Changes to State Financial Aid Programs 2009-2010 Presented by Ginny Dodds & Megan Fitzgibbon MN Office of Higher Education July 7, 2009.

Changes to State Financial Aid Programs 2009-2010

Presented by Ginny Dodds & Megan Fitzgibbon

MN Office of Higher Education

July 7, 2009

Overview

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• Higher Education Bill and Unallotment Process

• General Changes Related to Financial Aid

• MN State Grant Program

• Postsecondary Child Care Grant Program

• State Work Study Program

• SELF Loan

• Safety Officer Survivor’s Grant Program

• Summer Transition Grant Program

• MN Indian Scholarship Program

• MN GI Bill Program

• Achieve Scholarship Program

• Q & A

Higher Education Bill & Unallotment Process

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Higher Education Bill & Unallotment Process

• Bill was signed by the Governor on May 17, 2009

• Line-item vetoes used for:• OHE’s TEACH program appropriation of $250,000 per year for

nonprofit early childhood provider scholarships

• $1 million per year of funding for MnSCU’s Power of You

• MnSCU – Cook County Education Board’s $40,000 appropriation for educational programs and academic support services

• Implementation delayed pending outcome of Governor’s unallotment announcements

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Higher Education Bill & Unallotment Process

• By law, Governor is allowed to unallot funds if projected state revenues fall short of expenditures• Some argue this authority was intended for unanticipated

shortfalls taking place during the biennium

• May be possible legal challenges to Governor’s use of unallotment authority

• Governor cannot officially unallot funding until after July 1, 2009

• Governor announced unallotment plans on June 16, 2009

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Higher Education Bill & Unallotment Process

• Governor’s planned unallotments:• $300 million Reduction of local aids and credits

• $67 million Reduction of refunds and other payments

• $236 million Reduction in human services spending

• $100 million Reduction in higher education appropriations • $50 million cut for both MnSCU and U of M

• $33 million Reduction in most state agency operating budgets

• $1.77 billion K-12 payment deferrals and adjustments

• $169 million Administrative actions

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Higher Education Bill & Unallotment Process

• Announced unallotments did not affect state financial aid programs

• Governor has authority to unallot additional funds during the biennium if revenue projections fall below expenditures• More likely to impact second year of biennium

• Legislature will reconvene in early 2010• May pass legislation affecting program funding levels for 2010-2011

General Changes

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Definition of Eligible Institution

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• Requirement that eligible schools be participating in the Federal Pell Grant program by July 1, 2011, was delayed until July 1, 2013

• OHE directed to work with small institutions to identify cost-effective methods to achieve accreditation necessary to be an eligible institution for state and federal financial aid

FAFSA Compliance

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• All eligible institutions must implement policies and procedures that ensure that applicants are aware they must annually complete the FAFSA to be eligible for financial aid

• By March 15, 2011, OHE must report to the higher education committees of the legislature on the policies and procedures adopted by institutions eligible for the state grant program to increase student awareness of the need to complete a FAFSA application with a preliminary assessment of the effectiveness of the policies and procedures.

Criminal Record Notice

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• Public and private institutions must give notice to each person accepted for admissions and at the time the student selects a major

• Notice must inform student that arrests, charges or convictions for criminal offenses may limit employment possibilities in specific careers and occupations

• Notice must also inform student that such offenses may limit eligibility to obtain federal, state and other financial aid and encourage student to investigate that possibility• Notice must not discourage students from applying for financial

aid

• An institution is not liable for failing to provide the notice

American Made Clothing

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• To extent possible, bookstore located on campus must offer for sale clothing or articles of apparel that are manufactured in the Unites States

• The college or university must make a report to the legislature on the results of efforts to comply with this requirement

Miscellaneous

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Veterinary loan forgiveness program created

• For vets who treat food animals and work in rural areas

• Designed to serve up to 5 borrowers per year

• $225,000 available until expended

• OHE will contract with Dept of Health to run program

College Emergency Grants

• $150,000 each year to MnSCU two-year institutions for emergency aid grants to students who are experiencing extraordinary economic circumstances that may result in dropping out of school without completing the term or program

Minnesota Promise

• Financial aid policy. It is the policy of the legislature to provide sufficient financial aid funding so that tuition and required fees to attend a public two-year college for a student from a low-income family are covered by state financial aid when combined with federal and other sources of aid.

