CCCSFAAA December 7, 2008 Federal Update Jeff Baker Federal Student Aid U.S. Department of Education
Jan 04, 2016
33
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.
44
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.
55
Students Seeking Dependency Overrides
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.
6
FFEL Loan Purchase Programs Participation Purchase Program for partially disbursed 2008-
2009 FFEL loans through September 30, 2009.
Loan Purchase Program for fully disbursed 2008-2009 FFEL loans through September 30, 2009.
Participation Purchase Program for partially disbursed 2009-2010 FFEL loans through September 30, 2010.
Loan Purchase Program for fully disbursed 2009-2010 FFEL loans through September 30, 2010.
8
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.
9
HEOA - Pell Grants
Provides a maximum Pell Grant award to any Pell eligible 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.
10
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
11
HEOA – Student Loans
Removes VA Educational Benefits from “Estimated Financial Assistance” for loans and from “Resources” for campus-based aid. Effective with the 2010-11 award year.
12
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
13
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.
15
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
Recent Legislation
16
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
17
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
18
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 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
19
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
20
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 Final Rule Published October 23, 2008 Rules Effective July 1, 2009
21
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.”
22
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)
23
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
24
TEACH Grant Statistics
Number of Approved TEACH Grant Schools 611Number of Originating and Disbursing Schools 179Amount of Originations Number of TEACH Originations $12,992,725Number of TEACH Originations 3,754Actual Disbursement Amount $4,639,083Average TEACH Grant Award $3,462ATS Notes Received 5,821
26
FFEL Loan Certification
A school may not: Refuse or delay certification based on
borrower’s choice of lender or GA Assign lender to first-time borrower Refuse to certify or certify a reduced
amount; except on a case-by-case basis Includes “school as lender”
27
School may choose to have preferred lender list (includes web processes)
List must have at least 3 unaffiliated lenders Must disclose method/criteria for lender
inclusion on the list Must provide comparative information Must include prominent statement advising
borrowers that use of school preferred lender not required
FFEL Preferred Lender Lists
28
Prohibited Inducements Affects FFEL lenders and guaranty agencies
Creates concept of “rebuttable presumption” for prohibited and allowed activities
Includes a non-exhaustive list of prohibited activities
Includes a list of allowed activities
30
Mandates
“ The entire financial aid system—including federal, state, institutional, and private programs—is confusing, complex, inefficient, duplicative, and frequently does not direct aid to students who truly need it.”
- The Secretary of Education’sCommission on the Future of Higher Education
31
Mandates
Congress, in passing the HEOA, required the Department of Education to issue a report on efforts to simplify the FAFSA that includes looking at the elimination of income data elements, as well as other items.
Issues – Federal Student Aid The application is complex and
intimidating. Much of the data are unverifiable. Current EFC formula is arbitrary, difficult
to understand, lacks clarity and relevance, and subject to “gaming.”
Result of application (EFC) is “how much the student will NOT receive.”
Multiplicity of programs is confusing.
33
Principles for Reform Access to Aid
Application will request information that is easily obtainable and verifiable.
Application will only ask questions necessary to determine eligibility and award levels.
Federal Student Aid Targets the neediest students; Is independent of other aid; Is predictable; Is portable, and Distributes aid through fewer programs.
34
A Simplified FAFSA
Only ask for information needed to determine federal aid eligibility, aid types, and amounts.Two pages - no instruction pages(s).Fewer than 30 questions –
- Identification - Dependency- Contact Info - Income/Exempts- Eligibility - Certifications- Colleges and states
36
Rational Approach
Establish–
Federal Student Aid Target (FSAT)
Federal Student Aid Commitment (FSAC)
Consolidate aid programs into one grant (Pell), one loan (DL/FFEL) and one work study (FWS) program.
37
Federal Student Aid Target (FSAT)
Maximum amount of federal subsidized aid (Pell Grant, subsidized loans, and FWS).
Amount increases annually by CPI.
For example –- 100% of average Tuition & Fees, Books
& Supplies, and Meals & Housing at community colleges.
38
Federal Student Aid Commitment (FSAC)
Student’s portion of FSAT based on AGI and IRS Number of Exemptions, related to HHS Poverty Levels.
Example: -- Grants up to 250% of poverty level; Sub loans and FWS up to 400% of poverty level;
39
Unsubsidized Aid Includes unsubsidized Stafford and PLUS
loans;
Applies only after all other aid is awarded;
Covers difference between cost of attendance and all other sources of aid;
Includes annual loan limits for unsubsidized Stafford.
