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Washington Update Ohio Bursars Association Spring Conference Cincinnati April 5, 2019

Explore key updates from the 116th Congress, budget processes, Pell Grant changes, and Higher Education Act reauthorization discussions. Stay informed on recent legislative developments impacting higher education funding.

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Washington Update Ohio Bursars Association Spring Conference Cincinnati April 5, 2019

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  1. Washington Update Ohio Bursars Association Spring ConferenceCincinnatiApril 5, 2019 Bryan Dickson Assistant Director, Advocacy & Student Financial Services NACUBO

  2. For 116th Congress: Democrats control the House with almost a 40-seat margin Partisan makeup of the House compared to the previous Congress 2018 U.S. House election results map Seats flipped R to D (Total: 42) Seats flipped D to R (Total: 3) Not yet called (color outline is incumbent’s party) ■Republican won ■Democrat won ■Election not yet called

  3. For 116th Congress: Republicans have expanded their Senate majority by three seats Composition of the 116th Senate map Seats flipped R to D (Total: 2) Seats flipped D to R (Total: 4) ■2 Democrats (19) ■2 Republicans (22) ■1 Democrat + 1 Republican (9) ** * * *** *Sens. King (I-ME) and Sanders (I-VT) caucus with the Democrats **In MN, both Democratic candidates won ***In MS, Wicker (R) won reelection and Hyde-Smith (R) won reelection in a runoff *Independents Sanders and King, who caucus with the Democrats, have been included in the Democratic tally

  4. 2019 On Capitol Hill • Debt Limit • Sequestration • FY20, FY21 • HEA Reauthorization • Cybersecurity, data privacy Executive and Judicial Branch • Title IX (campus sexual assault) • Accreditation and program integrity • Affirmative Action • Immigration, DACA Other Pressure Points • Admissions scandal • College costs and student debt • Campus free speech • Revenue • State budgets • Tuition pressure • Charitable giving

  5. Congressional Budget Process February* March – April* May – September 30* Senate passes budget resolution Senate passes appropriations bills S President releases budget request Appropriations subcommittees draft bills X X X X X X X X X X X X Conference committees resolve differences X X X X X X X X X X X X Senate Bills X X X X X X X X X X X X Combined H x12 Subcommittees House Bills Congress passes combined budget Resolution Any unfinished appropriations bills combined into omnibus bill House passes budget resolution House passes appropriations bills *Denotes the pace of the process under “regular order” Sources: Congress.gov

  6. Department of Education Discretionary budget authority ■President’s Request ■Enacted BILLIONS OF US DOLLARS *FY2017 request is based on President Obama’s FY2017 request **FY2018 enacted is based on the current Continuing Resolution Sources: President Trump's FY2020 and 2019 Budget Requests March 19, 2019 | Alice Johnson

  7. President’s FY20 Requests • Maximum Pell Grant award of $6,195 • Eliminate the Supplemental Educational Opportunity Grant (SEOG) program • Significantly cut Federal Work Study from $1.1 billion to $500 million. • Proposes a consolidation of five income-driven loan repayment plans into one plan which would set monthly payments at 12.5 percent of discretionary income and eliminate the standard repayment cap. • Undergraduate borrowers would be eligible for forgiveness after 15 years while graduate students would be eligible after 30 years of repayment.

  8. Higher Ed Community Requests • The Pell Grant maximum should be increased to at least $6,345, and the appropriate level should be $6,655. • Had the Pell Grant maximum award simply kept pace with inflation from FY1975 (the first year the program served the majority of undergraduates) the award level would be $6,655 in FY20. • Campus-Based Aid • SEOG, $1.028 billion • Federal Work-Study, $1.434 billion.