• Informational materials. The Office of Higher Education must prepare and distribute materials under section 136A.87 to promote the Minnesota Promise, the availability of financial aid, and the benefits of higher education.

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QUESTIONS??

MN State Grant Program

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Limit on Postsecondary Education

• Limit on postsecondary attendance extended from 8 to 9 full-time semesters or the equivalent• Will affect any student with term(s) funded out of the 2009-2010

aid year

• Units cutoff increased from:• 93.6 to 105.6 units – Schools on semester system

• 94.4 to 106.4 units – Schools on quarter system

• Updated transcript review spreadsheet emailed to schools and posted on OHE web site

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Limit on Postsecondary Education

• Term during which student withdrew for major medical illness does NOT count towards limit on postsecondary attendance• Student must have been under the care of a medical professional

during term of withdrawal

• Medical professional must provide statement that student was unable to complete term due to major medical illness

• Instructions on revised State Grant student eligibility questionnaire direct student to contact financial aid office if s/he withdrew for major medical reasons• Schools not required to ask all students if they ever withdrew

due to major medical illness

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Limit on Postsecondary Education

• If student was paid a State Grant for a term during which the student withdrew for a major medical illness, school should inform OHE so that units can be flagged on State Grant database• Same applies to term(s) during which student withdrew for

active military service after December 31, 2002

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2009-2010 Award Calculation Parameters(changes from 2008-2009 shown in red)

• 4-year program tuition cap: $10,488

• 2-year program tuition cap: $ 5,808

• Living and miscellaneous: $ 7,000*

• Student share: 46%

• Proration of parent contribution: 96%

• Proration of EFC for independent:• With dependents 86%• Without dependents 68%

*prorated LME of $5,727 for clock hour schools with 900-hour academic year

State Grant Maximum Awards

Amounts shown equal 54 percent of full-time State Grant award budget

• U of M/Four-Year Private: $9,444

• Two-Year Private: $6,916

• MnSCU Four-Year: $7,325

• MnSCU Two-Year: $6,407

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Full Awards

• The higher education bill has language directing OHE to make full grant awards in each year of the biennium• OHE to request deficiency appropriation if funding runs

short, rather than award reductions

• If funding shortfall during 2009-2010, can borrow from 2010-2011

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Year Round Pell Grant(Federal Law Unrelated to State Higher Education Bill)

• Effective 2009-2010, many students will be eligible to receive up to two full-time annual Pell Grants during the same aid year

• Based on draft regulations currently in the process of negotiated rule making:• Second annual Pell Grant available once student completes

24 semester or 36 quarter credits

• Schools will be required to fund a crossover term from the aid year resulting in the highest Pell Grant award for the student, as of the date of disbursement

• This means some schools will be forced to pay summer term as a header for some students when they haven’t done this in the past

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Year-Round Pell Grant

• State Grant policy requires schools to fund State Grant for a crossover term from the same aid year selected for Federal Pell Grant• This is because a student’s State Grant is based on the EFC

and Pell Grant for a given aid year

• OHE will respond to negotiated rulemaking with potential problems associated with forcing schools to choose the aid year yielding the highest Pell Grant award

• NASFAA info on year-round Pell Grant• http://www.nasfaa.org/publications/2009/

ryearround052609.html

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Year Round Pell Grant

• Potential problems with coordination of Pell and State Grant for crossover term:• Choosing aid year yielding highest Pell Grant award may

result in less COMBINED Pell and State Grant

• Many schools not set up to handle summer as header term of aid year

• Funding summer as header term may result in delayed disbursements to students

• Neither Pell or State Grant funds are available until July

• Delayed disbursement may mean reduced State Grant award if student’s enrollment level has changed prior to disbursement

• Pell available for 4 FT semesters; State Grant limited to 3

Year-Round Pell Grant

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• Example of dependent student attending MnSCU 4-yr full-time for summer 2009

2008-2009 2009-2010

EFC $ 0 $3,000

Parent Contribution $ 0 $ 0

Pell Grant $4,731 $2,400

State Grant $2,058 $4,925

Combined Pell &SG $6,789/2 = $3,395 semester $7,325/2 = $3,663 semester

Year Round Pell Grant

Fall 2008

Spring 2009

Sum 2009

Fall 2009

Spring 2010

Sum 2010

Fall 2010

Spring 2011

Sum 2011

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QUESTIONS??

