Department of Education Federal Policy Update Jeff Baker Federal Student Aid October 21, 2009.

Department of Education Federal Policy Update

Jeff BakerFederal Student Aid

October 21, 2009

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Agenda ARRA Reporting (Stimulus Bill) Default Rates Legislative Status Direct Loan Preparation Special Issues Regulatory Update Simplification – IRS Data Match

The American Recovery and

Reinvestment Act(ARRA)

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ARRA $200 million for 2009-10 Federal Work-Study

ARRA added to regular appropriation

Total included in school authorizations posted in March

Some schools did not see an increase

Special FWS reporting is required if $25,000 or more.

$17.1 billion - Adds $500 to appropriated maximum Pell Grant - $5,350 for 2009-2010

No school reporting4

ARRA September 24 Electronic Announcement

Must register

Reporting deadlines

Reporting guidance coming

October 2 Electronic Announcement Specific Reporting Guidance

October 16 Electronic Announcement Revisions and Clarification

E-mails to 1,796 schools

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FFEL/DLCohort Default Rates

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MASFAA Default Rates(FY 2005 – FY 2007)

State FY 2005 FY 2006 FY 2007

Illinois 4.7% 4.6% 6.9%

Indiana 3.7% 4.4% 6.3%

Iowa 5.3% 5.4% 8.2%

Michigan 3.9% 4.2% 5.7%

Minnesota 3.0% 2.8% 3.3%

Missouri 3.8% 4.3% 6.0%

Ohio 4.3% 4.4% 5.7%

West Virginia 6.9% 8.7% 9.3%

Wisconsin 2.5% 2.3% 2.7%

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Legislative Status

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HR 3221 – Student Aid and Fiscal Responsibility Act of 2009

Passed full House on September 16

Senate still drafting

Expected mark-up in next few weeks with floor action to follow

Final bill expected (needed) by end of year

Legislative Status

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HR 3221

Pell Grants

More secure funding

Changes to two-Pells in an award year

Increased aid for children of deceased vets

EFC change moved to needs analysis

New Iraq and Afghanistan Service Grants

Legislative Status

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HR 3221 –

Needs Analysis (EFC)

Effective 2011-12 Award Year

Elimination of assets

Asset threshold question – no subsidized aid

Elimination of most untaxed income

Elimination of income exclusions

Legislative Status

Proposed New Direct Perkins Loan $6 billion available for new loans

Up from $1.5 billion now Broad Availability to More Schools School-level “Lending Authority”

Hold Harmless for Current Participating Schools Incentive-Based Distribution Among School

Success in Graduating Low-Income Students Affordable Tuition Charges

Credit for Non-Federal Need Based Grants Awarded/Received

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Proposed New Direct Perkins Loan

New Loans – Direct Loans Interest rate remains at 5% Unsubsidized Same terms and conditions as Direct

Loans Originated by schools and ED using COD Serviced by ED

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Proposed New Direct Perkins Loan

Recall federal share of cash in school’s Perkins Revolving Fund as of June 30, 2010 Schools collect on existing loans

Remit to ED federal share; keep institutional share

Schools assign existing loans to EDED remits institutional share of collections to schools

