Regulatory Perils for Graduate and Professional Students

1. Regulatory Perils for Graduate and Professional Students David Garza Policy Advisor TG Policy and Regulatory Affairs david.garza@tgslc.org Thank you for the wonderful introduction; my name is David Garza and I�m a policy advisor with TG; I am co-presenting today with Margery Harvey who is the vice-president for strategic partnerships. Together we will be discussing the regulatory perils that graduate and professional students encounter. Just to give you some background; the NASFAA�s Graduate and Professional Issues Committee identifies important topics that graduate and professional aid administrators face; they identified a few and asked that we explore these with you. We believe that engaging in a dialogue is most appropriate because it will allow all of us to see how FAA�s are addressing these issues. Part of our job will be to lay out the law and the regulations; and look at how schools are handling these issues from an operational perspective. We look forward to an engaging discussion and with that said let�s look at the topics we will be discussing.Thank you for the wonderful introduction; my name is David Garza and I�m a policy advisor with TG; I am co-presenting today with Margery Harvey who is the vice-president for strategic partnerships. Together we will be discussing the regulatory perils that graduate and professional students encounter. Just to give you some background; the NASFAA�s Graduate and Professional Issues Committee identifies important topics that graduate and professional aid administrators face; they identified a few and asked that we explore these with you. We believe that engaging in a dialogue is most appropriate because it will allow all of us to see how FAA�s are addressing these issues. Part of our job will be to lay out the law and the regulations; and look at how schools are handling these issues from an operational perspective. We look forward to an engaging discussion and with that said let�s look at the topics we will be discussing.

2. Topics Construction of the cost of attendance for the nontraditional student Guidelines surrounding the determination of resources Safeguards Rule under Gramm-Leach-Bliley Act (GLB) We will be looking at three issues: Construction of cost of attendance for non-traditional students. FAA�s had some questions about the construction of Cost of Attendance for non-traditional students. We will explore COA, give an example of the non-traditional student, discuss some scenarios that FAA�s may have encountered. Effects of graduate resources on the financial aid package we will define different types of resources that affect financial need. We will then specifically look at the issue of fellowships and discuss how various FAA�s account for them when determining financial need. Safeguards rule under GLB We will talk about the Safeguards rule under the Gramm-Leach Bliley act; you don�t have to be a lawyer to have a discussion about these rules. Discussion of the Rule will set the stage for a high level- discussion on the issue of privacy and best practices in handling the social security number. We will be looking at three issues: Construction of cost of attendance for non-traditional students. FAA�s had some questions about the construction of Cost of Attendance for non-traditional students. We will explore COA, give an example of the non-traditional student, discuss some scenarios that FAA�s may have encountered. Effects of graduate resources on the financial aid package we will define different types of resources that affect financial need. We will then specifically look at the issue of fellowships and discuss how various FAA�s account for them when determining financial need. Safeguards rule under GLB We will talk about the Safeguards rule under the Gramm-Leach Bliley act; you don�t have to be a lawyer to have a discussion about these rules. Discussion of the Rule will set the stage for a high level- discussion on the issue of privacy and best practices in handling the social security number.

3. Cost of attendance Discuss with audience their view on what a non-traditional student is.Discuss with audience their view on what a non-traditional student is.

4. Trivia question What section of the Higher Education Act addresses Cost of Attendance? A) 428 B) 472 C) 466 D) All of the above E) None of the above I like to think that with the complexities in the administration of Title IV that at some point we are a student of financial aid. With that said, during the course of our discussion; we will be giving you some fun little quizzes for some door prizes that our moderator will be handing out. With that said here is the first question: What section of the Higher Education Act deals with Cost of Attendance? 428 472 466 All of the above None of the above Answer is B�. I like to think that with the complexities in the administration of Title IV that at some point we are a student of financial aid. With that said, during the course of our discussion; we will be giving you some fun little quizzes for some door prizes that our moderator will be handing out. With that said here is the first question: What section of the Higher Education Act deals with Cost of Attendance? 428 472 466 All of the above None of the above Answer is B�.

5. Trivia question What section of the Higher Education Act addresses Cost of Attendance? A) 428 B) 472 466 All of the above None of the above Section 472 under the Higher Education Act is the section of the law that discusses cost of attendance. So let�s explore this portion of the HEA as it is necessary to know the components that are used to construct the COA especially for non-traditional students which we will investigate in further detail.Section 472 under the Higher Education Act is the section of the law that discusses cost of attendance. So let�s explore this portion of the HEA as it is necessary to know the components that are used to construct the COA especially for non-traditional students which we will investigate in further detail.

