Department of Education Federal Policy Update

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Department of Education Federal Policy Update

• Jeff Baker
• Federal 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

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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 reporting

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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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(No Transcript)
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(No Transcript)
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Legislative Status
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Legislative Status

• 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

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Legislative Status

• 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

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Legislative Status

• 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

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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 schools 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 ED
• ED remits institutional share of collections to
  schools

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Legislative Status

• 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

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DIRECT LOAN FFEL PROGRAM STATISTICS
2007-2008 2007-2008 2008-2009 2008-2009 2009-2010 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 2009-2010 Partial Year and Delayed Reporting Especially for FFEL 2009-2010 Partial Year and Delayed Reporting Especially for FFEL 2009-2010 Partial Year and Delayed Reporting Especially for FFEL 2009-2010 Partial Year and Delayed Reporting Especially for FFEL 2009-2010 Partial Year and Delayed Reporting Especially for FFEL 2009-2010 Partial Year and Delayed Reporting Especially for FFEL
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2008-09 ECASLA LOAN PURCHASE STATISTICS
TOTAL FFEL LOANS MADE FFEL LOANS SOLD TO ED FFEL LOANS SOLD TO ED PERCENT SOLD TO ED

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

Dollars 61,160,183,858 61,160,183,858 46,252,966,517 75.6
Does not include Consolidation Loans Does not include Consolidation Loans Does not include Consolidation Loans Does not include Consolidation Loans Does not include Consolidation Loans
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2008-2009 ED OWNED LOANS
ALL LOANS MADE DIRECT LOAN FFEL PURCHASED BY ED FFEL PURCHASED BY ED TOTAL LOANS OWNED BY ED OWNED BY ED

Loans 20,642,368 5,412,766 5,412,766 11,591,588 17,004,354 82.4
Dollars 82.1 Billion 20. 9 Billion 20. 9 Billion 46. 3 Billion 67.2 Billion 81.8
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Loan Origination

• Similar to FFEL
• Confirm eligibility
• Determine award/loan amount
• MPN needed eMPN available
• Create 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

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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 staff
• Monitor incoming volume
• COD has dedicated OnBoarding Team to assist setup
  completion requests and starts

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Where Are We Now

• FSA Direct Loan Transition Team
• Focused OnBoarding/Point of Contact Team
• Focused School Assist Team
• Grad/Professional schools
• Career Colleges
• Small schools
• Foreign

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How to Get Started in DL

• Email to COD
• CODSupport_at_acs-inc.com
• Direct Loan Website
• http//www.direct.ed.gov/participating.html
• For more information
• Email to DLEnrollment_FSA_at_ed.gov
• Email to wood.mason_at_ed.gov

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Direct Loan Training

• Suite of Direct Loan webinars this Fall beginning
  in October
• Repeated Spring of 2010
• COD Systems Primer
• Direct Loan program Primer
• COD Direct Loan Program
• Reconciliation

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Direct Loan Training

• Suite of Direct Loan webinars this Fall and again
  Spring of 2010
• Reports
• D/L Tools
• Direct Loan Servicing
• EdExpress for Direct Loans

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Direct Loan Training

• IFAP 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 Training
• Download via IFAP
• Updated version this Fall

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Direct Loan Training

• FSA Fall Conference
• Nashville, Tennessee
• December 1-4, 2009

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Direct Loan Resources

• Written Materials (IFAP)
• Direct Loan Website
• www.direct.ed.gov
• National Direct Student Loan Coalition
• www.directstudentloancoalition.org

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COD Call Center for Schools

• COD School Relations Center
• www.cod.ed.gov
• [phone]

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Special Issues
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Awards for Children on Deceased Military

• For 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

• 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

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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-Based
Two Pell Grants in an Award Year
Current Rule One Scheduled Award per Award
YearAssume students 2009-10 Scheduled Award is
5,350 and 5,550 for 2010-11
Spring 20102,675
Fall 20092,675
100 2009-10 AY
Summer 20100
2009-10 Award Year
Summer 20102,775
Fall 20102,775
Spring 20110
100 2010-11 AY
2010-11 Award Year
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Term-Based
Two Pell Grants in an Award Year
New Rule Up to Two Scheduled Awards per Award
YearStudents Scheduled Award is 5,350 in both
award years
Spring 20102,675
Fall 20092,675
Summer 20102,675
150 2009-10 AY
2009-10 Award Year
Fall 20102,775
Spring 20112,775
Summer 20112,775
150 2010-11 AY
2010-11 Award Year
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Term-Based
Two Pell Grants in an Award Year
New Rule Up to Two Scheduled Awards per Award
Year Students Scheduled Award is 5,350 for the
award year
Fall 20092,675
Summer 20102,675
Summer 20092,675
Spring 20102,675
2009-10 Award Year
200 2009-10 AY
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Term-Based
Two Pell Grants in an Award Year
New Rule Up to Two Scheduled Awards per Award
Year Students Scheduled Award is 5,350 for the
award year
Fall 20102,775
Summer 20112,775
Summer 20102,775
Spring 20112,775
2010-11 Award Year
200 2010-11 AY
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Clock Hour
Two Pell Grants in an Award Year
Current Rule One Scheduled Award per Award
Year 1500 clock hour program AY 900 hours/26
weeks between July 1 and June 30. Students
Scheduled Award is 5,350.
450 hours/13 weeks2,675
450 hours/13 weeks2,675
2009-10 Award Year
100 2009-10 AY
300 hours/8 weeks0
300 hours/8weeks0
2009-10 Award Year
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Clock Hour

Two Pell Grants in an Award Year
New Rule Up to Two Scheduled Awards per Award
Year 1500 clock hour program AY 900 hours/26
weeks Students Scheduled Award is 5,350 for
the award year
450 hours/13 weeks2,675
450 hours/13 weeks2,675
2009-10 Award Year
160 2009-10 AY
300 hours/8 weeks1,645
300 hours/8 weeks1,645
2009-10 Award Year
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Negotiated Rulemaking
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Current Regulatory Process

• 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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Upcoming Regulatory Process

• Possible 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
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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
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Results Reporting

• 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 colleges reported retention,
  graduation and transfer rates.
• This information will also display on the FAFSA
  on the Web confirmation page.

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IRS Data Share
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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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