annmarie weisman training officer federal update november 7, 2012

Annmarie Weisman

Training Officer

Federal UpdateNovember 7, 2012

For Discussion Purposes Only

Topics

College Choice Tools studentaid.gov Default Rates• Executive Order 13607• Financial Aid Shopping

Sheet Regulatory Activity Recent Statutory Changes

ATB Pell Duration of Eligibility Grace Period Subsidy Subsidized Loan Limits

Verification, etc. Questions & Answers

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College Choice Tools

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College Navigator


College Choice: ScoreCard

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Financial Aid Shopping Sheet

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Institutional Metrics:Graduation rate under “Student Right-to-Know”

Most recent cohort default rate

Median debt for completers

Loan repayment information

Contact information

Cost of Attendance Elements

Grant s and Scholarships

Work Options Loan Options Other Options Including Family Contribution

Student Specific Information:

Net price After Grants

Custom Message

studentaid.gov

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Federal Student Aid Websites

Solution: StudentAid.gov


FSA Social Media

Twitter

Facebook

YouTube

Cohort Default Rates


What is the CDR Calculation?

A cohort default rate is the % of the number of the school’s FFEL and DL borrowers who enter repayment in one Federal Fiscal Year (October 1 - September 30) who default in that federal fiscal year or by the end of the: next federal fiscal year (2 year rate) next two federal fiscal years (3 year rate)

Begins with 2009 cohort


HEOA Changes

Increased monitoring from two to three years Establishes a three-year transition period for sanctions On 9/17/12 - released the FY 2010 2-Year Cohort Default Rates to schools (average = 9.1%)

On 9/24/12 - released the FY 2009 3-Year Cohort Default Rates to schools (average = 13.4%)

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2-Year Versus 3-Year CalculationThe Numerator is the number of borrowers from the denominator who default within a cohort period

The Denominator is the number of borrowers who enter repayment within a cohort period

3555000 .071 or 7.1%

6055000 .121 or 12.1%

5,000

FY-09 FY-10125 230

5,000

FY-09 FY-11FY-10125 230 250

1st official 3 year rates released 9/2012

Transition Period

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Executive Order (EO) 13607Establishing Principles of

Excellence for Educational Institutions Serving Service Members, Veterans, Spouses and other Family Members

GEN-12-10EA – 6/29/12


E.O. 13607• Signed April 27, 2012 • Designed to ensure information, support and protections put in place for those students enrolled in post-secondary programs receiving federal military educational benefits

• Schools participating in certain federal military education benefits enter into an agreement/understanding with DOD and VA

• 6/29/12 EA provides a link to recorded webinar and the executive order

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E.O. 13607• GEN-12-10 provides a series of Q & As to address how TIV schools can comply with EO 13607• Standardized cost form – ED’s “Shopping Sheet”• Aid Information – provides sample language• State Authorization and recruitment – follow existing ED regulations around state authorization, misrepresentation, recruitment and incentive compensation

• Accreditation – follow accreditation requirements• Readmission – follow ED’s guidelines for returning service members

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E.O. 13607• GEN-12-10 provides a series of Q & As to address how TIV schools can comply with EO 13607• Withdrawals – treat VA and DOD funds similar to R2T4 and nonTIV schools develop refund policy similar to R2T4

• Individual education plans – definitions/terms, degree requirements and transfer hour procedures

• Advising points of contact – basic understanding of benefits and services for military/service and family members and contact information for additional help

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Financial Aid Shopping Sheet

GEN-12-12GEN-12-17

EA – 9/11/12


Shopping Sheet – 2013-2014

• ED developed model format to deliver financial aid information to students - section 484 of HEOA

• Encouraged to be used by schools starting in 13/14• Designed to be used for undergraduate programs, but

can be used for any program• Especially helpful for 1st year students

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Shopping Sheet – 2013-2014• Required to be used by schools that agree to comply with E.O. 13607 (principles of excellence)• Provide prospective veteran/service member students with personalized form that contains standardized information describing program costs and costs that may be covered by available Federal educational benefits and financial aid

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Regulatory Activity

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Loans I Pay as You Earn Total and permanent disability (TPD)

Loans II Stand alone Direct Loan regulations FFEL origination elimination Reasonable and affordable payments for

defaulted loan rehabilitation

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Regulatory Activity (“Neg Reg”)


Teacher Preparation TEACH GrantTitle II accountability and reporting systems

Pell Grant Finalization of Summer Cross-Over Interim

Rule Fraud Prevention

New Neg Reg Process Early in 2013

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Regulatory Activity


Pay As You Earn Income Based Repayment (IBR) Plan

Statutory - FFEL and Direct Loan Maximum annual payment amount is 15% of

discretionary income. Remaining balance forgiven after 25 years.