6. Cost of attendance What is cost of attendance (COA)? It is an estimate of the student�s educational expenses for the period of enrollment Ask audience for a definition of the cost of attendance Definition of COA is an estimate of the student�s education expenses for the period of enrollment. Ask audience for a definition of the cost of attendance Definition of COA is an estimate of the student�s education expenses for the period of enrollment.

7. Components of COA Tuition and fees Books and supplies Transportation Room and board Personal expenses Loan fees The HEA outlines the various components that are to be accounted for in a students cost of attendance, these components are the most common ones that make up a typical budget. Include: Tuition and fees Books & Supplies Transportation-- Personal Expenses which may include the expense for rental or purchase of a computer. Loan fees-an allowance to cover any loan fee, origination fee, or insurance premium charged to the student on a loan; or an average cost of any such fee or premium charged by ED, lender, or guarantor who makes or ensures the loan. Adding this fee is allowable for private loans; since many graduate students are now having to take out private loans to pay for educational costs at their school. As we talk about these expenses; it is important to point out that it is up to the institution to determine the amount to be allocated for each component. Many schools use average costs for all of the components in the cost of attendance. Or the institution may want to use actual costs for the components. The law does not specify whether a school should use average or actual. The HEA outlines the various components that are to be accounted for in a students cost of attendance, these components are the most common ones that make up a typical budget. Include: Tuition and fees Books & Supplies Transportation-- Personal Expenses which may include the expense for rental or purchase of a computer. Loan fees-an allowance to cover any loan fee, origination fee, or insurance premium charged to the student on a loan; or an average cost of any such fee or premium charged by ED, lender, or guarantor who makes or ensures the loan. Adding this fee is allowable for private loans; since many graduate students are now having to take out private loans to pay for educational costs at their school. As we talk about these expenses; it is important to point out that it is up to the institution to determine the amount to be allocated for each component. Many schools use average costs for all of the components in the cost of attendance. Or the institution may want to use actual costs for the components. The law does not specify whether a school should use average or actual.

8. COA may also include reasonable allowances for: Dependent care Disability related expenses Study abroad expenses Components of COA Other allowances that may included in the cost of attendance are the following: Allowance for dependent care: This is an important component because as we talk about the non-traditional student; a student with child or family could benefit with the addition of this component added to his/her budget. Estimated, actual expenses incurred Can not exceed the reasonable cost The period for which dependent care is required includes but is not limited to, class-time, study-time, field work, internships, and commuting time. For a student with a disability; the cost of attendance can include expenses related to the disability include special services, personal assistance, transportation, equipment, and other supplies that are reasonably incurred and not provided for by other assisting agencies. How does a school derive this component? Any schools like to share. Lastly, this component is taking on an increased relevance as more students are participating in study abroad programs. The COA may include an allowance for reasonable costs associated with study abroad such as: travel expenses; passport and papers�. Other allowances that may included in the cost of attendance are the following: Allowance for dependent care: This is an important component because as we talk about the non-traditional student; a student with child or family could benefit with the addition of this component added to his/her budget. Estimated, actual expenses incurred Can not exceed the reasonable cost The period for which dependent care is required includes but is not limited to, class-time, study-time, field work, internships, and commuting time. For a student with a disability; the cost of attendance can include expenses related to the disability include special services, personal assistance, transportation, equipment, and other supplies that are reasonably incurred and not provided for by other assisting agencies. How does a school derive this component? Any schools like to share. Lastly, this component is taking on an increased relevance as more students are participating in study abroad programs. The COA may include an allowance for reasonable costs associated with study abroad such as: travel expenses; passport and papers�.

9. Varying COAs COA can be unique to the program of study Examples of different graduate and professional programs MBA Medical, Nursing, Dental Law Other graduate programs It�s important to know the environment that you�re in because this will determine how the FAA handles certain issues. In thinking about graduate and professional students, most cost of attendances may be unique because of the student�s program of study. Some of the various programs that all institutions in this room offer do vary: Some schools may have one or all of the programs above at their school; Just goes to show the vast, unique programs that are offered as various schools; and all programs listed may have a unique cost of attendance associated with the program.It�s important to know the environment that you�re in because this will determine how the FAA handles certain issues. In thinking about graduate and professional students, most cost of attendances may be unique because of the student�s program of study. Some of the various programs that all institutions in this room offer do vary: Some schools may have one or all of the programs above at their school; Just goes to show the vast, unique programs that are offered as various schools; and all programs listed may have a unique cost of attendance associated with the program.

