2008 NJASFAAANNUAL CONFERENCE

Federal UpdateJeff Baker

Federal Student Aid U.S. Department of Education

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Dependency Overrides

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Students Seeking Dependency Overrides

The Problem – Some students who are likely eligible for a

dependency override cannot find a school to consider an override at the time they need to submit a FAFSA.

Web FAFSA products to not allow a dependent student to submit without parental information.

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Students Seeking Dependency Overrides

The Solution – Students who are unable to provide parental

data will be able to submit their application through FOTW by indicating they believe that they have a special circumstance.

Application can be submitted for processing and all appropriate matches will be performed No EFC will be calculated These records will have a “special

circumstances” flag. School makes the determination after

obtaining documentation.

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Recent Legislation

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Higher Education Reconciliation Act (HERA) – February 8, 2006

College Cost Reduction and Access Act (CCRAA) – September 7, 2007

Ensuring Continued Access to Student Loans Act of 2008 (ECASLA) – May 7, 2008 Extended by HR 6899

Higher Education Opportunity Act (Reauthorization) – August 14, 2008

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Higher Education Opportunity Act

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Higher Education Act of 1965 expired in 2004.

Reauthorized HEA after 16 extensions.

Signed by the President on August 14, 2008.

Became Public Law 110-315. Website:

http://www.ed.gov/heoa

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HEOA - Pell Grants Year Round Awards – Up to two full

scheduled awards within on award year. Effective with the 2009-10 award year.

Life-Time Limit - Limits the duration of a student’s eligibility to 18 semesters. Effective with the 2008-09 award year

Changes the minimum Pell Grant award from a fixed $400 to ten percent of the appropriated maximum Pell Grant award. Effective for the 2009-10 award year.

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HEOA - Pell Grants Provides a maximum Pell Grant

award, regardless of calculated EFC, to any undergraduate student whose parent or guardian was a member of the Armed Forces and died in Iraq or Afghanistan after September 11, 2001. Effective with the 2009-10 award

year.

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HEOA – Student Loans Requires the Secretary to oversee

private education loans made by FFEL lenders to students attending Title IV institutions.

Addresses lender and guaranty agency inducements.

Provides for more consumer information from lenders, guaranty agencies, schools, and ED.

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HEOA – Student Loans Changes Cohort Default Rate

Calculation From two years to three years Transition Period 30% Penalty Rate

Increases “disbursement relief” CDR to 15%. Effective October 1, 2011

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HEOA – Student Loans Changes to Disability Discharge

Requirements Expands loan forgiveness but only if

Congress appropriates funds. Program would operate on a first-come, first-served basis.

Waiver of interest for military in combat zones.

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HEOA – Student Loans Removes VA Educational Benefits

from Estimated Financial Assistance. Also from “Resources” for campus-

based aid. Effective with the 2010-11 award

year.

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HEOA – Student Loans Dependent students eligible for

unsubsidized without parental FAFSA information. Effective on enactment – August

14, 2008 Paper FAFSA or EDE Submission Special process for Direct Loans

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Perkins Loans

Increases annual and aggregate loan limits – Annual $5,500 for undergrad Annual $8,000 for grad Aggregate $60,000 for grad Aggregate $27,500 for upper

division undergrad $11,000 for all othersEffective with the 2008-09 award

year.

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HEOA – Regulations Hearings

Texas Christian University, Fort Worth University of Rhode Island, Providence Johnson C. Smith College, Charlotte Pepperdine University, Malibu U.S. Department of Education,

Washington Cuyahoga Community College,

Cleveland

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Nov ’08 – Announcement of Formation of Committees and Solicitation of Nominations for Negotiators

Dec ’08 – Committees Established

Feb thru April ’09 – Negotiations

Aug ’09 – NPRM Published in the Federal Register

Nov ’09 – Final Rule Published

Jul ’10 – Rules Become Effective

HEOA – Regulations

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FFEL Loan Purchase Programs

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Legal Authorities Ensuring Continuing Access to Student

Loans Act of 2008 (P.L. 110-227) HR 5715 Signed by the President on May 7,

2008 Strengthened GA Lender of Last Resort

Program Provided Secretary authority to

purchase FFEL loans Cannot provide advanced funding to

lenders

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Program Objectives Ensure that eligible students and parents

receive federal student loans for the 2008-2009 academic year

Support the FFEL Program as a successful private/public partnership

Ensure no net cost to the federal government

No statutory authority to provide advance funding

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Commitment by ED to purchase “participation interests” in eligible 2008-2009 FFEL loans through September 30, 2009.

ED’s purchase will provide immediate liquidity.

To terminate ED’s participation interest lender repays ED with defined yield.

Loan Participation Purchase Program

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Loan Purchase Program

Commitment by ED to purchase eligible 2008-2009 FFEL loans through September 30, 2009.

Any FFEL lender/holder Loans must be fully disbursed to be

purchased. 45 day advance notice of loans to be sold. ED’s commitment has value in financial

markets.

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Where We Are Today Academic Competitiveness and National

SMART Grants Increased FFEL and DL Loan Limits Interest Rates PLUS Loans Need Analysis Formula/Dependency Test Auto Zero EFC/Simplified Needs Test Professional Judgment/Dependency

Overrides

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ACG and National SMART Grants Eligible Non-Citizens Eligible At least half-time enrollment Students in certificate programs

eligible, if program is at least one year in length and offered at a two or four-year degree granting institution.

