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Department of Education Federal Policy Update

Department of Education Federal Policy Update. Jeff Baker Federal Student Aid October 21, 2009. Agenda. ARRA Reporting (Stimulus Bill) Default Rates Legislative Status Direct Loan Preparation Special Issues Regulatory Update Simplification – IRS Data Match.

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Department of Education Federal Policy Update

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  1. Department of Education Federal Policy Update Jeff Baker Federal Student Aid October 21, 2009

  2. Agenda ARRA Reporting (Stimulus Bill) Default Rates Legislative Status Direct Loan Preparation Special Issues Regulatory Update Simplification – IRS Data Match

  3. The American Recovery and Reinvestment Act(ARRA) 3

  4. ARRA • $200 million for 2009-10 Federal Work-Study • ARRA added to regular appropriation • Total included in school authorizations posted in March • Some schools did not see an increase • Special FWS reporting is required if $25,000 or more. • $17.1 billion - Adds $500 to appropriated maximum Pell Grant - $5,350 for 2009-2010 • No school reporting 4

  5. ARRA • September 24 Electronic Announcement • Must register • Reporting deadlines • Reporting guidance coming • October 2 Electronic Announcement • Specific Reporting Guidance • October 16 Electronic Announcement • Revisions and Clarification • E-mails to 1,796 schools 5

  6. FFEL/DLCohort Default Rates 6

  7. Legislative Status

  8. Legislative Status HR 3221 – Student Aid and Fiscal Responsibility Act of 2009 Passed full House on September 16 Senate still drafting Expected mark-up in next few weeks with floor action to follow Final bill expected (needed) by end of year

  9. Legislative Status HR 3221 Pell Grants More secure funding Changes to two-Pells in an award year Increased aid for children of deceased vets EFC change moved to needs analysis New Iraq and Afghanistan Service Grants

  10. Legislative Status HR 3221 – Needs Analysis (EFC) Effective 2011-12 Award Year Elimination of assets Asset threshold question – no subsidized aid Elimination of most untaxed income Elimination of income exclusions

  11. Proposed New Direct Perkins Loan • $6 billion available for new loans • Up from $1.5 billion now • Broad Availability to More Schools • School-level “Lending Authority” • Hold Harmless for Current Participating Schools • Incentive-Based Distribution Among School • Success in Graduating Low-Income Students • Affordable Tuition Charges • Credit for Non-Federal Need Based Grants Awarded/Received 13

  12. Proposed New Direct Perkins Loan New Loans – • Direct Loans • Interest rate remains at 5% • Unsubsidized • Same terms and conditions as Direct Loans • Originated by schools and ED using COD • Serviced by ED 14

  13. Proposed New Direct Perkins Loan • Recall federal share of cash in school’s Perkins Revolving Fund as of June 30, 2010 • Schools collect on existing loans • Remit to ED federal share; keep institutional share • Schools assign existing loans to ED • ED remits institutional share of collections to schools 15

  14. Legislative Status HR 3221 Transition to 100% Direct Loans Effective July 1, 2010 Foreign Schools Eligible Includes all loan types Sub, Unsub, PLUS, Consolidation Still have $500 Billion in outstanding FFEL loans

  15. DIRECT LOAN – FFEL PROGRAM STATISTICS

  16. 2008-09 ECASLA LOAN PURCHASE STATISTICS*

  17. 2008-2009 ED OWNED LOANS

  18. Loan Origination Similar to FFEL Confirm eligibility Determine award/loan amount MPN needed – eMPN available Create and send certification/origination to lender Similar to Grants School transmits award/loan origination data to COD via Common Record and same transmission as Pell Grant data

  19. Where Are We Now… • COD System capacity enhancements for 100% FFELP volume in progress, on time and on target • FSA Customer Service Centers • Increased and trained staff • Monitor incoming volume • COD has dedicated OnBoarding Team to assist setup completion requests and “starts”

  20. Where Are We Now… • FSA Direct Loan Transition Team • Focused OnBoarding/Point of Contact Team • Focused School Assist Team • Grad/Professional schools • Career Colleges • Small schools • Foreign

  21. How to Get Started in DL • Email to COD • CODSupport@acs-inc.com • Direct Loan Website • http://www.direct.ed.gov/participating.html • For more information • Email to DLEnrollment_FSA@ed.gov • Email to wood.mason@ed.gov

  22. Direct Loan Training Suite of Direct Loan webinars this Fall beginning in October Repeated Spring of 2010 COD Systems Primer Direct Loan program Primer COD & Direct Loan Program Reconciliation

  23. Direct Loan Training Suite of Direct Loan webinars this Fall and again Spring of 2010 Reports D/L Tools Direct Loan Servicing EdExpress for Direct Loans

  24. Direct Loan Training IFAP Announcement: Publication Date: September 28, 2009 • DCL ID:  ANN-09-30 Subject: Live Internet Webinars - Direct Loan Webinar Training Suite • Attachments contain session descriptions and schedule

  25. Direct Loan Training “EDExpress 101” Web based training module via IFAP COD Computer Based Training Download via IFAP Updated version this Fall

  26. Direct Loan Training FSA Fall Conference Nashville, Tennessee December 1-4, 2009

  27. Direct Loan Resources • Written Materials (IFAP) • Direct Loan Website • www.direct.ed.gov • National Direct Student Loan Coalition • www.directstudentloancoalition.org