10. COA and PJ PJ can be used to adjust the COA How do schools use PJ for nontraditional students? What are the constraints of using PJ? Adjusting the cost of attendance: How often do you adjust the cost of attendance? Do you have the flexibility of adjusting it? Of course, you do have the authority to use professional judgment to adjust cost of attendance on a case-by-case basis to allow for special circumstances. It is important to note that conditions for professional judgment are ones that differentiate student from a class of students. The law doesn�t specify what documentation you must collect. You can document adjustments made in any reasonable way; such as documenting an interview with the student or obtaining a written statement from the student or other appropriate source. Quite common for an FAA to adjust COA for additional supplies. Keep in mind that schools may not use PJ to increase COA for post-enrollment activities such as fees for bar or licensing exam; moving expenses. No post enrollment activity; this is activity is post enrollment and is not required for the program nor the student to graduate�although required for student to get a job after graduation. Adjusting the cost of attendance: How often do you adjust the cost of attendance? Do you have the flexibility of adjusting it? Of course, you do have the authority to use professional judgment to adjust cost of attendance on a case-by-case basis to allow for special circumstances. It is important to note that conditions for professional judgment are ones that differentiate student from a class of students. The law doesn�t specify what documentation you must collect. You can document adjustments made in any reasonable way; such as documenting an interview with the student or obtaining a written statement from the student or other appropriate source. Quite common for an FAA to adjust COA for additional supplies. Keep in mind that schools may not use PJ to increase COA for post-enrollment activities such as fees for bar or licensing exam; moving expenses. No post enrollment activity; this is activity is post enrollment and is not required for the program nor the student to graduate�although required for student to get a job after graduation.

11. Actual vs. average costs When should an FAA use actual costs versus average costs? Advantages and disadvantages Here are some thoughts when considering the application of professional judgment. Should an FAA use actual costs versus average costs They may be more accurate; and in some cases the actual amount may be more than an average cost that was applied. This depends on institutional and individual philosophies When applying professional judgment will depend on individual FAA philosophies and more importantly what will benefit the student. Here are some thoughts when considering the application of professional judgment. Should an FAA use actual costs versus average costs They may be more accurate; and in some cases the actual amount may be more than an average cost that was applied. This depends on institutional and individual philosophies When applying professional judgment will depend on individual FAA philosophies and more importantly what will benefit the student.

12. Scenario I Karen and Mattson are a married couple. Both are going back to school to obtain a law degree and MBA degree, respectively. Both have applied for financial aid at ABC University for 2004�2005 academic year. Let�s look a scenario applicable to a non-traditional student; Non-traditional student�s may be student�s who are married, working full-time, and maintaining family�.that is the norm for graduate students. The case made deals with a married couple going back to school; I think this scenario is fairly common based on conversations and polling from various financial aid colleagues across the nation. You may be wondering well that�s great; they are going back to school; so just award them and get on with processing. Let�s look a scenario applicable to a non-traditional student; Non-traditional student�s may be student�s who are married, working full-time, and maintaining family�.that is the norm for graduate students. The case made deals with a married couple going back to school; I think this scenario is fairly common based on conversations and polling from various financial aid colleagues across the nation. You may be wondering well that�s great; they are going back to school; so just award them and get on with processing.

