eliminate SEOG • High admin. Cost – 250 times cost of Pell • Dollars don’t always go to schools serving the neediest, nor to the neediest at the schools • Eliminate LEAP, Byrd Honors Scholarships, Thurgood Marshall Legal Education Opportunity Program • No new FCC to Perkins Loans, and recall all Federal capital from schools

  19. Fed.– President’s BudgetLender and Guarantor Cuts • Reduce lender subsidy above current commercial paper rates from 2.34 to 1.84% • Increase fee to make a consolidation loan by .5% of the amount of the loan • Guarantors reimbursed for 95% of a defaulted loan, down from 97% • Decrease guarantor default collection payments, and changes the way account maintenance fees are calculated. • Total saved = $19 Billion over 5 years

  20. Fed.– President’s BudgetPolicy Items • $25 million “for a voluntary pilot initiative that will collect and analyze student data to measure outcomes such as graduation rates. This initiative will help ensure accountability and transparency in higher education.” • $24 million for a new grant program to increase the number of speakers of “critical languages” • Intends to implement ED and IRS program to verify income and taxes.

  21. Senate Democrats FY08 Budget Resolution • Just introduced • Contains $6.1 billion more than the Presidents Budget for the Education Department • Does not spell out spending levels for individual programs, but sets ceilings for broad categories.

  22. COLLEGE AID MADE EZ ACT • Introduced in House by Miller (D-CA), Chair of House Education and Labor Committee, and Emanuel (D-IL); similar bill introduced in Senate by Kennedy (D-MA) • Reduces FAFSA from 5 pages to 2 • Provides a “Pre-FAFSA” as a forecast tool for H.S. juniors (similar to FAFSA4Caster from ED, available April 1) • Hinges on IRS supplying the income data from tax returns

  23. Federal Kennedy’s Student Debt Relief Act • Not really a budget bill, but has major cost considerations. • Would increase Pell Maximum to $5,100 for 2007-08. • $300 increases each year to a maximum of $6,300 in 2011-12. • Would make funding an entitlement.

  24. Fed.– Debt Relief ActStudent Loan Interest • Would match HR5, passed by the House, by cutting interest rates on subsidized, undergraduate student loans to 3.4% by 2011-12.

  25. Fed.– Student Debt Relief ActStudent Aid Reward Program (STAR) • Encourages colleges to utilize the student loan program that is “most cost-effective for taxpayers.” • 50% of the savings shared with the colleges after 5 years participation. • Could supplement awards to Pell Grant recipients, or make grants to low-or-middle income graduate students.

  26. Fed.– Student Debt Relief ActOther Loan Reforms • Direct Lending origination fees become optional at the discretion of the Secretary of Education. • DL fees would be reduced another 1% during the current phase-out period. • Corresponds to the 1% Default Fee charged to FFELP borrowers • In-School consolidation resurrected. • Reconsolidation would become possible.

  27. Fed.– Student Debt Relief ActHardships • Partial Financial Hardship deferment category created • Would limit monthly payments to 15% of borrower’s income that exceeds 150% of poverty for their family size. • Would allow unlimited length of hardship deferments. • Would cancel any remaining debt after 25 years of being in a hardship or partial hardship category.

  28. Fed.– Student Debt Relief ActIncome Tax Deduction • Would increase the income tax tuition deduction from $4,000 to $8,000 in 2007 • To $12,000 in 2008 • Income limits to qualify would be increased based on inflation. • Tax deductions for interest paid would become credits. • Qualifying income tied to inflation

  29. NEG/REGs ACG/SMART Grants

  30. NegRegs: Modify Definition of Academic Year to be Consistent with how Institutions Measure Progress? • ED says it can’t, as the term has a long-standing definition based on credits (or clock hours) and weeks.