Awards based on student’s grade level instead of “academic year”

Effective July 1, 2009 – by HEOA

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Grade LevelBase

AmountAdditional

Unsubsidized

1st-yr Dependent $3,500 $2,000

2nd-yr Dependent $4,500 $2,000

Upper Division Dep. $5,500 $2,000

1st-yr Independent $3,500 $6,000

2nd-yr Independent $4,500 $6,000

Upper Division Indep. $5,500 $7,000

Graduate/Professional $8,500 $12,000

FFEL/DL Annual Loan Limits

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Interest Rates Reduced interest rates on undergraduate

subsidized loans only from current 6.8% to

6.0% for loans disbursed on or after 7/1/2008 5.6% for loans disbursed on or after 7/1/2009 4.5% for loans disbursed on or after 7/1/2010 3.4% for loans disbursed on or after 7/1/2011

Beginning 7/1/2012, rates revert to 6.8% Unsubsidized Stafford Loans and all

Staffords for graduate students remain at 6.8% fixed

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PLUS Loans

Extenuating circumstances for adverse credit may include delinquency of up to 180 days on mortgage payments or on medical bill payments

Delayed repayment start date for parent PLUS borrowers at their option

Interest Rates (parents and students) FFEL 8.5% Direct Loans 7.9%

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Need Analysis Increases student income protection

allowances Excludes from specified list of untaxed

income -- Welfare payments Earned income credit amounts Special fuel tax credit Excluded foreign income Untaxed Social Security Benefits

Effective for 2009-2010

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Need Analysis Excludes ‘special combat pay’ from

income Qualified education benefit (529 plan)

owned by dependent student is an asset of the parent

Distributions from 529 plans excluded from other financial assistance

Effective for 2009-2010

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Dependency Criteria Independent student definition –

Is an orphan, in foster care, or a ward of the court, or was at any time when the student was is 13 years of age or older.

Is, or was, an emancipated minor or is in legal guardianship in the student’s state of legal residence.

Has been verified as an unaccompanied youth who is a homeless child or youth.

Effective for 2009-2010

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Auto Zero EFC and SNT Increases Auto Zero EFC income level

from $20,000 to $30,000 (indexed to CPI)

Increases time from 12 to 24 months for receipt of means tested benefits

Adds Dislocated Worker in addition to type of tax return and means tested benefits

Effective for 2009-2010

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Professional Judgment Dependency Overrides Adds dislocated worker and

homelessness as examples of when an FAA can use professional judgment

Provides that an FAA can use a dependency override made by another FAA within the same award year

Both effective for the 2009-2010 award year

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HEOA Implementation

FAFSA 2009-10 Regulations

www.ed.gov/heoa Dear Colleague Letters

Comprehensive Summary Selected Topics

FSA Training Institutional Data Reporting

(NCES/IPEDS)

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2007-2008 Regulations

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2007-2008 Rulemaking

TEACH Grant NPRM Published March 24, 2008 Final Rule Published June 23, 2008 Rules Effective July 1, 2008

Title IV Loan Programs NPRM Published July 1, 2008 Comment Period Ends August 15, 2008 Final Rule Published October 23, 2008 Rules Effective July 1, 2009

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2007-08 TEACH Final Effective for the 2008-2009 award year. Must be repaid as Direct Unsubsidized Loan

if student does not – Teach for at least four years within

eight years of ceasing enrollment in the TEACH Grant eligible program, as a - Highly Qualified Teacher At a Title I school In a specified subject area.

“In for a dollar, in for four years.”

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2007-08 TEACH Final Up to $4,000 per year for first

undergraduate or post-baccalaureate (non degree) program - $16,000 aggregate

Up to $4,000 per year for graduate student - $8,000 aggregate

Prorated amounts for less than full-time enrollment

Award, when combined with other assistance, cannot exceed cost of attendance (No EFC)

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2007-08 TEACH Final TEACH Grant recipient must teach in a

high-need field in the majority of classes taught.

“Other” high-need fields must be listed in the Department of Education’s Nationwide Listing of Teacher Shortage Areas at the time the recipient begins qualified teaching.

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2007-08 TEACH Final Institutional Eligibility

See DCL GEN-08-07, posted to IFAP on June 3, 2008

Institutional Choice whether to participate An institution that offers one or more

TEACH Grant-eligible programs may participate in the TEACH Grant Program

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2007-08 TEACH Final Funding, awards and disbursements much

like Pell, ACG, and SMART Does not matter which loan program

school participates in (FFEL or Direct Loans)

Institution has no responsibility for tracking or for conversion of grant to loan

NSLDS and Direct Loan Servicing are the tracking mechanisms

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TEACH Grant Statistics

Number of Approved TEACH Grant Schools 563Number of Originating and Disbursing Schools 130Amount of Originations Number of TEACH Originations $9,021,138Number of TEACH Originations 2,562Actual Disbursement Amount $3,066,887Average TEACH Grant Award $3,521ATS Notes Received 4,774

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2007-2008 Loans Final

Definition of Not-for-Profit Holder FFEL Only

Income-based Repayment Plans FFEL and Direct Loans

Public Service Loan Forgiveness Direct Loan only

Economic Hardship and Military Service Deferments FFEL, Direct Loans, and Perkins

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Upcoming FSA Training

Federal Student Aid Conferences –October 28 - 31, 2008Hyatt Regency DallasDallas, Texas

December 2-5, 2008Paris/Bally'sLas Vegas, Nevada

http://fsaconferences.ed.gov/

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