13. Scenario I continued Should a school reconcile budgets for married students attending the same school and adjust COA for shared room and board expenses? Why should a school reconcile such budgets? Why not? The law does not specify that budgets should be reconciled, and so the school is left to make the determination of why it should or should not do such. It�s important to point out an issue that may unique to this circumstances; do you reconcile the fact that they are married and sharing the room and board expense together. While many schools build room and board components on double occupancy; some do not. It could be interpreted by a schools that these student�s are roommates; but most schools do reconcile the room and board component for students who are married couples because of the shared expense. One answer to the question of �why� deals with the accuracy of expenses. Is it fair to give twice the full room and board component to a married couple rather than an individual student? Are there any schools in the room that reconcile? How do you reconcile the information. For student�s attending the same school; you may be able to collect this information on an institutional form that your school collects up front from the student; then these student�s may be assigned to the same financial aid advisor if your college assigns students an individual advisor. Again this is interpretational. You would have to examine the issue is this is appropriate to do. Many schools construct budgets for each individual student. Would a school consider adjusting the room and board component for students who are married but attending different institutions? Why or why not? Depends on the packaging and awarding philosophy of the school. Why should a school reconcile such budgets? Why not? The law does not specify that budgets should be reconciled, and so the school is left to make the determination of why it should or should not do such. It�s important to point out an issue that may unique to this circumstances; do you reconcile the fact that they are married and sharing the room and board expense together. While many schools build room and board components on double occupancy; some do not. It could be interpreted by a schools that these student�s are roommates; but most schools do reconcile the room and board component for students who are married couples because of the shared expense. One answer to the question of �why� deals with the accuracy of expenses. Is it fair to give twice the full room and board component to a married couple rather than an individual student? Are there any schools in the room that reconcile? How do you reconcile the information. For student�s attending the same school; you may be able to collect this information on an institutional form that your school collects up front from the student; then these student�s may be assigned to the same financial aid advisor if your college assigns students an individual advisor. Again this is interpretational. You would have to examine the issue is this is appropriate to do. Many schools construct budgets for each individual student. Would a school consider adjusting the room and board component for students who are married but attending different institutions? Why or why not? Depends on the packaging and awarding philosophy of the school.

14. Scenario II Nathan is attending 2 institutions because he is completing multiple programs of study (MBA and Law). How do you decide which school has the responsibility to contact the other? How would the school adjust the COA? CASE: student is taking 6 hrs thru school that offers program via distance education & 6 hrs other school. �Room Board/transportation/personal expensesHow do you decide which school has the responsibility to contact the other? How would the school adjust the COA? CASE: student is taking 6 hrs thru school that offers program via distance education & 6 hrs other school. �Room Board/transportation/personal expenses

15. Scenario II continued Can the student receive funds at each school? How would a school monitor loan limits and adjust COA?

16. Resources

17. Trivia question Which of the following section(s) of the regulations discusses resources? �673.5 �682.200(b) �685.102(b) None of the above All of the above So moving forward, we will continue moving forward with our next issue surrounding resources/estimated financial assistance. To lead the way, what section or sections of the regulations deal with resources/estimated financial assistance. The answer is E�So moving forward, we will continue moving forward with our next issue surrounding resources/estimated financial assistance. To lead the way, what section or sections of the regulations deal with resources/estimated financial assistance. The answer is E�

18. Trivia question Which of the following section(s) of the regulations discusses resources? �673.5 �682.200(b) �685.102(b) None of the above All of the above That�s right it�s E for all of the above. Sections 682.200(b) and 685.102(b) of the regulations deal with estimated financial assistance as affecting FFELP and Direct Loans. 673.5 deals with resources which are also estimated financial assistance. Let�s explore some of the various resources that are applicable to our discussion. That�s right it�s E for all of the above. Sections 682.200(b) and 685.102(b) of the regulations deal with estimated financial assistance as affecting FFELP and Direct Loans. 673.5 deals with resources which are also estimated financial assistance. Let�s explore some of the various resources that are applicable to our discussion.

19. Resources Title IV aid Net earnings from need- based employment State and institutional aid ROTC allowances Scholarships Tuition and fee waivers Fellowships or assistantships Veterans educational benefits National Service education awards Insurance programs for student�s education These are the various types of resources that FAA administrators commonly work with. Title IV Aid Net earning from need based employment State/Institutional Aid ROTC allowances Scholarships Tuition/fee waivers Fellowships/assistantships Veterans educational benefits National Service awards Insurance programs for student�s educationThese are the various types of resources that FAA administrators commonly work with. Title IV Aid Net earning from need based employment State/Institutional Aid ROTC allowances Scholarships Tuition/fee waivers Fellowships/assistantships Veterans educational benefits National Service awards Insurance programs for student�s education

20. Not resources Resources from the previous screen that are used to calculate an EFC Earnings from non-need-based employment Certain veterans� educational benefits and AmeriCorps for determining Subsidized Stafford eligibility Now these are not considered a resource�. Resources from the previous screen that are used to calculate an EFC--- Keep in mind that when a student files taxes; they can exclude fellowships from the EFC calculation by writing in the amount of the funds in the worksheets. Thus, it would then be counted as a resource this would mean that they were reported as wages; agi or on the worksheets/assets�. Earning from FWS employment� those are excluded from Worksheet C of the FAFSA. Veteran�s Benefits and Americorps amounts when determining subsidized stafford. Graduate/professional aid administrator commonly deal with fellowships which was identified as an issue by NASFAA�s Graduate and Professional Issues committee. So let�s discuss fellowships as a resource in more detail. Now these are not considered a resource�. Resources from the previous screen that are used to calculate an EFC--- Keep in mind that when a student files taxes; they can exclude fellowships from the EFC calculation by writing in the amount of the funds in the worksheets. Thus, it would then be counted as a resource this would mean that they were reported as wages; agi or on the worksheets/assets�. Earning from FWS employment� those are excluded from Worksheet C of the FAFSA. Veteran�s Benefits and Americorps amounts when determining subsidized stafford. Graduate/professional aid administrator commonly deal with fellowships which was identified as an issue by NASFAA�s Graduate and Professional Issues committee. So let�s discuss fellowships as a resource in more detail.

