Federal Update: Everything but HEOA Presented by Zack Goodwin – Harvard University Financial Aid...
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Transcript of Federal Update: Everything but HEOA Presented by Zack Goodwin – Harvard University Financial Aid...
Federal UpdateFederal Update::Everything but HEOAEverything but HEOA
Presented by Presented by Zack Goodwin – Harvard UniversityZack Goodwin – Harvard UniversityFinancial Aid Compliance and Training Financial Aid Compliance and Training OfficerOfficerBernie Pekala – Boston CollegeBernie Pekala – Boston CollegeDirector of Student Financial StrategiesDirector of Student Financial StrategiesNovember 20, 2008November 20, 2008
AgendaAgenda
• College Cost Reduction and Access College Cost Reduction and Access ActAct(CCRAA) of 2007(CCRAA) of 2007
• Ensuring Continued Access To Ensuring Continued Access To Student Loans Act (ECASLA) of 2008Student Loans Act (ECASLA) of 2008
• Post-9/11 Veterans Educational Post-9/11 Veterans Educational Assistance Act of 2008 Assistance Act of 2008
College Cost Reduction College Cost Reduction and Access Act (CCRAA)and Access Act (CCRAA)
• Signed into law September 27, 2007;Signed into law September 27, 2007;many provisions were effective many provisions were effective October 1October 1
• Budget reconciliation measureBudget reconciliation measure
Pell GrantsPell GrantsSecs. 101, 102(a) and 102(b)Secs. 101, 102(a) and 102(b)
• Eliminated tuition sensitivity as of July 1, Eliminated tuition sensitivity as of July 1, 2007 2007
• Increases the maximum authorized Increases the maximum authorized amount: amount: $4,800 for award years 2008-2009 and $4,800 for award years 2008-2009 and
2009-2010 (increase of $490 over 2007-2008)2009-2010 (increase of $490 over 2007-2008)$5,000 for award years 2010-2011 and 2011-$5,000 for award years 2010-2011 and 2011-
2012 (increase of $690)2012 (increase of $690)$5,400 for the 2012-2013 award year $5,400 for the 2012-2013 award year
(increase of $1,090)(increase of $1,090)
Teacher Education Assistance Teacher Education Assistance for College and Higher for College and Higher
Education (TEACH) GrantsEducation (TEACH) GrantsSec. 104Sec. 104
Final Rules Published June 23, 2008Final Rules Published June 23, 2008
• New grant program for current or prospective New grant program for current or prospective teachers attending eligible institutions, effective teachers attending eligible institutions, effective July 1, 2008July 1, 2008
• Grants may be made up to $4,000 per academic Grants may be made up to $4,000 per academic yearyear$$16,000 maximum for undergraduate degree16,000 maximum for undergraduate degree
or post-baccalaureate programor post-baccalaureate program $8,000 maximum for master’s degree$8,000 maximum for master’s degree
TEACH EligibilityTEACH Eligibility• Minimum GPA of 3.25 on a zero to 4.0 scale Minimum GPA of 3.25 on a zero to 4.0 scale
OROR• Scored above theScored above the 75th percentile on at least 75th percentile on at least
one battery of an undergraduate, post-one battery of an undergraduate, post-baccalaureate, or graduate school admission baccalaureate, or graduate school admission testtest
ANDAND• (for bachelor’s degree or post-baccalaureate (for bachelor’s degree or post-baccalaureate
program) completing or plans to complete program) completing or plans to complete coursework and other requirements necessary coursework and other requirements necessary to begin a career in teachingto begin a career in teaching
• (for master’s degree) is a teacher or retiree (for master’s degree) is a teacher or retiree from another occupation with expertise in a from another occupation with expertise in a field in which there is a shortage of teachersfield in which there is a shortage of teachers
TEACH Recipient TEACH Recipient ObligationsObligations
• Serve as a full-time “highly qualified” Serve as a full-time “highly qualified” teacher for at least 4 academic years teacher for at least 4 academic years within 8 years after completing educationwithin 8 years after completing education
• Teach in a public or other qualified Teach in a public or other qualified nonprofit private elementary or nonprofit private elementary or secondary schoolsecondary school
• Teach in a high-need fieldTeach in a high-need field
OR ELSEOR ELSE…the TEACH Grant(s) are …the TEACH Grant(s) are converted to unsubsidized Direct Loan(s) converted to unsubsidized Direct Loan(s) with interest applied retroactivelywith interest applied retroactively
College Access Challenge College Access Challenge Grant ProgramGrant Program