Postsecondary Child Care Grant Program

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Limit on PostsecondaryEducation

• Limit on postsecondary attendance NOT extended to 9 semesters• Stays at 8 full-time semesters or the equivalent

• This was oversight that OHE will try to address next legislative session

Allocations to Campuses

• Higher education bill increased annual program appropriation from $6.2 million to $6.7 million

• Initial allocations calculated in April 2009 were based on Governor’s budget request• 5% cut to $6.2 million appropriation = $5.9 million

• Initial allocations recalculated in June 2009 based on $6.7 million appropriation, since unaffected by unallotment

• Will be recalculated in September 2009 based on prior year utilization rate

• 2009-2010 application, maximum award chart, calculation spreadsheet already distributed to schools

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Award Calculation

• 2009-2010 award calculation formula has not changed• Still lesser of actual child care costs vs maximum award vs

financial need• Effective 2009-2010, federal veterans benefits will be ignored as estimated

financial assistance when determining financial need

• Maximum award still $2,600• Maximum award table updated for 2009-2010 based on 2009

federal poverty guidelines

• Has effect of expanding income levels at which students qualify

• 2009-2010 application, maximum award chart, calculation spreadsheet already distributed to schools• Also posted on OHE web site

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State Work Study

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Allocations to Campuses

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• Higher education bill increased annual program appropriation from $12.4 million to $14.9 million

• Initial allocations calculated in April 2009 were based on Governor’s budget request• 5% cut to $12.4 million appropriation = $11.8 million

• Initial allocations recalculated in June 2009 based on $14.9 million appropriation, since unaffected by unallotment• Will be recalculated in September 2009 based on prior year

utilization rate

• Effective 2009-2010, federal veterans benefits will be ignored as estimated financial assistance when determining financial need (COA minus EFC, other financial aid & resources)

SELF Loan

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SELF Loan

• Effective 2009-2010, federal veterans benefits will no longer be considered a form of financial aid or resource when determining eligibility for SELF loan• Schools will be given discretion to include veterans benefits as

resource if they would like to limit a student’s debt load

• SELF program will send out newsletter to campuses regarding changes

Safety Officer Survivor’s Grant

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SOS Grant

• Annual appropriation still $100,000

• Approximately 15 – 20 recipients per year

• Limit on postsecondary attendance decreased from 10 to 9 semesters• Renewal language in statute still says award is granted for one

year and renewable for another 4 years

• OHE will use 9 semester limit for new applicants and 10 semester limit for recipients initially awarded prior to 2009-2010 year

QUESTIONS??

Summer Transition Program Grant

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Summer Transition Program

• Effective summer 2010

• Public and private institutions encouraged to offer research-based high school-to-college developmental transition program and enroll students who will receive grant

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Summer Transition Program

• Program must, at a minimum:• Include instruction to develop the skills and abilities necessary to

be ready for college-level work when the student enrolls in a program leading to credential

• Must address the academic skills identified as needing improvement by a college readiness assessment completed by the student

• Not constitute more than the equivalent of one semester of full-time study occurring the summer following high school graduation

• Must be identified on a student’s transcript with unique identifier to distinguish it from other developmental courses/programs

Summer Transition Program Grant

• $4.9 million per biennium from State Grant appropriation

• One-time grant to help pay expenses of summer transition program

• For students who graduate from high school after December 31, 2009

• Cannot receive both Summer Transition Grant and MN State Grant for same term• Can receive Summer Transition Grant and Pell Grant for same

term

• Does count towards limit on postsecondary education for State Grant program

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Summer Transition Program Grant

• Award calculation when EFC/PC > $0 is: State Grant term award budget adjusted for enrollment level

- 46% student share

- Term adjusted parent contribution (dep) or EFC (independent)• 9-month FM PC prorated to 96% then divided by 2 (sem) or 3 (qtr)

• 9-month FM EFC prorated to 86% indep with deps; 68% indep w/o deps then divided by 2 (sem) or 3 (quarter)