21. Fellowships Help students pursue studies or some form of research Have benefits of all shapes and sizes May or may not be taxable From research and discussion amongst schools that I have worked with; The treatment of fellowships can and is one of the most tedious of FAA�s because they: Have benefits of all shapes and sizes: interestingly; they range from amounts of 1,000 to sky�s the limit; one fellowship that comes to mind is the National Science Foundation Graduate Fellowship that is for $30,000. Incidentally, it is common for student�s to ask about taxability; while it is not an issue that we will be covering, we did include the criteria for taxability in your handout IRS resource publication 970�it goes hand in hand with the NASFAA and ED dialogue about FAA�s being a tax expert. Here is the criteria to measure taxability; this is important because depending on the fellowship; it may all be taxable. If it is taxable, the recipient would be required to file this fellowship as taxable income on the IRS 1040 Individual Tax return. Fellowship payment (all or a portion) may be tax-free if: the recipient is a candidate for a degree at the school and the fellowship income was paid toward tuition/fees, books, supplies, and equipment for courses. So for example, If a student has a 30,000 fellowship; and he pay�s 20,000 towards tuition/fees, books and supplies; this is the portion that would be tax free. Taxability of an award does not determine whether or not it is treated as a resource or estimated financial assistance (EFA). From research and discussion amongst schools that I have worked with; The treatment of fellowships can and is one of the most tedious of FAA�s because they: Have benefits of all shapes and sizes: interestingly; they range from amounts of 1,000 to sky�s the limit; one fellowship that comes to mind is the National Science Foundation Graduate Fellowship that is for $30,000. Incidentally, it is common for student�s to ask about taxability; while it is not an issue that we will be covering, we did include the criteria for taxability in your handout IRS resource publication 970�it goes hand in hand with the NASFAA and ED dialogue about FAA�s being a tax expert. Here is the criteria to measure taxability; this is important because depending on the fellowship; it may all be taxable. If it is taxable, the recipient would be required to file this fellowship as taxable income on the IRS 1040 Individual Tax return. Fellowship payment (all or a portion) may be tax-free if: the recipient is a candidate for a degree at the school and the fellowship income was paid toward tuition/fees, books, supplies, and equipment for courses. So for example, If a student has a 30,000 fellowship; and he pay�s 20,000 towards tuition/fees, books and supplies; this is the portion that would be tax free. Taxability of an award does not determine whether or not it is treated as a resource or estimated financial assistance (EFA).

22. Fellowships What are the guidelines for considering whether or not a fellowship is a resource? If a student receives a form of assistance because he or she is enrolled in postsecondary education, or the assistance is to pay for postsecondary education expenses, then you must determine how it should be treated in the financial aid package If an award is considered employment according to federal or state guidelines, it must be treated as employment when determining eligibility for Title IV aid. Federal and State employment rules are independent of student aid rules. Generally, employment rules entail issues such as withholding, Social Security Administration program participation, worker�s compensation, and unemployment insurance eligibility; FICA�ssn; FUTA�unemployment. Determination of whether or not funds are based on employment. If a student receives a form of assistance because he or she is enrolled in postsecondary education, or the assistance is to pay for postsecondary education expenses, then you must determine how it should be treated in the financial aid package If an award is considered employment according to federal or state guidelines, it must be treated as employment when determining eligibility for Title IV aid. Federal and State employment rules are independent of student aid rules. Generally, employment rules entail issues such as withholding, Social Security Administration program participation, worker�s compensation, and unemployment insurance eligibility; FICA�ssn; FUTA�unemployment. Determination of whether or not funds are based on employment.