Sec. 801Sec. 801
• New 2-to-1 matching grant program for New 2-to-1 matching grant program for States and qualifying philanthropic States and qualifying philanthropic organizations in each of the fiscal years organizations in each of the fiscal years 2008 and 2009 2008 and 2009
• In Massachusetts, the State Departments of In Massachusetts, the State Departments of Elementary/Secondary Education and Elementary/Secondary Education and Higher Education will partner with the Higher Education will partner with the Massachusetts Educational Financing Massachusetts Educational Financing Authority (MEFA) to develop a ‘College and Authority (MEFA) to develop a ‘College and Career Web Portal’Career Web Portal’
• Practice exams and tutorials for Practice exams and tutorials for standardized testsstandardized tests
• Virtual campus toursVirtual campus tours• Assistance in completing the FAFSAAssistance in completing the FAFSA• Grant and scholarship research toolsGrant and scholarship research tools• College application and letter of College application and letter of
recommendation tracking toolsrecommendation tracking tools• High school transcript electronic High school transcript electronic
submission toolsubmission tool
The Massachusetts College and Career Web Portal will offer students, parents and
counselors:
Need AnalysisNeed AnalysisSec.104Sec.104
• Set specific increases in the student Income Set specific increases in the student Income Protection Allowance (IPA) for years 2009-2013Protection Allowance (IPA) for years 2009-2013Applies to dependent and independent Applies to dependent and independent
studentsstudentsAfter 2012-2013, IPA is thereafter tied to the After 2012-2013, IPA is thereafter tied to the
Consumer Price IndexConsumer Price IndexParent IPA is linked to the Consumer Price Parent IPA is linked to the Consumer Price
Index as of 2009-2010Index as of 2009-2010
• Expanded eligibility for the Simplified Needs Test Expanded eligibility for the Simplified Needs Test and the Automatic Zero EFCand the Automatic Zero EFC
• Eliminated consideration of certain untaxed Eliminated consideration of certain untaxed incomeincome
Economic Hardship Economic Hardship DefermentDeferment
Sec. 304(a)Sec. 304(a)
Final Rules Published October 23, Final Rules Published October 23, 20082008
• Changed from 100% of the poverty line Changed from 100% of the poverty line for a family of two to 150% of the for a family of two to 150% of the poverty line depending on borrower’s poverty line depending on borrower’s family sizefamily size
• Debt burden criterion for the deferment Debt burden criterion for the deferment was eliminated (though maintained by was eliminated (though maintained by the Secretary through June 30, 2008)the Secretary through June 30, 2008)
Military DefermentMilitary DefermentSecs. 202, 204Secs. 202, 204
Final Rules Published October 23, Final Rules Published October 23, 20082008
• Available to FFELP, Direct Loan and Available to FFELP, Direct Loan and Perkins borrowers regardless of Perkins borrowers regardless of disbursement datedisbursement date
• 3-year limit on military deferment 3-year limit on military deferment removedremoved
• Deferment extended 180 days Deferment extended 180 days following demobilizationfollowing demobilization
Income-Based Repayment Income-Based Repayment Plan Plan Sec. 203Sec. 203
Final Rules Published October 23, 2008Final Rules Published October 23, 2008 • Borrower can request that payments do Borrower can request that payments do
not exceed15% of difference between not exceed15% of difference between borrower’s AGI and 150% of the poverty borrower’s AGI and 150% of the poverty line for her/his family size, divided by 12 line for her/his family size, divided by 12
• Parent PLUS borrowers are not eligible Parent PLUS borrowers are not eligible for this plan, including borrowers with for this plan, including borrowers with consolidation loans that have underlying consolidation loans that have underlying parent PLUS loansparent PLUS loans
Income-Based repayment Income-Based repayment PlanPlan
continued…continued…
• Borrower’s eligibility evaluated annuallyBorrower’s eligibility evaluated annually• Education Department pays interest on Education Department pays interest on
subsidized loans for the first 3 yearssubsidized loans for the first 3 years• Remaining balance of loan canceled after 25 Remaining balance of loan canceled after 25
years if the borrower made consistent years if the borrower made consistent monthly payments under a regular or monthly payments under a regular or reduced repayment plan or was in economic reduced repayment plan or was in economic