40
Policy/Budget Considerations
Select “Dials” FSAT: percentage of cost of attendance at
which type of school FSAC: percentages of HHS poverty level to
be used for grant, subsidized loan, and work study
Determine “Levers” Maximum spending with current
allocations Optimized spending to ensure access and
success
41
0
2,000
4,000
6,000
8,000
10,000
12,000
Pell Sub Loan
Pell Max = $4,800
Sub Loan Max = $5,500
Examples of Dials and Levers
0
2,000
4,000
6,000
8,000
10,000
12,000
Lowto $0
$3Kto
$6K
$9Kto
$12K
$15Kto
$18K
$21Kto
$25K
$29Kto
$32K
$36Kto
$40K
$44Kto
$48K
$51Kto
$55K
$58Kto
$62K
$68Kto
$71K
$73Kto
$80K
above$88K
Pell Sub Loan
Pell Max = $4,800
Sub Loan Max = $6,000
-
2
4
6
8
10
12
14
Lowto $0
$3 to$6
$9 to$12
$15to
$18
$21to
$25
$29to
$32
$36to
$40
$44to
$48
$51to
$55
$58to
$62
$68to
$71
$73to
$80
above$88
Income Level (in thousands of $)
Aid
(in
th
ou
san
ds
of
$)
Pell Grants
Subsidized Loans
0
2,000
4,000
6,000
8,000
10,000
12,000
Pell Sub Loan
Pell Max = $4,800
Sub Loan Max = $5,200
Unsubsidized Unsubsidized
Unsubsidized Unsubsidized
42
1 2 2 3 4 5 6 7 8 More than 8
AGIMarried w/
Spouse Including Child
Income Cut-Off $21,000 $29,000 $36,000 $45,000 $55,000 $64,000 $73,000 $82,000 $92,000 $92,000
Low to $0 3,400 3,600 4,800 4,800 4,800 4,800 4,800 4,800 4,800 4,800 $1 to $3,000 3,400 3,400 4,800 4,800 4,800 4,800 4,800 4,800 4,800 4,800 $3,001 to $6,000 3,400 3,400 4,800 4,800 4,800 4,800 4,800 4,800 4,800 4,800 $6,001 to $9,000 3,400 3,400 4,800 4,800 4,800 4,800 4,800 4,800 4,800 4,800 $9,001 to $12,000 2,800 2,800 4,800 4,800 4,800 4,800 4,800 4,800 4,800 4,800 $12,001 to $15,000 1,950 2,400 4,800 4,800 4,800 4,800 4,800 4,800 4,800 4,800 $15,001 to $18,000 1,100 2,100 4,800 4,800 4,800 4,800 4,800 4,800 4,800 4,800 $18,001 to $21,000 400 1,500 4,800 4,800 4,800 4,800 4,800 4,800 4,800 4,800 $21,001 to $25,000 - 800 4,800 4,800 4,800 4,800 4,800 4,800 4,800 4,800 $25,001 to $29,000 - 400 4,800 4,800 4,800 4,800 4,800 4,800 4,800 4,800 $29,001 to $32,000 - - 4,800 4,800 4,800 4,800 4,800 4,800 4,800 4,800 $32,000 to $36,000 - - 3,000 3,900 4,000 4,100 4,200 4,300 4,400 4,500 $36,001 to $40,000 - - - 2,600 3,100 3,200 3,300 3,400 3,500 3,600 $40,001 to $45,000 - - - 2,000 2,100 2,200 2,300 2,400 2,500 2,600 $45,001 to $48,000 - - - - 1,500 1,800 1,900 2,000 2,100 2,200 $48,001 to $51,000 - - - - 1,200 1,400 1,500 1,600 1,700 1,800 $51,001 to $55,000 - - - - 900 1,000 1,100 1,200 1,300 1,400 $55,000 to $58,000 - - - - - 800 900 1,000 1,100 1,200 $58,001 to $64,000 - - - - - 600 600 700 800 1,000 $64,001 to $68,000 - - - - - - 600 700 700 900 $68,001 to $71,000 - - - - - - 500 500 700 800 $71,001 to $73,000 - - - - - - 500 500 700 700 $73,001 to $82,000 - - - - - - - 400 600 600 $82,001 to $87,000 - - - - - - - - 500 500 $87,001 to $92,000 - - - - - - - - 400 400
"Single Persons, or Married w/ no
Children" "Families w/ a minimum of one Child"
Simple Look-Up Table(For Illustrative Purposes Only)
43
What Does This Mean For Students?
A FAFSA that encourages access; Real-time feedback on probable Federal
Student Aid; Better awareness of state and institutional
value-added aid, and Predictability for persistence.