23. Guidelines for fellowships Award is a resource if it is: Need-based employment or, Not employment Award is not a resource if it is: Non-need-based employment Award is resource if it is need-based employment or not employment If award (that was a resource) was included in a student�s AGI, then it would be listed on FAFSA Worksheet C as exclusion from the EFC calculation. Award is not a resource if it is non-need-based employment Award (that is not a resource) is income that should be in AGI on the student�s next financial aid application will be used in the EFC calculation (no exclusion). It�s just a job. -Need-based: demonstrates financial need -Non-need-based: merit, race/ethnicity, state of residence, or other category other than financial need. Another approach: Is award employment? No� it�s a resource�. Is award employment? Yes. Is it need-based or non-need-based? If need-based it�s a resource; if non-need based, it�s not a resource.Award is resource if it is need-based employment or not employment If award (that was a resource) was included in a student�s AGI, then it would be listed on FAFSA Worksheet C as exclusion from the EFC calculation. Award is not a resource if it is non-need-based employment Award (that is not a resource) is income that should be in AGI on the student�s next financial aid application will be used in the EFC calculation (no exclusion). It�s just a job. -Need-based: demonstrates financial need -Non-need-based: merit, race/ethnicity, state of residence, or other category other than financial need. Another approach: Is award employment? No� it�s a resource�. Is award employment? Yes. Is it need-based or non-need-based? If need-based it�s a resource; if non-need based, it�s not a resource.

24. Scenario Graduate student receives: $30,000 fellowship $25,000 stipend for conducting research $5,000 tuition waiver with no stipulations $10,000 summer assistantship $10000 summer assistantship�. Awarded on the condition that the student teach during the summer The school has determined, according to federal and state rules, that the stipend is employment $10000 summer assistantship�. Awarded on the condition that the student teach during the summer The school has determined, according to federal and state rules, that the stipend is employment

25. Scenario continued $30,000 fellowship Is it a resource? School determines (based on federal and state rules) no part of fellowship (neither the $25,000 stipend nor the $5,000 tuition waiver) is considered employment Yes, it is not employment. -Portion reported as income (stipend) on tax return next year listed as exclusion from EFC calculation by using Worksheet C of the subsequent year�s FAFSA School determines (based on federal and state rules) no part of fellowship (neither the $25,000 stipend nor the $5,000 tuition waiver) is considered employment Yes, it is not employment. -Portion reported as income (stipend) on tax return next year listed as exclusion from EFC calculation by using Worksheet C of the subsequent year�s FAFSA

26. Scenario continued $10,000 summer assistantship Is it a resource? This amount should not be reported on Worksheet C, because the award was not included as a resource and EFA No, it is considered non-need-based employment This amount should not be reported on Worksheet C, because the award was not included as a resource and EFA No, it is considered non-need-based employment

27. Best practices Design and review policies in place on how to handle resources Communicate with organization providing the fellowship funds Contact student if questions arise When it comes to fellowships, it was also important to note that the school have clear institutional policies on how to handle all resources especially when training new financial aid administrators. Policies entail understanding the source of the funds. Some best practices that have come from such policies is: Understanding the source of funds. Helping other students become aware of funds; its almost a resource page. Helped schools become aware of the availability of such funds. Clear policies helped the students when it came to determining whether or not a fellowship needed to be counted as a resource. Does any school have a policy in place that discusses how they handle fellowships. Is this policy available for students; How are students notified of the affects of a fellowship on their financial aid (albeit loans). When it comes to fellowships, it was also important to note that the school have clear institutional policies on how to handle all resources especially when training new financial aid administrators. Policies entail understanding the source of the funds. Some best practices that have come from such policies is: Understanding the source of funds. Helping other students become aware of funds; its almost a resource page. Helped schools become aware of the availability of such funds. Clear policies helped the students when it came to determining whether or not a fellowship needed to be counted as a resource. Does any school have a policy in place that discusses how they handle fellowships. Is this policy available for students; How are students notified of the affects of a fellowship on their financial aid (albeit loans).

28. Gramm-Leach-Bliley Act (GLB)

29. GLB What is it? How does it affect my institution? How does it affect my students? Talk about what it is--- How does it affect my institution? And more importantly how does it affect my student population.Talk about what it is--- How does it affect my institution? And more importantly how does it affect my student population.