hardship defermenthardship deferment• Effective Date: July 1, 2009Effective Date: July 1, 2009
Public Service Loan Public Service Loan ForgivenessForgiveness
Secs. 203, 401Secs. 203, 401
Final Rules Published October 23, 2008Final Rules Published October 23, 2008
• Balance of interest and principal forgiven after Balance of interest and principal forgiven after 120 payments, beginning October 1, 2007120 payments, beginning October 1, 2007
• Amount forgiven will not be taxableAmount forgiven will not be taxable
• Borrowers must:Borrowers must: Not be in defaultNot be in default Make their 120 monthly payments in Direct Make their 120 monthly payments in Direct
Lending ( Lending (FFEL borrowers must consolidate in DL) Be working in public service at the time of eachBe working in public service at the time of each
payment and at loan cancellation payment and at loan cancellation Repay their loans under the income-based, standard,Repay their loans under the income-based, standard,
and/or income and/or income--contingent plans contingent plans
What Is Public Service?What Is Public Service?• Employment by a nonprofit, tax-exempt 501(c)(3) organization Employment by a nonprofit, tax-exempt 501(c)(3) organization
• Employment by the federal government, a state government, Employment by the federal government, a state government, local government, or tribal government (including the military local government, or tribal government (including the military and public schools and colleges)and public schools and colleges)
• Service in a full-time AmeriCorps or Peace Corps position Service in a full-time AmeriCorps or Peace Corps position
OROR
• The Department of Education's regulations created a two-part The Department of Education's regulations created a two-part test of other circumstances under which students may still be test of other circumstances under which students may still be eligible:eligible:
The employer is The employer is not not "a business organized for profit, a labor union, a "a business organized for profit, a labor union, a partisan political organization, or an organization engaged in religious partisan political organization, or an organization engaged in religious activities, unless the qualifying activities are unrelated to religious activities, unless the qualifying activities are unrelated to religious instruction, worship services, or any form of proselytizing" instruction, worship services, or any form of proselytizing"
ANDAND The employer provides any of the following public services: emergency The employer provides any of the following public services: emergency
management; military service; public safety; law enforcement; public management; military service; public safety; law enforcement; public interest law services; early childhood education; public service for interest law services; early childhood education; public service for individuals with disabilities and the elderly; public health; public education; individuals with disabilities and the elderly; public health; public education; public library services; and school library or other school-based servicespublic library services; and school library or other school-based services
Loan Interest Rate Loan Interest Rate ReductionReduction
Sec. 201(a)Sec. 201(a)
• Phased-in rate reduction for undergraduate Phased-in rate reduction for undergraduate subsidized Stafford Loans (FFELP and Direct) subsidized Stafford Loans (FFELP and Direct) from 6.8 % to 3.4% over 4 yearsfrom 6.8 % to 3.4% over 4 years6.0% on or after July 1, 2008 and before July 1, 20096.0% on or after July 1, 2008 and before July 1, 20095.6% on or after July 1, 2009 and before July 1, 20105.6% on or after July 1, 2009 and before July 1, 20104.5% on or after July 1, 2010 and before July 1, 4.5% on or after July 1, 2010 and before July 1,
20011200113.4% on or after July 1, 2011 and before July 1, 20123.4% on or after July 1, 2011 and before July 1, 2012
Lender/Guarantor ImpactsLender/Guarantor ImpactsSecs. 301, 302, 305, 306, 701Secs. 301, 302, 305, 306, 701
• Reduced guaranty agency collection Reduced guaranty agency collection retention and account maintenance retention and account maintenance feesfees
• Reduced lender insurance percentage Reduced lender insurance percentage and Special Allowance Paymentsand Special Allowance Payments
• Increased lender origination feesIncreased lender origination fees• Eliminated Exceptional Performer Eliminated Exceptional Performer
StatusStatus