New Law (SAFRA) – Effective 2014 Maximum annual payment amount is 10% of

discretionary income Remaining balance forgiven after 20 years. New Borrowers on or after July 1, 2014

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Income Contingent Repayment (ICR) Plan Statutory - Direct Loan Only

Regulatory defined formula Complex Loan amount and income Remaining balance forgiven after 25 years. Limited “take-up” rate

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Pay As You Earn


Pay As You Earn Plan Repayment PlanAmend ICR regulations to –

Reduce maximum annual payment about from 15% of discretionary income to 10%

Reduce forgiveness time from 25 years to 20 years

Available to more borrowers Negotiated rulemaking concluded in March, 2012

NPRM Published July 17, 2012 Final rule publication date Nov 1. Possible Early Implementation

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Pay As You Earn

Recent Statutory Changes

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Ability-to-Benefit (ATB)


Ability-to-Benefit (ATB)

Eliminates Title IV eligibility for students without a high school diploma (or equivalent) Recognized equivalent includes:

GED State certificate passing State authorized exam State

considers same as HSD Academic transcript of successful completion of at least a

2-year program acceptable for full credit toward a Bachelor’s degree

Excelled academically in HS and meets admission policy into at least an AA degree

Home schooled students

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ATB Exception

Students who attended a Title IV eligible program of study prior to July 1, 2012 OR officially registered for a TIV eligible program prior to July 1, 2012 AND later attended that program may continue to qualify under one of the ATB alternatives – Passing an independently administered,

approved ATB test Successfully completing at least six credit hours

or 225 clock hours

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ATB Exception (cont.) Receipt of Title IV aid prior to July 1, 2012 not

required to qualify for ATB exceptions

School must document student qualifies for use of ATB alternative using NSLDS, transcripts, other documentation from previous school indicating enrollment in eligible program

GEN-12-09 - provides a “grandfather” test and various scenarios to assist determine if a student qualifies for an ATB alternative

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Federal Pell Grant Program


Pell Lifetime Eligibility Used (LEU)

Reduces the duration of a student’s eligibility to receive Pell Grant to 12 semesters (600% - 6 full Scheduled Awards)

Applies to all students effective with the 2012-13 award year

Calculation includes all earlier years of the student’s receipt of Pell/BEOG NO “grandfather” clause

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Pell - LEU

Add each of the annual percentages of a student’s scheduled award that was actually disbursed to the student

If LEU >500% but <600%, partial eligibility

Once LEU reaches 600%, student no longer eligible for Pell

May also impact FSEOG eligibility

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Pell - LEU

• If <100% eligibility remaining, handle award like a transfer student

• Pay up to full amount allowed in first payment period/term

• Pay remaining balance in subsequent payment periods

• Do NOT spread out percentage evenly over remaining periods

• May round cents but cannot exceed 600%

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Pell – Scheduled Award Based on the statutory maximum award amount for

the year and the student’s EFC (and COA) Amount student would be eligible for if enrolled FT

for a full academic year 2013-14 – Maximum Award = $5,550

If EFC = 0, scheduled award = $5,550 If EFC = 1,000, scheduled award = $4,550

Annual Award is the amount of scheduled award received by the student

Consider < FT, < full academic year, R2T4, etc.

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Pell Grant Duration of Eligibility

Examples – Student’s Scheduled Award was $5,550, but

only received $2,775 because only enrolled for one semester, will have used 50% of that award year’s scheduled award

Student who was enrolled ¾ time for the entire

award year would have used 75% of his scheduled award

Pell Duration of Eligibility Calculate the equivalency by adding together each

of the annual % of a student’s scheduled award that was actually disbursed to the student

LEU – Lifetime Eligibility Used The example student’s LEU is 125% of the

total 600%. Once LEU reaches 600%, student is no longer

eligible. If LEU > 500%, but < 600%, partial eligibility

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Declining Pell – DCL GEN-12-18• Students can decline all/part of their Pell awards or

return some previously received Pell funds to preserve future eligibility• Student cannot return Pell from a prior award year• Student must provide a signed, written statement indicating that they are declining/returning Pell funds for which they are otherwise eligible and that those funds may not be available once the award year ends