  31. NegRegs: Mandatory Participation • All Pell-eligible schools must participate in the ACG/SMART programs • In cases of ‘visiting’ status, the school that pays Pell must also pay ACG/SMART grants

  32. NegRegs: Eligible Program • Certificate programs will continue to be ineligible for ACG/SMART

  33. NegRegs: Eligible Majors • Set up a procedure for schools to petition for additional eligible majors; • Set up procedure to validate a students intent to declare a major that is eligible at schools where students don’t have to declare majors until after start of the junior year.

  34. NegRegs: Unresolved Areas • Treatment of credit earned through AP/IB, and credit earned in H.S. through dual-credit and early college programs • These issues related to academic year progression and GPA calculation

  35. NegRegs: Loan Issues • Preferred lists OK if • Student is not prevented from choosing any lender • Contains at least 3 lenders • Does not contain any lender that has offered – or that has been solicited to offer by a school – any financial or other benefit to be part of the list

  36. NegRegs: Prohibited Inducements • Payments or offerings of any kind – including prizes to the prospective borrower in exchange for a loan application • Payments or offerings of any kind to a school, or any school-affiliated organization in exchange for loan applications • Payments to any student acting as a lender’s representative at a school to try to secure loan applications

  37. More Prohibited Inducements • Payment of referral or processing fees to another lender that exceeds “reasonable compensation for the handling and marketing of FFEL loans” by the processing lender that are based on the volume or dollar amount of originated FFEL loans

  38. More Prohibited Inducements • Payment of entertainment expenses for employees at a school or any school-affiliated organization, including: • Private hospitality suites • Tickets to show or sporting events • Meals or alcoholic beverages • Lodging, rentals, transportation or any other expense related to lender-sponsored social activities • The undertaking of any philanthropic activities such as scholarships in exchange for applications or to be placed on a preferred lender list • Preferential rates to other lender products • Computer hardware or software • Printing or distribution of college materials

  39. NegRegs: Approved Activities • Assistance to schools comparable to that provided by ED to schools in DL • Temporary, emergency staffing services to a school • Support of a guarantor agency’s college access and outreach activities • Meals, and receptions that are scheduled in conjunction with open meetings or conferences • Toll free phone numbers for use by schools

  40. More Approved Activities • Borrower benefits such as origination fees, reduced interest rate, or benefits that require one or more scheduled payments • Payment of a default fee by guarantors • Reasonable travel and lodging costs – by guarantors only – to facilitate school staff training, guarantor service facility tours, or for schools to participate in the activities of an agency’s governing board, etc. • Items of nominal value that are given as tokens of good will

  41. NegRegs: GradPLUS Entrance Counseling • If a student doesn’t request their maximum Stafford loan, the school must provide a comparison that shows: • The maximum interest rates in both programs • The different interest accrual rates • The different repayment start dates • All GradPLUS borrowers must get entrance counseling in the same manner as Stafford Loan Borrowers

  42. NegRegs: Length of a Loan Period • Institutions will be allowed to certify a single loan for students in non-term or nonstandard term programs in excess of 12 months. • You would still use the definition of an academic year as defined in 34 CFR 668.3, but would no longer need to worry about exceeding a 12-month period.

  43. NegRegs: Other Areas of Regulation • Frequency of Capitalization – only at the end of a deferment/forbearance period • Simplification of Deferment Granting Process – you can grant a deferment if another FFEL lender or ED has granted a deferment for the same reason, for the same time period, unless you have conflicting information. This is simple?

  44. House Committee asks for Help “We invite you to share with us your best ideas……….”

  45. HigherEdRecs@mail.house.gov • Increasing college access and success • Improving the financial aid delivery system • Improving academic, financial, and social college preparation for students • Improving programs designed to distribute and leverage need-based student aid • Address increasing college costs • Increasing transparency of college costs and the accreditation process

  46. ACG/SMART Grant Training A Series of ED Workshops

  47. http://www.ed.gov/offices/OSFAP/training/index.html • April 18 – Hartford, CT • May 8 – NYC • May 10 – Newark, NJ • May 15 - Boston • May 16 – Syracuse • June 19 – Randolph Center, VT

More Related