30. Trivia question Which of the following regulations covers GLB standards for safeguarding customer information? 16 CFR 314 16 CFR 315 16 CFR 316 None of the above

31. Trivia question Which of the following regulations covers GLB standards for safeguarding customer information? 16 CFR 314 16 CFR 315 16 CFR 316 None of the above

32. Nuts and bolts of GLB Gramm-Leach-Bliley Financial Modernization Act of 1999 Two main components Privacy Rule Safeguards Rule Here is another fun disclaimer; I�m not a lawyer. What does that mean; it means I�m not here to give you legal advise; that is for your general counsel who gets paid millions of dollars to do. GLB was born in 1999; this law has 2 components: A Privacy rule & a safeguards rule. We will give a synposis of these rules as we move forward in the presentation.Here is another fun disclaimer; I�m not a lawyer. What does that mean; it means I�m not here to give you legal advise; that is for your general counsel who gets paid millions of dollars to do. GLB was born in 1999; this law has 2 components: A Privacy rule & a safeguards rule. We will give a synposis of these rules as we move forward in the presentation.

33. GLB components Privacy Rule: Addresses privacy notices, opt out rights and limits on use and disclosure. Institutions of higher education should be in compliance with this part of the rule if they are in compliance with FERPA Safeguards Rule: Requires financial institutions to have a security plan to protect the confidentiality and integrity of personal consumer information The privacy rule addresses general privacy notices; it was noted during the implementation of this rule that higher education institutions were in compliance with this rule if they were in compliance with FERPA because of the privacy. However, the other portion of the rule was the safeguard; which actually requires financial institutions to have a security plan to protect the confidentiality and integrity of personal consumer information. School compliance with FERPA is not compliance for this part of the rule. Institutions must adopt an information security program by 5/23/03. The privacy rule addresses general privacy notices; it was noted during the implementation of this rule that higher education institutions were in compliance with this rule if they were in compliance with FERPA because of the privacy. However, the other portion of the rule was the safeguard; which actually requires financial institutions to have a security plan to protect the confidentiality and integrity of personal consumer information. School compliance with FERPA is not compliance for this part of the rule. Institutions must adopt an information security program by 5/23/03.

34. Safeguards Rule Why would a school be considered a �financial institution?� The FTC considers certain activities covered under the Safeguards Rule: Administration of educational loans Extension of credit and interest charged So the big question that came about was simple; the rule said �financial institution? Why is a school considered a financial institution. After industry discussions with the FTC that took place; it was determined that certain activities that a school does are covered under the safeguards rule. -Administration of educational loans -extension of credit and interest charged by a schools accounting/bursars office -credit card transactions. These are specific examples; safeguard rules are not limited too.. So the big question that came about was simple; the rule said �financial institution? Why is a school considered a financial institution. After industry discussions with the FTC that took place; it was determined that certain activities that a school does are covered under the safeguards rule. -Administration of educational loans -extension of credit and interest charged by a schools accounting/bursars office -credit card transactions. These are specific examples; safeguard rules are not limited too..

35. Safeguards Rule The security plan must: Contain administrative, technical, and physical safeguards appropriate to: Size and complexity of the financial institution Nature and scope of activities Sensitivity of customer information In response to the safeguards rules; schools had to develop a security plans that contained administrative, technical, and physical safeguards appropriate to: Size and complexity of the financial institution Nature and scope of activities And sensitivity of customer information. Institutions I spoke with created some type of committee of cross campus individuals who helped to develop a security plan which hey had to do based on the final rules re: safeguards which took effect May 23, 2003. This is an overview of the safeguards rules; but I think that they give us the opportunity to look at the larger issue of privacy because; the GLB gave schools and other FFELP participants the opportunity to look at privacy overall which gets to the heart of privacy. I think this section is very important to remember not only with graduate populations but with all students because of the challenges we face with protecting sensitive information. In response to the safeguards rules; schools had to develop a security plans that contained administrative, technical, and physical safeguards appropriate to: Size and complexity of the financial institution Nature and scope of activities And sensitivity of customer information. Institutions I spoke with created some type of committee of cross campus individuals who helped to develop a security plan which hey had to do based on the final rules re: safeguards which took effect May 23, 2003. This is an overview of the safeguards rules; but I think that they give us the opportunity to look at the larger issue of privacy because; the GLB gave schools and other FFELP participants the opportunity to look at privacy overall which gets to the heart of privacy. I think this section is very important to remember not only with graduate populations but with all students because of the challenges we face with protecting sensitive information.

