SuperHERA

The Higher Education Reconciliation Act is Not Your Nemesis

Benefits of HERA

More money for Pell eligible students ACG for first and second year students SMART for third and fourth year students

More Pell eligible students Increased income maximums for auto-zero EFC and

simplified needs test (SNT) More eligibility for Federal Student Aid

Allows room and board cost in COA for less than half-time students (two consecutive, 3 total max)

Allows cost of professional licensure or certification in COA

Provisions

Student Eligibility, Needs Analysis and COA ACG and SMART Loan Issues Institutional/Program Eligibility and R2T4

Student Eligibility

X-Ray Vision Not Required

Drug Conviction Eligibility

Applicant loses eligibility for Title IV aid only if the drug-related offense for which he or she was convicted occurred while the student was receiving Title IV aid. Student considered enrolled during winter,

spring, and other breaks Student not considered enrolled if drug

offense occurs during summer break and student not attending summer school

Date of ineligibility begins on date of conviction

Simplified Needs Testand Auto Zero EFC

Only the parent’s tax return is considered for auto-zero EFC and SNT EFC determinations

Income criteria changed from $16,000 to $20,000

Means-Tested Federal Benefit Program

Alternative to Tax Return Requirement for Eligibility for Auto Zero EFC and SNT Relevant income criteria must also be met

Check the list of approved programs for 0607 in GEN-06-10 Receipt by any member of the student’s family is considered to

be a benefit received by the parent(s) of a dependent student or by the independent student

Document in student’s record how student qualified Create self-certification statement that asks the independent

student or dependent student’s parent to check the approved program from which benefits were received

Make this document required for disbursement

Qualified Educational Benefits

Treated as assets of the owner of the plan Value of account at time FAFSA is completed

is reported For prepaid tuition plans, value is amount of

refund for that year Not included as an asset if the owner is a

dependent student Not included as an asset if the owner is

someone whose information is not included on the FAFSA

Small Business Assets

The family must own and control the small business Minority partners do not “own and control” the

business Documentation

100% verification schools should review all schedules filed with tax returns

If you have conflicting information, request corporate or partnership returns or Schedule C or CEZ.

Cost of Attendance

Room and Board for Students less than Half Time Create new budget components Insert comment in student record and/or file Ask IS support specialist to write a script that will

Prevent insertion of the room and board budget components where they exist for the student in the two previous semesters or in any three prior semesters

Prevent adding the licensure/professional certification budget component if it exists for the student in a prior aid year

Licensure and professional certification Obtain receipt for the student’s file Clearly document to avoid replication

ACG and SMART

You CAN Leap Tall Buildings in a Single Bound

ACG and SMART

Determine Responsibility for Implementation Develop Implementation Procedures

Identify Verify Document

Develop Monitoring Process Verify Document

Loan Issues

Faster than a Speeding Bullet

Loan Issues

DISBURSEMENT REQUIREMENTS

Lights out! Dual disbursement for single term loans hits the road (well almost)

30-day delayed delivery requirement: adieu! Effective Feb 8, 2006 No application required

Loans Loans Loans

New loans…. Grad PLUS: provisions and requirements

Who is eligible? Do I HAVE to certify these things? How does Grad PLUS effect aggregate loan

limits?

Loans Loans and more Loans

…..means new fees and rates!.... 1% Federal Default Fee on FFELP

loans Combined with the 3% origination fee, does this

mean PLUS borrowers will pay 4% in fees?

3% origination fee phased out over time (currently at 2% as of July 1, 2006)

Gotta love North Carolina! Phase out DOES NOT apply to PLUS

Loans are my life

New fixed rates (for loans disbursed on or after July 1, 2006): Stafford 6.8% PLUS 8.5% (FFELP) Loans certified before July 1, 2006 will continue to

have variable interest rate

New Stafford limits (effective July 1, 2007) 1st year undergraduate: $3,500 (base) 2nd year undergraduate: $4,500 (base) Grad/Professional: $12,000 (Unsubsidized)

Loans (we’re almost done)

Note: No change in the aggregate loan limits

Consolidation In-school consolidation eliminated: loans must be

in grace, repayment, deferment or forbearance Spousal consolidation also eliminated Single holder rule abolished

Program Eligibilityand R2T4

Keeping Kryptonite at Bay

R2T4

Requirements Will apply to SMART/ACG; no longer apply to LEAP, SLEAP, GEAR-UP and SSS

Post-Withdraw Disbursement of Grant Funds Notification Institution MUST notify student and get

confirmation that the student still wants grant funds if grant funds disbursed directly to student….

….However PWD of grant funds may be credited to student’s account for outstanding charges without the notification process

R2T4

Completion of more than 60% of the period Return of Funds Within 45 days

Must returned unearned funds within 45 days after date of determination (increase from 30 to 45 days)

Questions

What Mere Mortals Should Know

Contact Us

Terri LeGrand, Assistant Director of Financial Aid

Wake Forest University

legrante@wfu.edu

(336) 758-5179

Ben May, Assistant Director of Financial Aid

Wake Forest University

maybl@wfu.edu

(336) 758-5181