  28. COD Call Center for Schools COD School Relations Center www.cod.ed.gov (800) 848-0978

  29. Special Issues

  30. Awards for Children on Deceased Military For any student whose parent or guardian was a member of the Armed Forces and died in Iraq or Afghanistan after September 11, 2001. For the 2009-2010 award year - If Pell eligible EFC, all Title IV aid awarded using zero EFC (Pell). If not Pell eligible EFC, all Title IV aid awarded using calculated EFC (No Pell). 32

  31. Awards for Children on Deceased Military For the 2010-2011 award year and following award years – If Pell eligible EFC, all Title IV aid awarded using zero EFC (Pell). If not Pell eligible EFC - Undergraduate student gets new Iraq/Afghanistan Service Grant in amount of maximum Pell for enrollment status. All other Title IV aid awarded using calculated EFC (No Pell). 33

  32. VA Educational Benefits no longer considered “Estimated Financial Assistance” or “Resources” for all Title IV programs Effective with the 2009-10 Award Year Both VA share and institutional share of “Yellow Ribbon” awards are excluded Includes ROTC See Electronic Announcement Posted to IFAP on August 14 VA Educational Benefits

  33. Two Pell Grants in an Award Year Effective with the 2009-2010 award year “Year round” or “Two Pell Grants in an Award Year” Allows student to receive funds beyond their scheduled award for the award year. Must be at least one-half time for second award No change to “scheduled award” No change to Payment Period Calculation

  34. Two Pell Grants in an Award Year Term-Based Current Rule: One Scheduled Award per Award YearAssume student’s 2009-10 Scheduled Award is $5,350 and $5,550 for 2010-11 Fall 2009$2,675 Spring 2010$2,675 Summer 2010$0 100% 2009-10 AY 2009-10 Award Year Summer 2010$2,775 Fall 2010$2,775 Spring 2011$0 100% 2010-11 AY 2010-11 Award Year

  35. Two Pell Grants in an Award Year Term-Based New Rule: Up to Two Scheduled Awards per Award YearStudent’s Scheduled Award is $5,350 in both award years Fall 2009$2,675 Spring 2010$2,675 Summer 2010$2,675 150% 2009-10 AY 2009-10 Award Year Fall 2010$2,775 Spring 2011$2,775 Summer 2011$2,775 150% 2010-11 AY 2010-11 Award Year

  36. Two Pell Grants in an Award Year Term-Based New Rule: Up to Two Scheduled Awards per Award Year Student’s Scheduled Award is $5,350 for the award year Summer 2009$2,675 Fall 2009$2,675 Spring 2010$2,675 Summer 2010$2,675 2009-10 Award Year 200% 2009-10 AY

  37. Two Pell Grants in an Award Year Term-Based New Rule: Up to Two Scheduled Awards per Award Year Student’s Scheduled Award is $5,350 for the award year Summer 2010$2,775 Fall 2010$2,775 Spring 2011$2,775 Summer 2011$2,775 2010-11 Award Year 200% 2010-11 AY

  38. Two Pell Grants in an Award Year Clock Hour Current Rule: One Scheduled Award per Award Year 1500 clock hour program; AY = 900 hours/26 weeks between July 1 and June 30. Student’s Scheduled Award is $5,350. 450 hours/13 weeks$2,675 450 hours/13 weeks$2,675 2009-10 Award Year 100% 2009-10 AY 300 hours/8 weeks$0 300 hours/8weeks$0 2009-10 Award Year

  39. Two Pell Grants in an Award Year Clock Hour New Rule: Up to Two Scheduled Awards per Award Year 1500 clock hour program; AY = 900 hours/26 weeks Student’s Scheduled Award is $5,350 for the award year 450 hours/13 weeks$2,675 450 hours/13 weeks$2,675 2009-10 Award Year 160% 2009-10 AY 300 hours/8 weeks$1,645 300 hours/8 weeks$1,645 2009-10 Award Year

  40. Negotiated Rulemaking

  41. Current Regulatory Process • General and lender/guaranty agency loan issues • NPRM posted July 23, 2009 • Comment period ended August 24, 2009 • School-based loan issues • NPRM posted July 28, 2009 • Comment period ended August 27, 2009 • Team V-Grants and other issues • NPRM August 21, 2009 • Comment period ended September 21, 2009

  42. Upcoming Regulatory Process Possible Topics • Foreign Schools • Satisfactory Academic Progress • Credit Hours for purposes of determining eligibility • Verification • High school diploma • Incentive compensation • Gainful employment in a recognized occupation • State authorization for institutional participation 44

  43. FAFSA Simplification

  44. Technology • 2010-11 design facilitated by technology upgrade • Updated navigation reduces the number of pages and length of the application • Display of help text and instructions will be enhanced by: • use of field instructions • flyover text • modal boxes

  45. Technology 47

  46. Technology 48

  47. Results Reporting • Retention, graduation and transfer rates within FAFSA on the Web • When students use the school code lookup within FOTW to lists colleges on the form, they will be presented with each college’s reported retention, graduation and transfer rates. • This information will also display on the FAFSA on the Web confirmation page. 49

  48. IRS Data Share

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