- Pell Grant (only if student is actually receiving Pell Grant)

= Summer Transition Program Grant (minimum $50 sem; $33 qtr)

• This presents incentive for transition program to NOT be eligible for Pell Grant • Saves one term of Pell Grant eligibility for future use

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Summer Transition Program Grant

• Award calculation when EFC/PC = $0 is: State Grant term award budget adjusted for enrollment level

- $1,200 summer work expectation

- $ 0 Pell Grant (even if student is receiving Pell Grant)

= Summer Transition Program Grant (minimum $50 sem; $33 qtr)

• Transition program students with zero EFC will always want to opt for Summer Transition Grant rather than standard State Grant

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Summer Transition Program Grant

• For student with $0 EFC for 2009-2010, Summer Transition Grant for summer 2010 would be:

MnSCU 2-Yr MnSCU 4-YR UofM/Private 4-Yr

15 credits $4,642 $5,487 $7,544

12 credits $3,474 $4,150 $5,795

9 credits $2,305 $2,812 $5,246

6 credits $1,137 $1,475 $2,299

3 credits $ 0 $ 137 $ 549

• Some students might also be eligible for Federal Pell Grant, if accepted into credential program

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Summer Transition Program Grant

• Enrollment level based on credits (or credit equivalencies) of remedial course work

• OHE will need to determine whether and how other program activities can be translated into credits

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Summer Transition Program Grant

• School’s definition of summer term used for other state financial aid programs will be used• Most schools combine mini-sessions into one summer term

• If term crosses fiscal year (July 1), it is considered crossover term• Crossover terms can be funded from either aid year

• Must select same aid year for Summer Transition Grant and Pell Grant, IF Pell Grant being subtracted

• State Grant application deadline for aid year selected applies

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Summer Transition Program Grant

• OHE will seek advice from campus financial aid administrators re: program implementation and design• Possible working group

• At issue:• Should program be integrated into State Grant program, whereby

records for transition grant are included in State Grant batch with special identifiers?

• Should program be designed like Work Study and Postsecondary Child Care Grant, whereby funding advanced to campuses and campus submits final report with student data and awards?

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Summer Transition Program – Evaluation

• OHE must establish and convene a data working group to develop:• Data methodology used to evaluate program’s effectiveness at

improving academic performance, including identification of comparison groups

• Timeline for institutions to submit data to OHE• Must report annually

• Procedures to ensure consistency of data collected

• Data group must:• Have members with expertise in data collection and delivery of

academic programs to students

• Represent the types of institutions offering transition programs

• Help OHE director analyze and synthesize data for annual evaluation report submitted to legislature

Summer Transition Program – Evaluation

• At a minimum, evaluation data collected must include:• Demographic information about participants

• Names of high schools from which students graduated

• College readiness test used to determine the student was not ready for college-level academic work

• Academic content areas assessed and the scores received on the readiness test

• Description of services, including any supplemental noncredit academic support services provided to students

• Data on registration load, courses completed, and grades received by students

• Retention of students from summer to fall term and subsequent terms

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Summer Transition Program – Evaluation

• Transition Program participants will need to be tracked even if they transfer to another college• OHE can use ISIR/State Grant database to determine if student

enrolled for fall and subsequent terms

• Potentially, OHE can contact these campuses for data on subsequent enrollment (e.g., GPA, etc.)

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QUESTIONS??

MN Indian Scholarship

• Increase in appropriation by $125,000 in each year• Approximately 30 additional full year awards

• As of July 1, 2010: • Over 1300 applications received• Over 600 students who meet basic eligibility requirements with

complete applications to be reviewed• School budgets can and should still be completed

• Enormous thanks to institutions that heeded the call for budgets to be completed as soon as possible if students had completed the financial aid process at their institution

• Our intent was be able to provide scholarships to students who had completed the process regardless of their institution

• Students not awarded with complete applications will be placed on a waiting list

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MN GI Bill2009-2010 Award Year

• No changes in program for 2009-2010 aid year• Appropriation to program was changed from a base

amount to a open appropriation• Initial appropriation made based on forecasted usage but MN

Dept of Veterans Affairs can request additional if needed• Effect of Post 9/11 GI Bill (Chapter 33) is unknown