• School must submit any required adjustment records for the student to the COD System

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Federal Direct Loan Program

GEN-11-16


Upfront Rebates

Elimination of Direct Loan Incentives Terminates repayment incentives (“upfront

rebate”) to encourage on-time repayment of loans

Effective for loans 1st disbursed on or after July 1, 2012

Still allows interest rate reduction to borrowers who repay electronically

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Grace Period Interest Subsidy

Temporarily eliminates the interest subsidy on Direct Subsidized Loans during the six month grace period

Applies to new Direct Stafford Loans when the 1st disbursement is made on or after July 1, 2012 and before July 1, 2014

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Aggregate Loan Limits

If a dependent student’s parent is denied a PLUS, the student can borrow up to the annual

independent loan levels.

•Additional amounts do not count against dependent aggregate loan limits

•Amounts able to borrow as dependent student (i.e. 1st year dependent student can borrow $3,500 – base sub/unsub and $2,000 additional unsub) would still count against dependent aggregate loan limits.

•Undergrads total aggregate = $57,500

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Graduate Students Loan Subsidy eliminated for graduate students*

Effective for loan periods starting on/after 7/1/2012

Annual limits unchanged, all unsubsidized ($20,500)

*Subsidy still available for preparatory coursework and teacher certification programs

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Subsidized Loan Limitation When a student has received subsidized loans

for 150% of the published time of the academic program – The student may not receive any additional

subsidized loans, and The subsidized loans received from July 1,

2013 on lose their subsidy Applies to “new borrowers” on or after July 1,

2013. Special calculation of 150% for transfer students Special calculation for less than fulltime students

Subsidized Loan Limitation 150% of the published length of the program 1st instance could be as early as December

2013 because of short-term programs Borrower responsible for interest (new

borrowers with loans on or after July 1, 2013) Loans can lose their subsidy

Subsidized Loan Limitation FSA will track, calculate, and inform Likely to be codes and comments on ISIRs

COD Editing

Schools will need to provide program information, including CIP code, length of program, and possibly more Probably as part of COD reporting Starting in 13-14 (possibly only for new

borrowers)

Verification

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2012-13 Verification

Still some tax filers not able to obtain IRS Tax Return Transcripts

Guidance on IFAP (EA 2012-11-02) Alternative documentation when tax transcript

is not available/cannot be obtained

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New!


Verification Documentation

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• Tax Return Transcript• Based on initial tax filing• Obtained in most situations where IRS Data Retrieval process cannot be used• Exceptions – amended returns, identity theft, foreign countries, certain island nations and US commonwealths

• Electronic Announcement dated 8/21/12


Verification Documentation

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• Amended Tax Returns

1) a signed copy of an original tax return; OR a Tax return transcript; AND

2) a signed copy of IRS form 1040X• Identity Theft

1) a signed copy of the paper IRS income tax return; AND

2) a signed copy of IRS Form 14039 “Identity Theft Affidavit” OR a signed

statement, or police report if applicable


Tax Filers - Extensions

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• Person is required to file, but obtained extension, must submit:– IRS form 4868 or IRS approval to extend beyond October

15, 2012– W-2 for each source of employment income– Signed statement by a self-employed individual certifying

amount of AGI & US income tax paid for 2011 – When above documentation received, verification is

considered complete (disbursements are valid)• School may request transcript/IRS DRT when taxes are filed



• Continuing to take small steps towards customized verification

• Items to be verified will be grouped• Individual student’s ISIR record will

indicate which group of items the student must verify

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2013-14 Verification Items

Same core FAFSA items as in 2012-13 AGI Taxes Paid Four Untaxed Income Items Education Credits # in Household # in College SNAP Child Support paid

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Verification items—•Retained all items subject to verification in 2012-13•Added two new items

• High school completion status• Identity/Statement of Educational Purpose

Federal Register – July 12, 2012

DCL GEN-12-11

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• Documentation of HS completion status: • HS diploma; or• Final HS transcript that shows the date of graduation

Note: Alternative documentation may be accepted if a copy of an applicant’s HS diploma or final HS transcript is unavailable (…but consider state and accreditor requirements)

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• Documentation of HS completion status: Recognized equivalent of a HS diploma• General Educational Development (GED) Certificate;• State certificate received by a student after the student

has passed a State-authorized examination that the State recognizes as the equivalent of a HS diploma;

• Academic transcript of a student who has successfully completed at least a two-year program that is acceptable for full credit toward a bachelor's degree; or