Lender/Guarantor ImpactsLender/Guarantor Impactscontinued…continued…
• Created PLUS Loan auction pilot programCreated PLUS Loan auction pilot program
Auction will determine what lenders will be eligible Auction will determine what lenders will be eligible to originate all parent PLUS Loans made to new to originate all parent PLUS Loans made to new borrowers as of July 1, 2009borrowers as of July 1, 2009
Two winners per stateTwo winners per state The Secretary will plan and implement the auction The Secretary will plan and implement the auction
program in consultation with the FCC and program in consultation with the FCC and Department of the TreasuryDepartment of the Treasury
UPDATE-See NASFAA News Release dated 11/13/08UPDATE-See NASFAA News Release dated 11/13/08
Professional JudgmentProfessional Judgment
• Dependency OverridesDependency OverridesMay be based on decision of other schoolMay be based on decision of other schoolAllows for emancipated minorsAllows for emancipated minorsAllows for orphans, foster children and Allows for orphans, foster children and
wards of the court at any time from age 13 wards of the court at any time from age 13 onwardonward
• Adds dislocated worker and homeless Adds dislocated worker and homeless statuses to areas meriting professional statuses to areas meriting professional judgmentjudgment
Ensuring Continued Ensuring Continued Access to Student Loans Access to Student Loans
Act (ECASLA)Act (ECASLA)
• Original legislation (2008-2009) Original legislation (2008-2009) signedsignedMay 7, 2008May 7, 2008
• One year extension (2009-2010) One year extension (2009-2010) signedsignedOctober 7, 2008October 7, 2008
Goals of ECASLAGoals of ECASLA
• Ensure availability of FFEL and Direct Ensure availability of FFEL and Direct student loans for 2009-2010student loans for 2009-2010
• Uphold the public/private partnershipUphold the public/private partnership• Protect taxpayer interests (no net costs)Protect taxpayer interests (no net costs)• Provide liquidity and support needed to Provide liquidity and support needed to
stabilize the student loan marketplacestabilize the student loan marketplace
Programs of ECASLAPrograms of ECASLA
• Purchase of Participation Interests (PPI)Purchase of Participation Interests (PPI)• Loan Purchase (PUT)Loan Purchase (PUT)• The Conduit (New-11/10/08)The Conduit (New-11/10/08)
Liquidity support to conforming Asset-Liquidity support to conforming Asset-Backed Commercial Paper (ABCP) conduitsBacked Commercial Paper (ABCP) conduits
Post 9/11 Veterans Post 9/11 Veterans Educational Assistance Educational Assistance
Act of 2008 Act of 2008 (New GI Bill)(New GI Bill)
• Became law on May 7, 2008Became law on May 7, 2008
Details of the New GI BillDetails of the New GI Bill
• Entitlement (Section 3311): Two Entitlement (Section 3311): Two years of active duty with some after years of active duty with some after 09/10/0809/10/08
• Duration (Section 3312): 4 academic Duration (Section 3312): 4 academic years which equals 36 months years which equals 36 months
Details of the New GI Bill Details of the New GI Bill continued…continued…
• Payment (Section 3313): Payment (Section 3313): Up to the most expensive in-state tuitionUp to the most expensive in-state tuition Monthly living/housing stipendMonthly living/housing stipend Annual $1,000 book/supplies stipendAnnual $1,000 book/supplies stipend All or some benefits to be paid directly All or some benefits to be paid directly
to school to school • Tutorial Assistance (Section 3314): Tutorial Assistance (Section 3314):
$100/month up to a maximum $1,200 $100/month up to a maximum $1,200
Details of the New GI Bill Details of the New GI Bill (cont.)(cont.)
• Licensure Payment (Section 3315): Up Licensure Payment (Section 3315): Up to $2,000 for one licensing/certificationto $2,000 for one licensing/certification
• Tuition Assistance-Private (Section Tuition Assistance-Private (Section 3317): Up to 50% of the cost greater 3317): Up to 50% of the cost greater than the most expensive public than the most expensive public programprogram
• Transfer of Unused Benefits (Section Transfer of Unused Benefits (Section 3319): Allows transfer to spouse 6(+4) 3319): Allows transfer to spouse 6(+4) and/or child (10) years of serviceand/or child (10) years of service
ResourcesResources
• www.ifap.ed.govwww.ifap.ed.gov• thomas.loc.govthomas.loc.gov• edlabor.house.govedlabor.house.gov• help.senate.govhelp.senate.gov• www.nasfaa.orgwww.nasfaa.org• www.aau.eduwww.aau.edu• www.gibill2008.orgwww.gibill2008.org• www.ibrinfo.orgwww.ibrinfo.org
Questions?Questions?