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HR 3221

Transition to 100% Direct Loans

Effective July 1, 2010

Foreign Schools Eligible

Includes all loan types

Sub, Unsub, PLUS, Consolidation

Still have $500 Billion in outstanding FFEL loans

Legislative Status

2007-2008 2008-2009 2009-2010*

DL FFEL DL FFEL DL FFEL

Schools 1,224 4,621 1,735 4,424 1,880 3,848

Loans 3,317,000 13,388,034 5,412,766 15,229,602 5,513,182 7,911,666

Dollars $13.1 B $55.5 B $20.9 B $61.1 B $12.4 B 17.9 B

*2009-2010 Partial Year and Delayed Reporting Especially for FFEL

DIRECT LOAN – FFEL PROGRAM STATISTICS

TOTAL FFEL LOANS MADE

FFEL LOANS SOLD TO ED

PERCENT SOLD TO ED

Loans 15,229,602 11,591,588 76.1 %

Dollars $61,160,183,858 $46,252,966,517 75.6 %

*Does not include Consolidation Loans

2008-09 ECASLA LOAN PURCHASE STATISTICS*

ALL LOANS MADE

DIRECT LOAN FFEL PURCHASED BY

ED

TOTAL LOANS OWNED BY ED

% OWNED BY ED

Loans 20,642,368 5,412,766 11,591,588 17,004,354 82.4 %

Dollars $82.1 Billion $20. 9 Billion $46. 3 Billion $67.2 Billion

81.8 %

2008-2009 ED OWNED LOANS

Loan Origination

Similar to FFELConfirm eligibilityDetermine award/loan amountMPN needed – eMPN availableCreate and send certification/origination to

lender Similar to Grants

School transmits award/loan origination data to COD via Common Record and same transmission as Pell Grant data

Where Are We Now…COD System capacity enhancements for

100% FFELP volume in progress, on time and on target

FSA Customer Service Centers Increased and trained staffMonitor incoming volumeCOD has dedicated OnBoarding Team to assist

setup completion requests and “starts”

Where Are We Now…FSA Direct Loan Transition Team

Focused OnBoarding/Point of Contact TeamFocused School Assist Team

• Grad/Professional schools

• Career Colleges

• Small schools

• Foreign

How to Get Started in DLEmail to COD

[email protected]

Direct Loan Websitehttp://www.direct.ed.gov/participating.html

For more informationEmail to [email protected] to [email protected]

Direct Loan TrainingSuite of Direct Loan webinars this Fall

beginning in October Repeated Spring of 2010

COD Systems PrimerDirect Loan program PrimerCOD & Direct Loan ProgramReconciliation

Direct Loan TrainingSuite of Direct Loan webinars this Fall

and again Spring of 2010ReportsD/L ToolsDirect Loan ServicingEdExpress for Direct Loans

Direct Loan TrainingIFAP Announcement: Publication Date:

September 28, 2009

• DCL ID:  ANN-09-30 Subject: Live Internet Webinars - Direct Loan Webinar Training Suite

• Attachments contain session descriptions and schedule

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Direct Loan Training“EDExpress 101”

Web based training module via IFAP

COD Computer Based TrainingDownload via IFAPUpdated version this Fall

Direct Loan TrainingFSA Fall Conference

Nashville, TennesseeDecember 1-4, 2009

Direct Loan ResourcesWritten Materials (IFAP)Direct Loan Website

www.direct.ed.gov

National Direct Student Loan Coalitionwww.directstudentloancoalition.org

COD Call Center for Schools

COD School Relations Center

www.cod.ed.gov

(800) 848-0978

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Special Issues

Awards for Children on Deceased MilitaryFor any student whose parent or guardian was a member of the Armed Forces and died in Iraq or Afghanistan after September 11, 2001.

For the 2009-2010 award year -

If Pell eligible EFC, all Title IV aid awarded using zero EFC (Pell).

If not Pell eligible EFC, all Title IV aid awarded using calculated EFC (No Pell).

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Awards for Children on Deceased Military

For the 2010-2011 award year and following award years –

If Pell eligible EFC, all Title IV aid awarded using zero EFC (Pell).

If not Pell eligible EFC -

Undergraduate student gets new Iraq/Afghanistan Service Grant in amount of maximum Pell for enrollment status.

All other Title IV aid awarded using calculated EFC (No Pell).

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VA Educational Benefits no longer considered “Estimated Financial Assistance” or “Resources” for all Title IV programs

Effective with the 2009-10 Award Year

Both VA share and institutional share of “Yellow Ribbon” awards are excluded

Includes ROTC

See Electronic Announcement Posted to IFAP on August 14

VA Educational Benefits

Two Pell Grants in an Award Year

Effective with the 2009-2010 award year “Year round” or “Two Pell Grants in an

Award Year” Allows student to receive funds beyond their

scheduled award for the award year. Must be at least one-half time for second

award No change to “scheduled award” No change to Payment Period Calculation

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Term-BasedCurrent Rule: One Scheduled Award per Award YearAssume student’s 2009-10 Scheduled Award is $5,350 and $5,550 for 2010-11