36. Security plans National Association of College and University Business Officers (NACUBO) www.nacubo.org Background information Various models of security plans by schools Online GLB resources

37. Safeguarding Why is safeguarding information important? Protection of non-public information Federal and state legislation Identity theft In 2003, 42% (or 214,905) of the over 500,000 complaints received by the FTC related to identity theft Most common ID theft complaint � credit card fraud (33%) followed by phone/utilities fraud (21%) Highest per capita rates of ID theft by state � Arizona, Nevada, California, Texas (over 20,600 victims) Houston ranks #5 and Dallas #6 nationwide (TX) In 2003, 42% (or 214,905) of the over 500,000 complaints received by the FTC related to identity theft Most common ID theft complaint � credit card fraud (33%) followed by phone/utilities fraud (21%) Highest per capita rates of ID theft by state � Arizona, Nevada, California, Texas (over 20,600 victims) Houston ranks #5 and Dallas #6 nationwide (TX)

38. Statistics on identity theft What are the top three categories of complaints that the Federal Trade Commission receives? Identity theft Internet auctions Shop-at-home and catalog sales Here are some interesting statistics that the FTC publish re: top three complaint categories; what do you think they were? Identity theft Federal Trade Commission received 516,740 complaints for 2003. 42% identity theft 58% fraud Internet auctions Shop at home and catalog sales.. As we continue to built electronic mechanisms for our students to use, we have to be aware of identity theft as an issue�.How many complaints to you think the FTC received on consumer fraud and identity theft for 2003. Out of 516740 complaints, 42% of them were identity theft. While consumers/students are responsible for protecting their information; as FAA�s we are also responsible for protecting their information; one piece of data that a part of everyone in this room; and is vital to FAA�s is the SSN; here are some questions that we need to ask about the SSN because they will help use develop best practices to follow. Here are some interesting statistics that the FTC publish re: top three complaint categories; what do you think they were? Identity theft Federal Trade Commission received 516,740 complaints for 2003. 42% identity theft 58% fraud Internet auctions Shop at home and catalog sales.. As we continue to built electronic mechanisms for our students to use, we have to be aware of identity theft as an issue�.How many complaints to you think the FTC received on consumer fraud and identity theft for 2003. Out of 516740 complaints, 42% of them were identity theft. While consumers/students are responsible for protecting their information; as FAA�s we are also responsible for protecting their information; one piece of data that a part of everyone in this room; and is vital to FAA�s is the SSN; here are some questions that we need to ask about the SSN because they will help use develop best practices to follow.

39. Issues surrounding the SSN The Social Security Number � Why is it needed? How will it be used? How is it protected? What will happen if a student does not provide it? Why is it needed? To identify individuals How is used? Need it for the FAFSA; loan applications; to pull up a student�s file; organize my student files etc� How is it protected from being stolen? And What will happen if a student doesn�t give it to me? (I�m sure we could say that�s just tough cookies as my mother says to me; but I think with the intent of protecting the SSN; we need to explore some of the best practices that are being used to protect the SSN. Interestingly, graduate students tend to be the most vocal when it comes to providing this information. Why is it needed? To identify individuals How is used? Need it for the FAFSA; loan applications; to pull up a student�s file; organize my student files etc� How is it protected from being stolen? And What will happen if a student doesn�t give it to me? (I�m sure we could say that�s just tough cookies as my mother says to me; but I think with the intent of protecting the SSN; we need to explore some of the best practices that are being used to protect the SSN. Interestingly, graduate students tend to be the most vocal when it comes to providing this information.

40. Making the changes - best practices Remove SSN from all correspondence mailed out to students Create a university/student identifier Improve authentication process for students who call or send e-mail Some of the best practices include�Some of the best practices include�

41. Making the changes - best practices Review office procedures and policies for shredding and disposing of sensitive information Periodically renew team member confidentiality agreements Maintain security updates to internal computers Best practices include.Best practices include.

42. References Sec 472, Higher Education Act of 1965 34 CFR 673.5, 682.200(b), and 685.200(b) Federal Student Aid Handbook 2004-2005 The Unexplained Side of Resources, 2003 NASFAA Conference, Anthony Jones and Kathy Gause, U.S. Department of Education Resources cited: Higher ED Act for cost of attendance materials. Regulations for reource materials.. FTC website and school guidance for GLB.Resources cited: Higher ED Act for cost of attendance materials. Regulations for reource materials.. FTC website and school guidance for GLB.

43. References IRS Publications 520 and 970 www.ftc.gov www.nacubo.org http://counsel.cua.edu/glb/questions/frequent.cfm

44. Questions TG Web site www.tgslc.org ASK TG� TG Customer Assistance (800) 845-6267 cust.assist@tgslc.org