National Association of Student Financial Aid Administrators NASFAA Reauthorization Task Force: A Progress Report.

National Association of Student Financial Aid Administrators

NASFAA

Reauthorization Task Force:

A Progress Report

RTF Membership Chair: Laurie Wolf, Des Moines Area Community College, IA Mark A. Bandre', Ohio Wesleyan University, OH George Chin, City University of New York, NY Robert Collins, University of Phoenix Central Administration,

AZ Norm B. Finlinson, Brigham Young University, UT Karen Fooks, University of Florida, FL Patricia Hurley, Glendale Community College, CA

Bonnie C. Joerschke, Purdue University, IN

Eileen K. O'Leary, Stonehill College, MA Ed Schroeder, University of Arkansas, AR Jack Taylor, University of Kansas Medical Center, KS Arnold Trejo, Texas A&M University, TX Richard Woodland, Rutgers, The State University of

New Jersey, NJ Staff Liaison, Ms. Joan Berkes, NASFAA, DC Staff Liaison, Ms. Marty Guthrie, NASFAA, DC Staff Liaison, Mr. Kenneth E. Redd, NASFAA, DC

Staff Liaison, Mr. Larry Zaglaniczny, NASFAA, DC

RTF Mission

The mission of the NASFAA Reauthorization Task Force is to produce a set of proposals for the reauthorization of the

Higher Education Act that— promote access to postsecondary education, and provide simplicity, consistency, flexibility, and

program integrity in the delivery of student financial aid—

while representing the diverse needs of Association members.

RTF Guiding Principles

Promote fairness and equity for students across all sectors of post-secondary education;

Promote policies that address the needs of disadvantaged students;

Promote accountability; Encourage simplicity; Provide schools with the flexibility to respond to the

specific needs of their students; Promote the primacy of need-based aid;

Recommend policies that accommodate the diversity of academic delivery models;

Promote the use of technology wherever possible;

Eliminate statutory requirements that use financial aid to enforce unrelated social policies; and

Support recommendations with research and data

analysis wherever possible.

TimeLine

During past year:– Solicit from membership, issues to address– Examine areas for potential changes to HEA– Survey membership to determine opinions– Formulate tentative proposals

Currently:– Solicit feedback on proposals from membership

TimeLine

November– Present proposals to NASFAA Board of

Directors

December– Modify proposals based on Board’s position (if

necessary)– Present NASFAA’s Reauthorization Proposals

to the House Committee on Education and the Workforce

TimeLine

Beyond– Monitor congressional proposals for changes to

HEA– Formulate NASFAA response to these

proposals– Request membership support and participation

in the Reauthorization process, as necessary

RTF Issues Identifiedand Survey Responses

Table 1. Number of Survey Respondentsas of September 12, 2002

RespondentCategory

Numberof Respondents

Percentageof Total

Four-Year Public 491 27.9%Four-Year Private 471 26.8%Two-Year Public 388 22.1%Two-Year Private 36 2.0%Proprietary 164 9.3%Lender/Loan Servicer 33 1.9%Loan Guaranty Agency 42 2.4%Other 105 6.0%Missing 29 1.6%Total 1,759 100.0%

Question 1. Eliminate the need for students to reapply for aid every year;data from the student's first aid application should be used to determinefinancial aid eligibility for up to five years of postsecondary education.

Response PercentageStrongly Agree 5.7%Agree 8.2%Neutral 6.5%Disagree 39.9%Strongly Disagree 39.6%Total 100.0%

Status: Issue Dropped

Question 2. Use prior-prior year data in need analysis, in conjunction with adatabase match of income data from the Internal Revenue Service.

Response PercentageStrongly Agree 24.4%Agree 31.9%Neutral 15.5%Disagree 18.7%Strongly Disagree 9.5%Total 100.0%

Issue 19:  Coordination with IRS [Section 484(q)]

Recommendation: Require an IRS Data-Match Demonstration Project

Rationale: There is reluctance on the part of the IRS and the Dept. of Education to begin wholesale income data matches. In order to identify the potential costs, savings, levels of error and operational benefits/pitfalls, the secretaries of Education and Treasury should set up a controlled data match demonstration project for a period of three years with plans to implement for all applicants in subsequent years if the demonstration project proves successful

Issue 30:  Verification [Section 484(q)]

Recommendation: Mandate that ED and the IRS implement a verification system of student data by a date certain Rationale: The 1998 HEA reauthorization law authorized ED and IRS to set up a system to verify student financial aid applicant data. Such data elements included adjusted gross income, Federal income taxes paid, filing status, and exemptions reported by applicants (including parents) under this title on their Federal income tax returns for the purpose of verifying the information reported by applicants on student financial aid applications. Some progress has been made in the last four years, but the earliest the Department and IRS could even begin a pilot project would be in 2004-2005. Statutory date for implementation of such a system no later than three years from the date of enactment of this law. Current estimates show savings of some $300 to $800 million by implementation of such a verification system. If the ED and IRS cannot meet this date for implementation, it could petition the Congress for an extension and explain why they cannot implement such a system nine years after Congress first authorized this verification system.