• Not all students will benefit from utilizing Chapter 33 benefits instead of Chapters 1606, 1607 or 30

• Not all students will qualify at 100% of benefit and may still have need

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MN GI BillImportant Info for Vets

• Higher Education Technical Amendments Bill signed by President Obama on July 1st, 2009• Veteran’s education benefits no longer considered Estimated

Financial Assistance now effective July 1, 2009• For more info on other changes visit NASFAA.org or IFAP

• Does everyone know about MyMilitaryEducation.org?• One-stop resource for veterans and their families• Sponsored by the MN Department of Veterans Affairs – Higher

Education Veterans Programs and MNSCU – MN Online• Provides FAQ powered by RightNow• Includes info on all aspects of higher education • Online Chat, Email and Telephone assistance

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QUESTIONS??

Achieve Scholarship

• Major changes made to program and student eligibility for students who graduate from high school on or after January 1, 2009

• Original program and student eligibility requirements in place for students who graduated between January 1, 2008 and December 31, 2008

• $4.35 million available in each year for scholarships

• Fact Sheet available at www.ohe.state.mn.us/FAForms

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Achieve ScholarshipAll Students

• To be eligible, all students must:• Be a U.S. citizen or eligible non-citizen

• Be a Minnesota Resident for state financial aid purposes

• Complete a FAFSA for the financial aid year

• Graduate from a Minnesota High School

• Enroll at an eligible Minnesota institution

• Apply for the scholarship no later than 30 days after the term starts in order to receive funds in that term

• Complete one of the four sets of rigorous programs of study while in high school or in a home-school setting

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Achieve Scholarship2008 High School Grads

• To be eligible, students who graduated between January 1, 2008 and December 31, 2008 must :• Have a family adjusted gross income of less than $75,000

reported on the FAFSA for the academic year during which the scholarship is used

• Be enrolled for at least 3 credits in an eligible institution• Take and receive at least a grade of C in each of the

courses, unless otherwise stated, in one of four rigorous programs of study

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Achieve Scholarship2008 High School Grads

• Award Process• Eligible student receives an Eligibility Letter

• Notifies student of eligibility and asks student to acknowledge award by going online and entering what school and in what term they would like to receive their first payment

• Eligible students awarded $1,200 to be disbursed in two equal payments of $600 at the requested institution

• The first payment made within the first term of enrollment• The second payment made in the second term of enrollment provided

student successfully completes the first term• Enrollment and Successful completion of the first term

information is provided by the institution online• For more information on the online process download the Online Tools

Guide at www.ohe.state.mn.us/FAForms

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Achieve Scholarship2009 High School Grads

• To be eligible, a student who graduates on or after January 1, 2009 must:• Be eligible to receive either a Federal Pell Grant or Minnesota

State Grant • Complete all of the required courses in one of four rigorous

programs of study and graduate with an unweighted grade point average of 2.5 or higher

• Enroll full time (15 Credits) in an eligible institution within the first academic year immediately following high school graduation

• Example: 2009 High school graduates only eligible in the 2009-2010 aid year

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Achieve Scholarship2009 High School Grads

• Foreign Language Waiver• The foreign language requirement in both the State Scholars

Initiative and the MN Coursework rigorous programs can be waive if a student’s first language is not English and they have attained English language proficiency

• Can be indicated on application or contact us to request a waiver• Denial letter will include this information for students who may

have not indicated this on their applications

• Online Course Bonus• Eligible students who completed at least one online course while

in high school are eligible to receive an additional award of $150• Can be indicated on application, have it listed on their high

school transcript or contact us• Award Letter will include this information for students who may

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Achieve Scholarship2009 High School Grads

• Award Process• Eligible students will receive an award letter that includes award

amount and postsecondary institution listed on application• Some applications submitted under old guidelines did not have

institutions listed• Matched first institution on FAFSA to old applications

• Award letter will provide instructions to update the institution and online course completion status online

• Students will only be able to do this once and will have to contact us if they need to make additional updates

• Institutions notified when Award Rosters are available online• Institutions required to mark if students are enrolled for at least

15 credits• Institutions notified when payments are made and Payment

Rosters available

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QUESTIONS??