Spring 2010$2,675

Summer 2010$2,775

Fall 2009$2,675

Fall 2010$2,775

2009-10 Award Year

2010-11 Award Year

Spring 2011$0

100% 2009-10 AY

100% 2010-11 AY

Summer 2010$0

Two Pell Grants in an Award Year

Term-Based

Spring 2010$2,675

Fall 2010$2,775

Fall 2009$2,675

Spring 2011$2,775

2009-10 Award Year

2010-11 Award Year

Summer 2011$2,775

Summer 2010$2,675

150% 2009-10 AY

150% 2010-11 AY

New Rule: Up to Two Scheduled Awards per Award YearStudent’s Scheduled Award is $5,350 in both award years

Two Pell Grants in an Award Year

Term-Based

New Rule: Up to Two Scheduled Awards per Award YearStudent’s Scheduled Award is $5,350 for the award year

Fall 2009$2,675

Summer 2010$2,675

Summer 2009$2,675

2009-10 Award Year

Spring 2010$2,675

200% 2009-10 AY

Two Pell Grants in an Award Year

Term-Based

New Rule: Up to Two Scheduled Awards per Award YearStudent’s Scheduled Award is $5,350 for the award year

Fall 2010$2,775

Summer 2011$2,775

Summer 2010$2,775

2010-11 Award Year

Spring 2011$2,775

200% 2010-11 AY

Two Pell Grants in an Award Year

Clock HourCurrent Rule: One Scheduled Award per Award Year1500 clock hour program; AY = 900 hours/26 weeks between July 1 and June 30. Student’s Scheduled Award is $5,350.

450 hours/13 weeks$2,675

300 hours/8 weeks$0

450 hours/13 weeks$2,675

300 hours/8weeks$0

2009-10 Award Year

2009-10 Award Year

100% 2009-10 AY

Two Pell Grants in an Award Year

Clock Hour

New Rule: Up to Two Scheduled Awards per Award Year1500 clock hour program; AY = 900 hours/26 weeks Student’s Scheduled Award is $5,350 for the award year

450 hours/13 weeks$2,675

300 hours/8 weeks$1,645

450 hours/13 weeks$2,675

300 hours/8 weeks$1,645

2009-10 Award Year

2009-10 Award Year

160% 2009-10 AY

Two Pell Grants in an Award Year

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Negotiated Rulemaking

• General and lender/guaranty agency loan issues– NPRM posted July 23, 2009– Comment period ended August 24, 2009

• School-based loan issues– NPRM posted July 28, 2009– Comment period ended August 27, 2009

• Team V-Grants and other issues– NPRM August 21, 2009– Comment period ended September 21, 2009

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Current Regulatory Process

Upcoming Regulatory ProcessPossible Topics

Foreign Schools

Satisfactory Academic Progress

Credit Hours for purposes of determining eligibility

Verification

High school diploma

Incentive compensation

Gainful employment in a recognized occupation

State authorization for institutional participation

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FAFSA Simplification

Technology• 2010-11 design

facilitated by technology upgrade

• Updated navigation reduces the number of pages and length of the application

• Display of help text and instructions will be enhanced by:– use of field

instructions– flyover text– modal boxes

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Technology

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Technology

• Retention, graduation and transfer rates within FAFSA on the Web

– When students use the school code lookup within FOTW to lists colleges on the form, they will be presented with each college’s reported retention, graduation and transfer rates.

– This information will also display on the FAFSA on the Web confirmation page.

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Results Reporting

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IRS Data Share

IRS-FSA Concept Overview

• Federal Student Aid and the IRS are developing a collaborative solution that simplifies FAFSA completion.

• Solution will allow FAFSA on the Web applicants to request and retrieve their income tax data from the IRS.

• IRS data can be automatically transferred to FOTW.

• Totally voluntary.

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How Will IRS Site be Accessed

FOTW IRS Authentication

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How will IRS Data Be Transferred to FOTW?

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Implementation Schedule

• 2009-10 IRS data share will be implemented in

January 2010

– Pilot to test proof of concept

– Participation is voluntary

• 2010-11 IRS data share will be implemented in the Summer of 2010

– Full implementation

– Participation is voluntary

• Will set flag on ISIR to identify when income data is from IRS versus self-reported

• Verification ?????

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