Question 3. Remove all financial assets from consideration in theFederal Methodology formula

Response PercentageStrongly Agree 5.4%Agree 11.3%Neutral 8.2%Disagree 44.3%Strongly Disagree 30.8%Total 100.0%

Question 4. Combine student and family assets and treat the totalas family assets

Response PercentageStrongly Agree 14.3%Agree 38.0%Neutral 15.9%Disagree 24.4%Strongly Disagree 7.4%Total 100.0%

Question 5. Should the age of independence be reduced?

Response PercentageLower the Age to 21 35.6%Lower the Age to 22 19.4%Lower the Age to 23 10.9%Keep Age at 24 34.1%Total 100.0%

Table 2. Cross-Tab of Survey Question 5 (Should the Age of Independence BeLowered?) by Institution Type

RespondentCategory

Yes—LowerAge to 21

Yes—LowerAge to 22

Yes—LowerAge to 23

No—KeepAge at 24

Missing/NoResponse

4-Yr Public 27.1% 20.4% 14.9% 37.1% 0.6%4-Yr Private 17.4% 17.8% 13.4% 50.5% 0.8%2-Yr Public 51.0% 21.9% 8.0% 19.1% 0.0%2-Yr Private 55.6% 19.4% 13.9% 11.1% 0.0%Proprietary 63.4% 14.6% 6.1% 15.2% 0.6%Other 34.3% 17.1% 6.7% 41.0% 1.0%Lender 33.3% 15.2% 9.1% 42.4% 0.0%Guaranty Ag 28.6% 28.6% 14.3% 28.6% 0.0%Missing 24.1% 6.9% 3.4% 24.1% 24.1%Total 34.1% 19.2% 11.3% 34.1% 0.9%

Issue 3:  Independent Student Definition [Section 480(d)]

Recommendation:  Retain current definition; clarify that to qualify for independent status as a veteran, the student must have served in the military for the required number of days that would qualify the student as a veteran as defined by the Veterans Administration. 

Question 6. Create a "Federal Pell Grant" program forgraduate/professional students

Response PercentageStrongly Agree 18.1%Agree 20.1%Neutral 15.1%Disagree 22.6%Strongly Disagree 24.1%Total 100.0%

Question 7. Change the Federal Pell Grant program award rules sothat all or the vast majority of awards are distributed to first- andsecond-year undergraduates (commonly known as "front-loading")

Response PercentageStrongly Agree 5.7%Agree 9.6%Neutral 10.4%Disagree 40.2%Strongly Disagree 34.1%Total 100.0%

Question 15. Should the annual and cumulative loan limits for Federal StaffordSubsidized and Unsubsidized Loans be increased?

Response PercentageIncrease Loan Limits forAll Students

45.0%

Increase Loan Limits forUndergraduates Only

25.2%

Increase Loan Limits forGraduate/ProfessionalStudents Only

8.0%

Keep All Loan Limits theSame

21.8%

Total 100.0%

Question 16. Replace the current variation in annual student loan limits forundergraduates with one loan limit for each of the undergraduate years

Response PercentageStrongly Agree 22.6%Agree 34.6%Neutral 18.6%Disagree 18.8%Strongly Disagree 5.4%Total 100.0%

Question 17. Allow institutions the flexibility to set a policy of awarding federal studentloans that are below the loan limits (without the need for professional judgment on anindividual case basis)

Response PercentageStrongly Agree 27.0%Agree 35.7%Neutral 22.5%Disagree 11.0%Strongly Disagree 3.9%Total 100.0%

Question 19. Consolidate the current federal student aid programs into one grant, oneloan, and one work-study program

Response PercentageStrongly Agree 18.1%Agree 19.6%Neutral 16.8%Disagree 28.4%Strongly Disagree 17.1%Total 100.0%

National Association of Student Financial Aid Administrators

NASFAA

Reauthorization Task Force:

A Progress Report