  9. Higher Education Act Reauthorization • Last reauthorized in 2008 • Authorizes Title IV Federal Student Aid programs • PROSPER Act introduced • Whitepapers • Aim Higher Act introduced • 2018 Elections • More Hearings • Risk sharing remains popular

  10. Reauthorization on The Hill House Republicans’ Plan (PROSPER ACT) • Promote Innovation, Access, and Completion • Simplify and Improve Student Aid • Empower Students to Make Informed Decisions • Ensure Accountability; Limited Federal Role House Democrats’ Response (Aim Higher Act) • Improve Access • Make College More Affordable • Increase Completion

  11. The White House’s Take on HEA • Accreditation • Increase innovation • Align education to the needs of today’s workforce • Increase institutional accountability • Accelerate program completion • Support HBCUs • Encourage responsible borrowing; simplify aid • Support returning citizens

  12. Aid Like a Paycheck Core Concern Paying students all of their aid in the beginning of a term makes it difficult for them to budget and control spending. • Credit balance refunds would be paid to students in equal monthly or weekly installments • May be unequal to adjust for varying costs, such as upfront charges for tuition and fees • First installment may be paid as early as 30 days before first day of classes • Must be paid no later than 30 days after the start of classes • Details unclear

  13. Return of Title IV Funds • Aid earned by quarter of term • School returns unearned aid based on total disbursed, regardless of credit balance refunds • School may only recover 10% of amount returned from student • If student completes at least one modular course in term, not treated as withdrawal

  14. At the Department of Education • Negotiated rulemaking • Title IX • Borrower defense • SFA Audits: new requirement? • Perkins • Cash management • Payment vehicle

  15. Perkins Loan Program • Expired (still) • Great example of “risk sharing” • COHEAO’s efforts • NACUBO Perkins Wind-down Guidance

  16. Reminder: Cash Management Rules Some rules apply to all schools. Others to schools with certain arrangements with other entities If you have a T1 or T2 arrangement… • Develop due diligence process to ensure appropriate fees • Disclose entire contract on your website and to ED • List features/fees in selection menu • Disclose monetary/non-monetary consideration received • Disclose contract date (# of students, mean/median fees) on ED’s website • Among other things... Tier 1: With a 3rd party servicer processing Title IV aid and offers financial account (or markets account from another entity) Tier 2: With a bank where accounts are offered and marketed directly to students See NACUBO summary: https://www.nacubo.org/Topics/Student-Financial-Services/Debit-Cards-and-Campus-Banking-Products

  17. FSA Payment Vehicle • Part of FSA’s myStudentAid mobile app. Students can: • Browse potential schools • Complete FAFSA • Explore aid options • Manage/pay loans • Customer service • Online account with great terms; no fees

  18. IRS Form 1098-T Let’s talk for a minute….

  19. Federal Education Tax Credits American Opportunity Tax Credit (AOTC) • Up to $2,500 • 100 percent of the first $2,000 you spend on qualifying education expenses plus 25 percent of the next $2,000 you spend for a total possible credit of $2,500. • Up to $1,000 can be refunded Lifetime Learning Tax Credit • Worth up to $2,000 per tax return. • 20 percent of the first $10,000 of qualified education expenses

  20. TIN Certification • Checkbox certifies that school has followed rules for soliciting TINs • Check the box for a student if • TIN is reported, and school believes it to be correct • No TIN is reported, but school has asked student in appropriate manner at least once during year • Leave checkbox blank only if • school does not have TIN and • has not followed IRS rules about soliciting TINs

  21. Reporting Exceptions

  22. Qualified Tuition and Related Expenses (QTRE) Definition has not changed • Tuition and fees required for enrollment • Books and supplies charges, if required to be paid to institution But not • Personal expenses (room, board, insurance, medical, travel, etc.) • Expenses for courses involving sports, games, or hobbies (unless part of degree program) See NACUBO Advisory Report 18-06

  23. Scholarships and Grants Definition has not changed • IRS proposed broadening “administered and processed by the institution” • 2017 instructions have added “which you know or reasonably should know is a scholarship or grant” • All grant aid that goes toward cost of attendance should be reported • Grant aid that can pay QTRE is reported in both Box 1 and Box 5 • Aid that is restricted to nonqualified expenses is reported only in Box 5

  24. Reporting Payments (Current Rules)

  25. Two 1098-T Go-to Resources Q&A from 2017 Webcast Advisory 18-06 Available at: https://www.nacubo.org/Topics/Tax/IRS-1098-T

  26. NACUBO Resources • Bursar List • Student Financial Services Council • International Overpayments • Financial Responsibility Agreements • Policy Manual Suggestions • Perkins Wind-down Guidance • SFS Research • Student Financial Services Benchmarking Study • SFS Policies and Procedures Study • NACUBO.org (“Topics” or “Advocacy” tabs)

  27. Thank you. Bryan Dickson bdickson@nacubo.org

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