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2013-14 Verification • Documentation of HS completion status:

recognized equivalent of a HS diploma• For a person seeking enrollment in an educational program that leads to at least an associate degree or its equivalent and has not completed HS but has excelled academically in HS, documentation from the HS that the student excelled academically in HS and documentation from the postsecondary institution that the student has met the formalized, written policies of the postsecondary institution for admitting such students

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• Documentation of HS completion status: Homeschooled• Transcript, or the equivalent, signed by the parent or guardian, that lists the secondary school courses completed by the applicant and documents the successful completion of a secondary school education; OR

• A secondary school completion credential for home school (other than a HS diploma or its recognized equivalent) provided for under State law

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• Documentation of identity/statement of educational purpose• Appear in person* and present to an institutionally authorized individual• A valid govt.-issued photo ID (e.g., driver’s license, non-driver’s license, passport);

AND

• A signed statement of educational purpose

*If unable to appear in person, must provide an original, notarized statement of educational purpose signed by the applicant

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• Documentation of identity/statement of educational purpose (cont.)—• Must maintain, an annotated copy of the identification submitted by the applicant that includes:• The date documentation was received;

AND • The name of the institutionally-authorized individual that obtained the documentation

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Verification Tracking Groups

Verification tracking groupsand

Items to verify based on group(effective for 2013-14)

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• Adjusted Gross Income• U.S. Income Tax Paid• Untaxed Portions of

IRA Distributions• Untaxed Portions of

Pensions• IRA Deductions and

Payments

* if listed on FAFSA

V1– Standard

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• Tax Exempt Interest Income

• Education Credits• # of Household

Members• # in College• SNAP (Food Stamps) *• Child Support Paid *

Tax Filers:


V1—Standard (cont.)

Non-Tax Filers

• Income Earned from Work• # of Household Members• # in College• SNAP (food stamps) *• Child Support Paid *

* if listed on FAFSA

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V2—SNAP

Supplemental Nutrition Assistance Program (SNAP-Food Stamps)

A statement signed by the applicant/parent affirming that SNAP benefits were received by someone in the household during the 2011 and/or 2012 calendar years*

*applicant must obtain documentation from the issuing agency if the school has concerns with accuracy of information

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V3—Child Support Paid

Child Support Paid by applicant/spouse/parent

Statement signed by the applicant/parent certifying the—a) amount of support paid;b) name of the person who paid the support;c) name of the person to whom support was paid; andd) name(s) of child(ren) for whom support was paid*applicant must provide supporting documentation if the

institution has reason to believe that the information provided in the signed statement is inaccurate

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V4—Custom

• High School Completion Status

• Identity/Statement of Educational Purpose

• SNAP (Food Stamps)

• Child Support Paid

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V5—Aggregate

• High School Completion Status• Identity/Statement of Educational Purpose

AND

• All items indicated-Tax Filer (V1)• All items indicated-Non-Tax Filer (V1)

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New initiative – “unusual enrollment”• Unusual enrollment patterns• OIG initiative & FSA• “Pell runners” (e.g., 5 - 6 schools over 2 years)

• Are they who they say they are• Are they series about their education

• Not part of verification!• More info coming soon• C flags with requirement to follow up

Resources

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Web Resources• Studentaid.gov - one source of information

for prospective and current students about Federal Student Aid

• IFAP.ed.gov – library of information with links to laws, regulations, policy updates, announcements, etc. (for professional use)

• fafsa.gov - FAFSA application filing and information

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Help with Title IV Questions

• For Schools & Other Professionals• Research and Customer Care Center (RCCC)• 1-800-433-7327• [email protected]

• For Students• Federal Student Aid Information Center (FSAIC)• 1-800-4FED-AID

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mailto:[email protected]


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Contact Information

• For follow-up questions on this session, contact me at:

Annmarie Weisman, Training [email protected]

• To provide feedback to my supervisor, contact:Jo Ann Borel, [email protected]

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Evaluation

Your attention is appreciated at today’s session!

To provide feedback to me and my supervisor, please complete an evaluation form.

Thank you!!!


Region III Training Team

• Greg Martin, Training Officer• [email protected]• 215-656-6452

• Craig Rorie, Training Officer• [email protected]• 215-656-5916

• Annmarie Weisman, Training Officer• [email protected]• 215-656-6456

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QUESTIONS?

annmarie weisman training officer federal update november 7, 2012

Documents

cohort slide

discussion purposes

college navigator slide

custom message slide

year rates

year cohort default

year students

cohort period